NWA home prices slide in 2011

by The City Wire staff ([email protected]) 96 views 

Northwest Arkansas home values tumbled in 2011 as foreclosures and short sale transactions kept a lid on median sales prices from Fayetteville to Bella Vista, according to MountData’s annual report.

Just one of the 11 zip codes posted year-over-year price gains in 2011. (See chart below.)

Fayetteville’s 72703, which is the northeastern part of the city, continues to bring the highest dollar value per square foot. New construction near the median price of $202,300 garnered $108 per square foot in 2011, down from $112 a year ago. Existing homes selling at roughly $200,000 last year averaged $100 per square foot, up from $91 in the prior year, according to the report.

Tami Fagan, an agent in Crye-Leike’s Fayetteville office, knows the area well. Fagan said there has been a limited supply of homes available in eastern Fayetteville.

“Many of these neighborhoods were somewhat sheltered from the foreclosure woes and oversupply concerns that hurt pricing in other areas,” she said.

Fagan said it’s no surprise that Fayetteville’s overall pricing continues to be resilient.

“We are seeing a major revitalization going on in south Fayetteville. The older homes are going pretty cheap to investors and contractors who are renovating or tearing them down to build new energy efficient properties. … Jacobs Newell has sold at least 10 new homes in south Fayetteville in recent months ranging from $135 to $160 a square foot,” Fagan said.

Charles Hudson Sr,. a veteran real estate appraiser in Rogers, describes the two-county region as a mixed bag.

“We continue to see foreclosures devastate home prices in parts of Springdale, while other areas such as the Quail Ridge subdivision in Bentonville is actually recovering in price,” he said.

Hudson said the areas in Benton County under construction in 2007 and were affected by the initial oversupply have been the first to recover.

“In many cases the builders in Benton County turned the homes back to the banks and stopped new construction. Those homes have largely been absorbed and prices are stabilizing in many of those neighborhoods,” Hudson said.

MountData reports that Bentonville, western Rogers and the west side of Bella Vista saw slight declines in value last year.

The median home price in Bentonville was $174,950 in 2011. At the level, buyers paid an average $80 per square foot from an existing home and $91 for new construction. Overall, Bentonville’s median home price fell nearly 3 percent in 2011.

Hudson said the hardest hit areas were the older neighborhoods of Springdale and the residential construction built as affordable homes during the great housing boom between 2003 and 2007.

He said many of those first time buyers during the boom have moved on because of lost jobs and those homes are still working their way through the foreclosure pipeline.

“Local home prices won’t totally stabilize until the foreclosure crisis has run its course and it’s anyone’s guess when that will actually take place,” he said.

Greg Spencer, broker with Weichert’s Downum Group in Springdale, is optimistic that prices are bottoming for many local neighborhoods. He said the overall market prices were down in 2011, but there also were more homes sold.

“The market is still fragile, but we are optimistic for 2012. We are seeing some multiple offers on occasion and also finding more investors are back in the market shopping for good deals,” Spencer said.

He agreed the foreclosure effect is still putting downward pressure regional home prices. In 2011, about 30% of the homes sold in Benton and Washington counties were foreclosures or short sales.