Fort Smith real estate market shows resilience

The Fort Smith metro area had its share of challenges in 2012 with the closing of Whirlpool and other manufacturing job losses, but the local housing market held up well, according to local Realtors and developers.

Elizabeth King, agent and co-owner of  Weichert King Realty, said the year was an interesting one, as sales were somewhat cyclical and hard to predict.

Home sales across Sebastian County were down slightly in December with 85 transactions totaling $11.313 million in sales. This compared to 90 transactions worth $11.778 million in December 2011, according to Paul Bynum at MountData.com.

Crawford County sales were flat in December at 36 transactions, compared to 37 a year ago. Home sales in Crawford County totaled $4.665 million, up from $3.823 million in the year-ago period.

Reflecting on the full year, Sebastian County agents sold 1,119 homes in 2012. These sales totaled $153.621 million, relatively flat against $154.253 million in total sales from 2011. The difference in total volume amounted to 0.4% between the two years.

King said 2012 wasn’t the best year she can remember, but it was not near the worst either. She said there was a mix of first-time buyers, investors and homeowners looking to move up in 2012 in spite of high employment rates and an unpredictable economy.

Clif Warnock, veteran broker and owner of Warnock Real Estate in Fort Smith, said homebuyer demand is stable. He said consumers with a job and decent credit can still secure mortgages.

He said his firm’s sales were up sightly in 2012, despite all the negative economic news at home and on the national scene.

“Personally we had a pretty strong year, but our agents work really hard on a full-time basis. We didn’t see any major setbacks in 2012 from tighter credit,” he said.

King said tighter credit standards do hurt some people who have recent job changes and that is likely to be a problem for some time. Warnock and King said rental demand was very strong in the Fort Smith area as the university continues to grow.

"Our rental houses are rarely vacant. I just advertised one at $700 near the (University of Arkansas at Fort Smith) and within a day I got two applications. Within two days I had five more applications come in for this one house. Our apartments are also staying at least 90% occupied, many folks relying on Section 8 HUD housing assistance, and I don’t see that changing in 2013,” King said.

FEWER AGENTS
Warnock and King said their firms had benefited from a reduction in active agents last year.

“Real estate is not a passive business and it costs agents to hang their license with a broker. There are renewal fees and continuing education costs to stay current. A large number of part-time agents have gone inactive, which has meant more opportunity for agents working full-time,” King said.

She estimates there are roughly 500 agents active in the local market to start 2013. King said this is down from 650 or so at the market peak in 2008.

Warnock says the days of low hanging fruit are long gone, and agents have to work leads, push open houses and market for sellers like never before. King said buyers today are educated and shopping on the Internet a full month or so before they every make a call to a local agent.

NEW CONSTRUCTION
Rob Coleman, vice president of ERC Companies in Fort Smith, said his firm is cautiously moving into 2013 with a new single-family development which should take a few years to build out.

Coleman said ERC just closed on 105 lots near the base of Fianna Hills with access along South 36th Terrace near Cook Elementary School. This is the Park Meadow development.

He said there are 35 lots in Park Meadow Phase I. These homes will be priced between $170,000 and $220,000, with lots in the mid $30,000 range. These home footprints range from 1,600- to-2,200 square feet.

“We really like this project because there hasn’t been any new development in the Cook School District for several years and we think there is ample demand in this great location,” he said.

Coleman’s Reata development at Chaffee Crossing is in its third year with all but 14 lots sold and built out with a mixture of speculative and custom homes.

“We started with 50 lots ranging in price from $44,900 to $69,900 and we are down to 14. This subdivision has done well, appraisals are going up there,” he said.

Coleman expects to finish out the 14 homes this year, but said it may take a little longer and that would be fine too, because he wants to ensure the subdivision quality and custom feel is maintained.

PRICE INCREASES
While the number of homes sold in 2012 didn’t rise, the prices did. MountData reports the median home price for all sales last year across Sebastian County was $118,750. Prices rose 6.9% from $111,000 during 2011. Average sales prices totaled $137,255, up 3.4% in the year-over-year period.

Economists say the uptick in home sales prices are a result of fewer foreclosure sales in 2012. And while bank-owned properties have started to increase slightly in the multiple listing service, agents say they are being snapped up pretty quickly by savvy buyers.

King said home prices have gone up, but not enough to entice a lot of sellers to list their homes.

She has run into a few families who decided to refinance at these rock-bottom interest rates and update their homes so they could stay put a little longer.

“Prices are going to need to rise more for these folks to sell and repurchase,” King said.

King and Warnock said sellers who do want to move up or buyers shopping for their first home have ample supplies to chose from in the local market. With interest rates well below 4%, Warnock said homeownership is cheaper than renting.

Fort Smith Metro Area Home Sales
Sebastian County
2012: $153.621 million
2011: $154.253 million
2010: $160.442 million

Crawford County
2012: $60.289 million
2011: $59.225 million
2010: $58.355 million

Median Home Prices
Sebastian County
2012: $116,700
2011: $111,000
2010: $115,000

Crawford County
2012: $112,250
2011: $105,000
2010: $110,000