Home sales in Arkansas’ four largest markets during the first half of 2013 were up almost 10%, with only the Fort Smith metro area seeing a decline in the number and value of homes sold in the six-month stretch, according to The City Wire’s Arkansas Home Sales Report.
For the first six months of the year, Pulaski County had a narrow hold on the top Arkansas county for home sales. The county, with a population of around 390,000, had 2,144 home sales between January and June. Benton County, with a population of around 230,000, posted 2,125 home sales in the same six month period.
The City Wire’s Arkansas Home Sales Report captures home sales data in the state’s 14 most populated counties within the state’s four largest metro areas — Central Arkansas, Fort Smith area, Jonesboro/Northeast Arkansas and Northwest Arkansas. The report, which records closed sales, accounts for between 70% and 75% of total Arkansas home sales. This report counts the number of sales closed between January and June.
In the four markets, the number of homes sold totaled 9,671, up 9.57% compared to the first six months of 2012. The value of homes sold in the four markets between January and June totaled $1.614 billion, up 12.65% compared to the same period in 2012.
For the first six months of 2013, the number of homes sold in central Arkansas are up 8.9%, up 10.74% in the Jonesboro area and up 14.09% in Northwest Arkansas. Sales during the same period are down 2.49% in the Fort Smith area, and the values are down 7.12% compared to the first six months of 2011.
The average sales price of a home sold in the four markets during the first six months of 2013 was $166,908, up 4.65% compared to the 2012 period, and up 13.05% compared to the 2011 period.
Home sales activity was up for three of the four markets during June. There were 899 homes sold in central Arkansas, up 4.9% compared to June 2012, and up 6.26% compared to May 2011.
June home sales totaled 643 in Northwest Arkansas, up 3.7% compared to June 2012, but down 0.46% compared to June 2011.
Jonesboro area home sales totaled 166, up 5.06% compared to June 2012 and up 7.1% compared to June 2011.
In the Fort Smith area, home sales totaled 153, down 13.07% compared to June 2012, and down 18.18% compared to June 2011.
Total sales during June were up 12.79% in central Arkansas, up 8.49% in Northwest Arkansas, up 4.87% in the Jonesboro area, and down 15.04% in the Fort Smith region.
THE REGIONAL PICTURE
Central Arkansas — Home sales
Jan.-June 2013: 4,599
Jan.-June 2012: 4,240
Jan.-June 2011: 4,005
Fort Smith area — Home sales
Jan.-June 2013: 783
Jan.-June 2012: 803
Jan.-June 2011: 843
Jonesboro area — Home sales
Jan.-June 2013: 897
Jan.-June 2012: 810
Jan.-June 2011: 859
Northwest Arkansas — Home sales
Jan.-June 2013: 3,392
Jan.-June 2012: 2,973
Jan.-June 2011: 2,878
The top five counties in terms of Jan.-June 2013 home sales:
Pulaski — 2,144, up compared to 2,031 in 2012
Benton — 2,125, up compared to 1,850 in 2012
Washington — 1,267, up compared to 1,123 in 2012
Faulkner — 718, up compared to 583 in 2012
Saline — 711, up compared to 637 in 2012
Link here for a PDF document of the June 2013 data.
BEHIND THE NUMBERS
Kathy Deck, director of the Center for Business and Economic Research at the Sam Walton College of Business at the University of Arkansas, said better housing markets are largely the result of economic improvement around the nation. She said prices generally rise after a period of decline. She added that existing home owners are in a better position these days – the market for new homes pretty all but collapsed after 2007 and has been recovering since.
In general, Deck said labor markets have improved and that has led to increased demand for homes. Higher average sales prices, she said, are a natural consequence of increased demand.
Chuck Warford a Realtor with iRealty Arkansas, believes rising interest rates have contributed to increases in sales. According to the national Mortgage Bankers Association, the average interest rate on a 30-year, fixed mortgage was 4.58% on July 19 – a far cry from rates below 4% just a few months ago.
“The days of the 3 percent mortgage are probably gone,” Warford said.
Those rising rates have caused potential buyers to stop waiting for further drops and start buying before additional increases hit mortgage markets. Still, he said current rates are historically low. Warford saw interest rates as high as 15.5% in the early 1980s, so today’s buyers are still in great shape by comparison.
Jeff Collins, the economist for The City Wire, said interest rates are a tricky thing to predict and he’s not convinced they will rise much more in the near future. Collins said the unemployment rate has improved, but not enough to cause dramatic upward pressure on mortgage rates.
Arkansas’ unemployment rate in June was 7.3%. Collins said it needs to drop below 6% before demand for homes increases to a point where there will be upward pressure on interest rates.
The more than 250 mortgage bankers surveyed by Mortgage-X in its weekly Mortgage Rate Trend Survey tend to agree that interest rates will rise slowly – but not substantially – in the months to come. According to the July 22 survey, 48% of the bankers polled believe rates will rise slightly over the next 90 days.
MIXED FORT SMITH MARKET
Declines in the region are primarily seen in Crawford County.
Realtor Jason Kilbreath of Ron Calhoun & Associates said many factors are playing into the decline in home sales north of the Arkansas River.
"There's several factors. One can be the I-540 road work," he said, adding that the construction is causing many people to evaluate commute times when searching for a home.
Other factors Kilbreath mentioned include high gas prices and the possibility of the rural development loan going away. The loans are part of the farm bill, which has become a contentious issue as Congress has been debating renewal of the bill.
"I think the loss of the rural development loan is definitely going to continue to hurt sales. That's what a lot of people, especially first time buyers, that's what they use."
The beneficiary of Crawford County's woes appears to be Sebastian County, according to Kilbreath.
For the first half of the year, Sebastian County had an increase of 7.78% in home sales, with 564 homes sold with a value of $76.824 million from January to June. The same period last year saw 532 homes sold with a value of $71.277 million.
In Crawford County, only 219 homes were sold during the first half of this year at a value of $23.127 million, a 26.76% drop from the same period last year, when 271 homes were sold at a value of $31.578 million.
HOT MARKET IN NWA
Through the first half of 2013, Benton County has been hot with 2,125 sales valued in excess of $392.685 million. Agents sold 275 more homes this year than last and total sales volume is up by more the $72 million through the first half of the year in Benton County.
Through the first half of this year, agents sold 1,267 homes in Washington County, units rose 12.8%. Total volume was more than $218.598 million, up 22% from the same period last year.
The local Coldwell Banker franchise reports its sales volume rose 13% in June and is up 25% through the first half the year, compared to the same periods in 2012, according to CEO George Faucette.
“Our new written business continues to keep pace with the closed business,” Faucette said.
Vickie Briolat, agent with Crye-Leike Real Estate, said location is important to seller’s getting the prices they want.
“While prices are better in many areas, there is still a gap in the outlying areas such as Pea Ridge,” Briolat said. “I have a beautiful listing in Pea Ridge, 1,700 square-feet, granite countertops, pristine condition home built in 2006. We have gotten three offers, but no where near the $144,000 listing price. Two were so low, we couldn’t even counter.”
She has another listing in Pea Ridge at $108,000 and the top offer received has been $90,000.