Wal-Mart effect moves area home prices higher

Median home prices across Northwest Arkansas got a 21% boost in January, thanks to shoppers purchasing more expensive homes and the ongoing Wal-Mart-effect. Last month local agents sold 319 homes in the two-county area, 15 less than a year ago, according to the latest report from MountData.com.

The total sales volume in January equaled $51.312 million, 5% percent more than in 2011 and a 45% increase from 2010.

Median sales prices totaled $133,000, compared to $110,000 a year ago. The robust uptick in median home values relates to the number of homes sold in higher price categories, according to research analyst Paul Bynum of MountData.

“We initially thought the price increase was related fewer foreclosures deals amid the ongoing mortgage lender litigation, but a closer look at the numbers tells a different story,” Bynum said.

“For most of last year about a third of the sales were for properties valued over $150,000. By December, that metric had risen to nearly 45% with biggest jump seen in the $250,000 – $350,000 range.” he added.

Simply put, there have been more higher-end properties being sold in recent months than in the past couple of years, thanks largely to Wal-Mart moving its retail segment back to Bentonville from New York. The retail giant announced the move in October relocating about 275 employees.

Since then, agents across the region report more activity centered around the Walmart-vendor dynamic. Walmart set Feb. 1 as the target date for completion of that transfer.

George Faucette, CEO of the local Coldwell Banker franchise, said his firm recorded its best volume ever for the months of December and January. He attributed the gains to rising median home prices and an uptick in high-end home sales. Faucette said whatever the reason, the end message is positive for the region.

“I have seen an increase in the higher end – say around $400,000-$600,000 price range. I listed and sold 2 homes in Lochmoor Club in less than 45 days – one of those buyers was from New York. We are fortunate here to have so much going for us with Walmart and the vendor community as well as Crystal Bridges,” said Nicky Dou, broker with Century 21 Exclamation Realty in Rogers.

Jean Ann Gilbert, agent with Crye-Leike in Bentonville, said it’s not just the Walmart-effect at work. “I have recently sold two high-end properties to local people who just wanted to move up.”

That wasn’t surprising to Bynum who said with the average interest rate of 3.98% buyers can get a lot for the money.

“With tighter mortgage underwriting, we can also be sure the buyers shopping today are fully equipped to afford the homes they are purchasing. But perhaps with improving job prospects more consumers feel better about buying more house,” Bynum said.

The local inventory of homes listed for sale totaled 3,528 properties in January, down 28% from a year ago. Roughly 90% of those home were existing properties, with 340 homes listed as new construction.

Bynum estimates there is an 8.5-month supply of homes, still considered a buyer’s market in most price categories with the exception of properties valued below $100,000. A neutral market lies in the 5.5-month range.

The National Association of Realtors estimates there was an average 6-month inventory of homes listed for sale across the U.S. in January.

Homes that sold in January stayed on the market an average 82 days from initial listing to pending sale status. That was two day less than sales completed in December.