It’s not slowing. In fact, the home sales in Arkansas’ four largest markets that began to explode in 2015 gained momentum in the first half of 2016, with sales up more than 13% and the average home price up more than 4%.
The number of homes sold in Arkansas’ four large markets totaled 12,587 in the first six months of 2016, up 13.31% compared to the same period in 2015. The six-month tally tops the pre-recession 2006 high when 12,320 homes were sold.
The combined value of homes sold in the January-June period was $2.25 billion, up 18.35% compared to the same period in 2015 and up 33.57% compared to the same period in 2014, according to the Arkansas Home Sales Report.
The Arkansas Home Sales Report captures home sales data in the state’s 14 most populated counties within its four largest metro areas – Central Arkansas, the 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. The report is produced by Talk Business & Politics and is sponsored by El Dorado-based Deltic Timber and Lowell-based Arvest Bank.
Sales price per home in the first six months averaged out at $178,801, up 4.45% compared to the same period in 2015 and up 10.21% compared to the same period in 2014. The average price per home sold ranges from $210,791 in Northwest Arkansas to $137,193 in the Fort Smith metro.
The January-June 2016 home sales were up 12.57% in central Arkansas, up 4.64% in the Fort Smith metro, up 6.73% in the Jonesboro metro and up 18.42% in Northwest Arkansas. Benton County in Northwest Arkansas and Pulaski County in central Arkansas continue to be the state’s busiest in terms of home sales. Of the 12,587 home sales in the January-June period, 5,664, or 44.9%, were in the two counties.
The value of home sales for the first six months was up 14.16% in central Arkansas ($970.017 million), up 5.24% in the Fort Smith metro ($142.269 million), up 11.64% in the Jonesboro metro ($168.013 million), and up 26.64% in Northwest Arkansas ($970.269 million).
‘HEALTHY, ROBUST EXPANSE’
Michael Pakko, chief economist and state economic forecaster at the Institute for Economic Advancement (IEA) at the University of Arkansas at Little Rock, said the housing market seems to have recovered from the Great Recession.
“It really appears to me that sales this year are at least in the same ballpark as where we were in 2006 before the downturn,” Pakko said, adding that sales in Arkansas for 2016 have eclipsed those in 2006 both in terms of volume and average sales prices.
Pakko also said there are some economic changes to consider over the past decade, For one thing, there has been population growth in Arkansas and that has likely influenced sales. Additionally, he is not seeing “overenthusiastic markets” that were present in 2006, meaning that there is a lot less speculative building – people are generally more cautious about real estate markets now than they were 10 years ago.
“We’re seeing a healthy, robust expanse into the housing market in light of an improving economy,” he said.
A concern of Realtors was rising interest rates in the back half of 2016, but the Brexit vote and other domestic global issues have pushed interests lower, not higher. Mortgage rates have remained below 4% for most of the year, with rates in late July closer to 3.5%.
“Mortgage rates were already low for potential homebuyers and this drop creates an even better opportunity for them to save money and secure an even lower rate when purchasing or refinancing a home,” said Steven Plaisance, president and CEO of Arvest Bank Mortgage Division.
Plaisance said the lender is seeing lots of activity for new purchases and refinances, which is some cases is saving customers $200 per month. The Mortgage Bankers Association also reports a 14.2% increase in mortgage applications following the drop in interest rates that was triggered by the Brexit vote.
JUNE SALES UP MORE THAN 11%
Home sales in Arkansas’ four largest markets totaled 2,609 in June, up 11.5% compared to June 2015 and up 22.37% compared to June 2014. The Jonesboro metro was the only market to see a decline in June.
The value of combined June home sales in the four markets was $503.053 million, up 18.89% compared to June 2015 and up 36.26% against June 2014. The average home price in June in the four markets was $192,815, up 6.64% compared to June 2015.
The average days on market in June was 76.81, down fro 84.97 in June 2015 and down from 84.81 in June 2014.
The June 2016 home sales were up 5.78% in central Arkansas, up 5.5% in the Fort Smith metro, down 6.3% in the Jonesboro metro and up 26.08% in Northwest Arkansas.
The value of June home sales was up 9.95% in central Arkansas ($201.105 million), up 1.25% in the Fort Smith metro ($30.284 million), down 0.99% in the Jonesboro metro ($37.078 million), and up 35.72% in Northwest Arkansas ($234.585 million).
THE REGIONAL PICTURE: January-June 2016
Central Arkansas — Home sales
Jan.-June 2016: 5,742
Jan.-June 2015: 5,101
Jan.-June 2014: 4,938
Fort Smith area — Home sales
Jan.-June 2016: 1,037
Jan.-June 2015: 991
Jan.-June 2014: 954
Jonesboro area — Home sales
Jan.-June 2016: 1,205
Jan.-June 2015: 1,129
Jan.-June 2014: 1,075
Northwest Arkansas — Home sales
Jan.-June 2016: 4,603
Jan.-June 2015: 3,887
Jan.-June 2014: 3,419
The top five counties in terms of January-June 2016 home sales:
Benton — 2,877, up compared to 2,457 in January-June 2015
Pulaski — 2,787, up compared to 2,394 in January-June 2015
Washington — 1,726, up compared to 1,430 in January-June 2015
Craighead — 968, up compared to 928 in January-June 2015
Saline — 885, down compared to 728 in January-June 2015
Link here for a PDF document of the June 2016 data.
THE 2015 PICTURE
Home sales in Arkansas’ four largest markets were up almost 10% in 2015, and marked five consecutive years of gains in the number of homes sold and four consecutive years of gains in the total value of the homes sold.
Home sales in Arkansas’ four largest markets totaled 24,125 in 2015, up 9.86% compared to 2014 and up 14.6% compared to 2013. The 2015 gains were driven by a a double-digit annual gain in Northwest Arkansas.
2015 home sales were up 8.66% in central Arkansas, up 6.22% in the Fort Smith metro, up 3.57% in the Jonesboro metro and up 14.7% in Northwest Arkansas.
The value of home sales was up 11.62% in central Arkansas ($1.832 billion), up 8.66% in the Fort Smith metro ($312.801 million), up 11.14% in the Jonesboro metro ($316.576 million), and up 13.55% in Northwest Arkansas ($1.573 billion).