Record low interest rates and improving consumer confidence did little to spur home sales in December across Washington and Benton counties. Agents sold 394 homes in December, down 13.2% from a year ago, according to MountData.
However, MountData reports 5,804 local homes were sold during 2011, an 8.1% improvement over 2010. Agents and brokers earned commission on $892.67 million from sales recorded in 2011, up 3.48% from the prior year.
“Home inventory dropped by more than 300 homes from November to December, which should benefit sellers in the short run,” said Paul Bynum, economist with MountData, a provider of local residential statistics.
He said with 3,513 homes listed for sale, there was a six to eight month inventory of homes priced below $150,000 at the end of 2011. “A balanced market inventory lies in the five-to six-month range,” Bynum added.
FORT SMITH REGION
Home sales during 2011 totaled a combined 1,673 in Crawford and Sebastian counties, up 2.4% compared to 2010, according to info provided by Weichert Realtor-King Realty Group. The gain ended four consecutive years of home sales in the two counties.
Crawford County had 523 home sales during 2011, up 7.83% compared to 2010. Sebastian County posted 1,150 home sales during 2011, beating by a nose the 1,148 home sales during 2010.
The Fort Smith area also saw a reduction in home inventory. The inventory in Crawford and Sebastian counties reached 1,420 in January 2011, up 15.9% compared to January 2010. But throughout 2011 the inventory levels began to fall as more homes were sold or pulled off the market. The inventory level in the two counties was 1,152 in December, down almost 19% from the January level.
NORTHWEST ARKANSAS INVENTORY
The recent inventory decline in Northwest Arkansas is related to foreclosures and bank-owned properties recently pulled off the market by out-of-state lenders having to file additional paperwork with the Arkansas Secretary of State. Agents expect it could take a minimum of six months before many of those foreclosure listings go back on the market.
Foreclosures comprised about 30% of the total home sales recorded in 2011 for Benton and Washington counties, but that market has shrunk following the Sept. 29 court ruling which temporarily shut down the foreclosure pipeline for out-of-state lenders.
Vicki Briolet , agent with Crye-Leike in Bentonville, said she was able to sell a home she owned after the foreclosures disappeared from the local inventory in November. “I had been trying to sell this home for almost a year, but it was hard to get any showings. In the $110,000 to $125,000 price range buyers were all shopping the short sale/ foreclosure market, making it really difficult for traditional sellers like me,” she said.
Briolet got a full price offer and closed the deal early last month. “I know my home sold because I did several updates and for once it didn’t have to compete with the rock-bottom priced foreclosures,” she said.
Home prices continued to decline throughout 2011 as buyers shopped for bargain-basement deals. For the full year, the median home price recorded across Northwest Arkansas was $120,000, down from $129,000 in 2010, according to MountData.
Interestingly enough without the foreclosure component, median home sale prices in the month of December rose to $139,000, up from $125,000 in the prior year, Bynum reports.
George Faucette, president of the local Coldwell Banker franchise, expects home prices to remain vulnerable as long as distressed properties linger in limbo. He said these properties will have to work their way through the inventory before prices will truly stabilize.
Bynum says the local market still suffers from tepid buyer demand despite an average 3.9% interest rate as there is no apparent catalyst to get qualified buyers off the fence.
Last week the Federal Reserve Board released a white paper that outlined the need to help revitalize the faint housing industry and jump start the overall economy.
The U.S. Housing Market: Current Conditions and Policy Considerations, calls for increased lending to creditworthy buyers, more loan modifications, affordable mortgage refinance and short sales for consumers. These key areas can reduce the rising inventory of foreclosed homes and help stabilize housing markets across the country, the paper noted.