Rise in area home inventory not yet problematic

A more than 21% increase in the number of homes for sale in the Fort Smith/Van Buren market does not alarm state and local housing-market watchers.

The inventory of new and existing homes in the Fort Smith/Van Buren market grew from 1,023 as of Jan. 5 to 1,247 as of Nov. 30, an increase of 21.8%.

Also, the average list price of new and existing homes in the January-November period has declined 3.1%, ending Nov. 30 at $181,332.

Rising home inventories — supply outpacing demand — was one of the signs prior to the 2007-2008 housing bubble collapse. But Dave Hughes, executive director of the Greater Fort Smith Association of Home Builders, and Ethan Nobles, director of media relations for the Arkansas Realtors Association, don’t see a looming problem in the Fort Smith region.

“If we can believe the stats here, it certainly would give credence to the notion that things are tapering off in terms of sales and increased inventory,” Hughes noted. “Anecdotal information I’m receiving doesn’t directly contradict that thesis. However, we just sold the Showcase Home on a contract received last week, so while there may be a slowdown on some sales, its certainly not dead.”

The Showcase Home of the association’s recent Fall Parade of Home is a 2,200-square-foot home built with an Italian villa look and priced at $269,500.

Ernie Schimmelman, a Realtor with the King Realty Group and author of a monthly report on the area housing industry, has consistently noted that a majority of home sales in the area are in the $200,000 and lower range. He has said the local market needs to see higher-priced homes begin to sell.

“Strong consideration must be given to the inventory that remains of properties above $150,000 that requires a minimum of 11 months on-average to sell. Once we see improving trends for these properties we can start to speak in terms of market recovery,” Ernie Schimmelman, a Realtor with King Realty Group said in his recent report.

Nobles said statewide that homes priced above $150,000 aren’t “moving nearly as well” as the industry would like. He said the extension and expansion of a federal tax credit for homebuyers is intended to help improve sales of higher-priced homes. (Link here for a thorough review of the tax credit.)

“A lot of those homes (above $150,000) have been waiting for buyers for some time and the hope is the new credit will convince some people to step in and buy them, thus reducing the inventory at higher ranges. Will it work? We hope so,” Nobles noted.

ARKANSAS REALTOR ASSOCIATION HOUSING STATS
Fort Smith/Van Buren real estate markets
Average list price of new and existing homes
30 NOV: $181,332
5 JAN: $187,232

Median list price of new and existing homes
30 NOV: $144,500
5 JAN: $146,900

Inventory of new and existing homes
30 NOV: 1,247
5 JAN: 1,023