Benton County leads state in home sales

Pulaski County, Arkansas’ largest by population, is no longer the likely list topper for the number of homes sold in a given period. Benton County Realtors sold 883 homes during the first quarter of 2013, higher than the 869 homes sold in Pulaski County during the period.

Home sales in Arkansas’ four largest markets during the first three months of 2013 totaled 4,057, up 8.17% compared to the 2012 period. The value of homes sold during the quarter totaled $646.218 million, up 15.12% compared to the 2012 period, according to The City Wire’s Arkansas Home Sales Report.

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.

MARKET DIFFERENCES
Increases in the number and value of homes sold is not broad. For the first quarter of 2013, the number of homes sold in central Arkansas are up 11.14%, down 0.51% in the Jonesboro area, up 12.05% in Northwest Arkansas, and down 5.2% in the Fort Smith metro.

Jeff Collins, an economist for The City Wire, said he was surprised by the number of homes sold in central Arkansas and Benton County.

“What surprises me is the strength of the units of the sold considering the weakness in the central Arkansas job market,” he said. “That's a good sign.”

Collins said the increase in sales in central Arkansas is indicative of a lot of pent up demand. Those buyers who were sitting on the sidelines waiting for the best deal have been enticed by low interest rates and rising prices – one never knows how long interest rates will stay low and whether prices will continue to climb in the future.

As for Benton County, Collins said the housing markets there in March were stronger than in any other area covered in the Arkansas Home Sales Report. He said the improved markets have a lot to do with job grown in Benton County.

In general, Collins said there has been some positive job growth in Arkansas in the services economy, particularly in education and health. Job growth, of course, leads to improved housing markets.

Collins also said the Fort Smith market continues to struggle with unemployment, and slumping sales are indicative of the local economy.

The number of homes sold in the Fort Smith and Jonesboro areas are down compared to the 2011 period, with Fort Smith down 3.53% compared to the 2011 quarter and Jonesboro is down 4.65% compared to 2011.

The average sales price of a home sold in the four markets during the first quarter of 2013 was $159,285, up 3.8% compared to the 2012 period, and up 8.8% compared to the 2011 period.

The average days on market for a home in the four combined markets during the first quarter was 101.91, an improvement over the 110.03 days during the same period of 2012.

During March, home sales were up 12.99% in central Arkansas, up 10.09% in Northwest Arkansas, down 3.5% in the Fort Smith metro, and down 8.05% in the Jonesboro area.

THE REGIONAL PICTURE
Central Arkansas — Home sales
Jan.-March 2013: 1,926
Jan.-March 2012: 1,722
Jan.-March 2011: 1,645

Fort Smith area — Home sales
Jan.-March 2013: 328
Jan.-March 2012: 346
Jan.-March 2011: 340

Jonesboro area — Home sales
Jan.-March 2013: 390
Jan.-March 2012: 392
Jan.-March 2011: 409

Northwest Arkansas — Home sales
Jan.-March 2013: 1,413
Jan.-March 2012: 1,261
Jan.-March 2011: 1,130

The top five counties in terms of Jan.-March 2013 home sales:
Benton — 883, up compared to 456 in 2012
Pulaski — 869, up compared to 788 in 2012
Washington — 530, up compared to 473 in 2012
Faulkner — 308, up compared to 248 in 2012
Craighead (tied)— 305, down compared to 308 in 2012
Saline (tied)— 305, up compared to 259 in 2012

Link here for a PDF document of the March 2013 data.

CREDIT SCORES, FORECLOSURE ISSUES
Ronnie Sutton, a Realtor with Century 21 United in Bryant (central Arkansas), said the increasing sales and average prices in Saline County are welcome, but there's a reason for the higher sales prices – people are buying more new homes than in the past.

Sutton said new homes generally cost about as much or a bit more than existing homes that are between four and six yeas old. That means newer homes are moving quickly, but some existing ones remain in inventory – a situation that's less than ideal for people wanting to sell their houses and make money on the deal.

Sutton said it is a situation that will “work through” in time, but one he's definitely noticed in the market. Another factor pushing up average prices has to do with tighter credit scores yielding “more qualified” buyers than in years past.

For example, the minimum credit score for someone wanting to purchase a home through a mortgage backed by the Federal Housing Authority is 640. Sutton said four or five years ago, the minimum credit score was 540 and that has frozen some buyers out of the market.

Sutton also said some markets are still impacted by foreclosures. While the number of those has decreased, Sutton said foreclosures come into play in neighborhoods where foreclosed properties have effectively weighed on comparable sales data, thus reducing fair market values of nearby homes. In other words, some buyers are having trouble selling homes for the amount they want when the prices of previously sold foreclosure homes come into play.

MARKET CONFIDENCE
Still, Sutton said home owners are starting to build equity in their houses again. Home values have improved over the past year and Sutton said he believes that trend will continue. Generally, he said interest rates are still near historic lows and he gets the sense that that people feel better about the economy than they did a year ago.

Dell Parker, a realtor with Coldwell Banker Village Communities in Jonesboro, said he's already seen sales improve in his market. Parker said he's closed 12 transactions this year already and has 14 in the works. A year ago, Parker said he had closed on four homes through March.

“New and existing sales are up,” he said, adding that sales in his market started to improve in March last year and have generally risen since.

Parker said Jonesboro was shielded a bit from the recession because the town has emerged as a hub for seven surrounding counties. He said Jonesboro is a destination for people in those surrounding counties wanting to shop, eat, go to college at Arkansas State University or get medical attention.

RURAL LOAN ‘THREAT’
In Sebastian County, sales of new and existing homes were valued at roughly $14.688 million with 102 homes sold in March, which was an increase of 25.46% from March of last year.

Crossing the river into Crawford County, the numbers were bleak. Only 36 homes were sold at a value of $4.251 million, a drop of 23.09% from the same month last year.
Overall, home sales in both markets are down 5.2% during the first quarter of 2013 compared to the same quarter of 2012.

Chaney Brewer, an agent at Jim White Realty, said there are a few reasons why Crawford County's numbers could be so much weaker than Sebastian County's.

"One of the big things that's been going on right now is the threat of rural development loans going away," he said, adding that cities as large as Van Buren could be affected should the loan option disappear.

MORE UPSCALE BUYERS
George Faucette, CEO of the Coldwell Banker franchise in Northwest Arkansas, said the firm’s first quarter sales rose 22% from 2012, with an impressive gain of 64% from 2011.

MountData.com reports agents across the two-counties sold 1,413 homes valued at $241.24 million in the first quarter of this year. Not only did agents sell more homes, but the prices of those properties were also higher and boosted total sales volume by 19% from a year ago.

Median prices of the homes that have sold this year totaled $140,000, up 4.47% from a year ago, and 18.8% higher than in 2011, according to Paul Bynum, statistician with MountData.com.

Faucette says there are more higher-end home selling across his firm. He reports the average price of homes closed in March was $192,000, up $30,000 from the same month last year.

He said part of the reason prices are moving up is that more upscale buyers are in the market, and they are closing deals.