High-End Housing Shows Increased Activity (Opinion)

This article focuses on the upper-end, single-family sector of the residential real estate market in Benton and Washington counties.  Specifically, sales in the $500,000-to-$999,999 and $1 million-and-above price ranges are considered.

Sales through the Multiple Listing Service are the primary consideration in this article. The data includes both new and previously owned homes.

In Benton County, the actual sales price for homes listed between $500,000 and $999,999 ranged from $500,000 to $995,000 in both 2011 and 2012. The number of sales in this category grew 26.9 percent between 2011 and 2012, while the mean sales price dipped 0.8 percent. The mean sales price per SF of heated area fell about 2.4 percent between 2011 and 2012.

In the $1 million-plus category, the actual sales price range was $1.1 million to $2.45 million in 2011, and $1 million to $1.3 million in 2012. The number of sales in this category remained unchanged between 2011 and 2012. However, the mean sales price and mean sales price per SF of heated area dropped 23 percent and 16.6 percent, respectively.

In Washington County, in the $500,000-to-$999,999 category, the actual sales price range was $500,000 to $910,000 in 2011, and $500,000 to $950,000 in 2012. The number of sales in this category rose 36.7 percent between 2011 and 2012. The mean sales price decreased 2.4 percent between 2011 and 2012. However, the mean sales price per SF of heated area increased 0.68 percent.

In the $1 million-and-above category, the actual sales prices in 2011 and 2012 ranged from $1.03 million to $2.5 million and from $1.1 million to $1.85 million, respectively. The number of sales in this category grew 50 percent between 2011 and 2012. However, there were only four sales in 2011 and six in 2012. Mean sales price and mean sales price per SF of heated area fell 13.5 percent and 25.4 percent, respectively, between 2011 and 2012.

Overall, the MLS data reflects a substantial increase — 28.6 percent — in the number of high-end, single-family home sales in the two-county area between 2011 and 2012. However, the mean sales price was down in both price ranges in each county. The mean sales price per SF of heated area also was down in both price ranges in each county, with the exception of the $500,000-to-$999,999 category in Washington County, which rose slightly.

As of the date of preparation of this article, 221 homes were offered for sale through the MLS in Benton and Washington counties in the $500,000-plus range. Based on the 2012 absorption rate, this represents a supply of nearly 1.5 years. A positive note is that this is down from 2.1 years in March 2012.

It should be noted that Streetsmart’s research of county property records supports that there were 24 new home sales in active subdivisions in the $500,000-plus range in the two-county area — 20 in Benton and four in Washington — in the last half of 2012. This compares to 19 new home sales — 15 in Benton and four in Washington — in the last half of 2011. Streetsmart defines active subdivisions as those that currently have construction activity.

Tom Reed is a partner in Streetsmart NWA, which produces reports pertaining to the residential, multifamily and commercial sectors of the real estate market. He can be contacted at (479) 575-9100.