Arkansas’ large-market home sales fall in April

Thanks primarily to year-to-date gains in the central Arkansas and Northwest Arkansas markets, home sales in Arkansas’ large-market areas are up 0.92% for the first four months of 2012 compared to the 2011 period.

But April was brutal.

There were 1,455 homes sold during April in the four large market areas measured by the The City Wire’s Arkansas Home Sales Report, down 9.01% compared to April 2011 and down almost 30% compared to April 2010.

The City Wire’s Arkansas Home Sales Report captures home sales data in the state’s 14 most populated counties among the state’s four largest metro areas contained primarily within the state — Central Arkansas, 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.

‘GRAIN OF SALT’
Homes sales in Arkansas have been tracked monthly since 2005 and April’s totals were the lowest on record. Michael Pakko, chief economist for the University of Arkansas at Little Rock Institute for Economic Advancement and state economic forecaster, was surprised by the April numbers.

He said the trend this year has been for markets to grow steadily, but not rapidly. Pakko believes the trend will hold up this year and April may be an anomaly.

“It’s good practice to take one month’s observations with a grain of salt,” he said.

The combined value of homes sold in the reporting area during the first four months of 2012 totaled $805.938 million, up 7.85% compared to the 2011 period and up 1.54% compared to the 2010 period. The average price for homes sold during the first four months in the four markets was $155,887, up 6.87% compared to the 2011 period and up 11.54% compared to the 2010 period.

During April, the combined value of homes sold in the 14 counties totaled $234.692 million, up 1.66% compared to April 2011, and down 23.66% compared to April 2010.

REGIONAL FIGURES
Central Arkansas — Home sales
Jan.-April 2012: 2,483
Jan.-April 2011: 2,374
Jan.-April 2010: 2,897

Fort Smith area — Home sales
Jan.-April 2012: 482
Jan.-April 2011: 498
Jan.-April 2010: 574

Jonesboro area — Home sales
Jan.-April 2012: 499
Jan.-April 2011: 564
Jan.-April 2010: 590

Northwest Arkansas — Home sales
Jan.-April 2012: 1,706
Jan.-April 2011: 1,687
Jan.-April 2010: 1,618

The top five counties in terms of Jan.-March 2012 home sales:
Pulaski — 1,176, up compared to 1,128 in Jan.-April 2011
Benton — 1,072, up compared to 1,012 in Jan.-April 2011
Washington — 634, down compared to 675 in Jan.-April 2011
Craighead — 377, down compared to 468 in Jan.-April 2011
Saline — 369, up compared to 359 in Jan.-April 2011

MARKET ASSESSMENTS
Vicki Briolat, agent with Crye-Leike in Bentonville, said the market is definitely stronger than a year ago, even if the April sales don’t concur.

“I am seeing multiple offers on properties for the first time in ages. I have gotten three offers in the past two days for listings and I am writing an offer for a buyer this week. I could not be any busier or happier after a rough year and a half,” Briolat said.

Little Rock Realtor Danny Been agreed that conditions were slow in February and March, but business has improved since then.

“May is looking good,” he said. “After taxes were paid, people started to get back out there.”

Been said one trend he’s seen develop this year is difficulty in closing deals. Appraisers, banks, title companies and all parties to transactions are reviewing documents and the numbers closer than in the past. Also, lenders tend to check the value of homes right up to the closing date. Declining home values in some areas have caused bankers to take precautions against lending more money than homes are worth.

Although home sales declined almost 12% during April in Sebastian County, Kevin King, principal with Weichert Realtors-King Realty in Fort Smith, believes the number of homes sold in Fort Smith is up, “but just barely.

“I think a lot of that could be lower sales there (out in Sebastian County),” King explained.

King, who predicts that 2012 home sales will be “moderately better” compared to 2011, said his “rental business has gone up … and rental rates are going up because of that better demand.”

Part of the higher rental demand is from a mortgage-eligibility requirement to have higher credit scores, King said — providing support to Been’s point about more careful scrutiny of mortgages.

White County is one of those areas that saw sales growth in April. Searcy Realtor Larry DeGroat said he’s not surprised because the economy is diverse in his county. Industries have shut down, but DeGroat said the loss of major employers such as Whirlpool and Yarnell Ice Cream Company have hurt, but natural gas companies operating along the Fayetteville Shale Play have picked up the slack.

DeGroat said the outlook in Searcy is looking sunnier — Yarnell’s assets were purchased last year by Chicago-based snack manufacturer Schulze & Burch Biscuit Co. for $1.3 million and the company resumed operations in April.

The Jonesboro market was down in April, but Realtor Brenda Mitchell said conditions have improved. The April sales represent closed transactions that were under contract primarily in February and March. Mitchell said the area saw fewer buyers in February and March and she’s not sure why that is.

“Things flatlined a bit in February and March, but have picked up,” she said. “The market is just not as predictable as it was.”

Link here for a PDF document of the report data.