May good for Arkansas’ large-market home sales

Northwest Arkansas continues to be the most active regional market for home sales in the state, with the Fort Smith and Jonesboro regions seeing home sales fall behind what was a slow 2011 pace.

There were 1,727 homes sold during May in the four large market areas measured by the The City Wire’s Arkansas Home Sales Report, up 9.79% compared to May 2011, but down almost 14% compared to May 2010.

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

During the first five months of the year, home sales in the four markets totaled 6,952, up 3.42% compared to the same period in 2011, but down 10.08% compared to the same period in 2010.

Michael Pakko, University of Arkansas Institute for Economic Advancement chief economist and state economic forecaster, predicted earlier this year that sales would improve throughout 2012. He said 2011 was one of the worst years on record for home sales.

So far, his prediction has proven true as sales have been up through May. Pakko is waiting to see how sales go in the summer months as those will go a long way toward indicating the health of Arkansas’ housing market. June, July and August, he said, are traditionally the months in which home sales are strongest.

Still, he said May sales reports are important to consider.

“Looking at the seasonal patterns, May is usually a relatively strong month – although usually not as important as June, July and August,” Pakko explained. “Over the past five years, May sales have accounted for approximately 10% of total annual sales. … Strong growth for the month translates into improved figures for year-to-date sales.”

REGIONAL FIGURES (Year-to-date)
Central Arkansas — Home sales
Jan.-May 2012: 3,362
Jan.-May 2011: 3,135
Jan.-May 2010: 3,942

Fort Smith area — Home sales
Jan.-May 2012: 628
Jan.-May 2011: 651
Jan.-May 2010: 784

Jonesboro area — Home sales
Jan.-May 2012: 658
Jan.-May 2011: 704
Jan.-May 2010: 795

Northwest Arkansas — Home sales
Jan.-May 2012: 2,304
Jan.-May 2011: 2,232
Jan.-May 2010: 2,210

The top five counties in terms of Jan.-May 2012 home sales:
Pulaski — 1,614, up compared to 1,489 in Jan.-May 2011
Benton — 1,444, up compared to 1,354 in Jan.-May 2011
Washington — 860, down compared to 878 in Jan.-May 2011
Saline — 502, up compared to 486 in Jan.-May 2011
Craighead — 500, down compared to 580 in Jan.-May 2011

REGIONAL NOTES
• Northwest Arkansas
In Northwest Arkansas, agents like Vickie Briolat of Crye-Leike say demand is picking up. She is seeing more cash deals than she can remember in recent years.

“I have had three cash deals in the past 30 days, two of them have just closed — both transactions were over $200,000. I also have an $84,000 cash deal set to close in early July. These deals were not investor related, but there are some investors shopping in this market again,” Briolat said.

George Faucette, CEO of a Coldwell Banker franchise in Northwest Arkansas, attributes the uptick in cash deals to more investor activity.

Faucette is optimistic about the back of 2012. He said his firm’s completed business is up 31% on volume through five months of this year, while unit sales rose 26%.

“We have budgeted growth of 13% in 2012. Our closed business through five months, annualized, puts us on track to sustain a 16% growth rate this year,” he said.

• Fort Smith region
Kevin King, broker and owner of Weichert King Realty in Fort Smith, said the regional market there has stalled in part because it’s more difficult to get a home loan with a 640 credit score now required by most lenders.

“While interest rates are incredibly low, credit standards remain out of reach for more buyers. Job security is also a big concern in this market, which has more homeowners staying put rather than moving up,” King said.

Home prices across Sebastian County are holding up despite the tepid market condition. Median prices for the first five month of this year were $110,000, compared to $106,900 a year ago. King said prices in this market tend to be pretty steady despite fewer buyers. Inventory remains adequate and there has not been a major foreclosure problem like in other markets.

A bright spot in the Fort Smith real estate market is a stronger demand for rental property, which is bringing out some investors and more cash deals. King said about 20% to 30% of all deals being done in the local market are for cash, which is particularly high.

• Jonesboro area
Although the year-to-date numbers are trending downward in the Jonesboro area, Jonesboro Realtor Sherlyn Blackwell remains optimistic that the regional housing market is improving. Blackwell said development of a new, 250-bed NEA Baptist Memorial Hospital has helped.
www.jonesbororealestate.com

The $200 million facility is nearing completion and will replace the current 100-bed one that houses the hospital. The expanded hospital has brought more jobs to the community and has led to a welcome situation — large homes are selling again.

“Last year, you couldn't give those away,” she said of homes costing $400,000 or more. “You really, really had to work to sell homes last year.”

• Central Arkansas
Benton Realtor Tom Baxley said he believes improving sales in central Arkansas in general and Saline County in particular are signs of increased consumer confidence. He believes there has been pent up demand for some time, with people reluctant to purchase homes. Mortgage rates below 4% is one of the factors Baxley said have motivated people to purchases houses.

“I feel like there's overall optimism in the market," he said. "Low rates are good, but there's overall optimism in the continued improvement in the economy."

Baxley said he's noticed more builders putting up homes and houses that have stood vacant for extended amounts of time attracting buyers.

"I think (this market) will continue to grow," he said.

Link here for the complete data from the May 2012 Arkansas Home Sales Report.