Residential market rallies through first half of 2013

The local real estate market has picked up steam this year rallying to the best results since the 2008 recession, according to local agents.

June was no exception with agents selling 620 homes in Benton and Washington counties, according to MountData.com. There were another 676 pending sales as of July 1. Pending sales are a leading indicator of future transactions, according to Paul Bynum, market analyst with MountData.com.

Unit sales in Benton County rose 7.7% in June from a year ago and sales volume jumped 11% to $78 million. Through the first half of 2013 this local market has been hot with 2,125 sales valued in excess of $392.685 million. Agents sold 275 more homes this year than last and total sales volume is up by more the $72 million through the first half of the year in Benton County.

In June, Washington County units sales were down 2% at 244 properties. But total sales volume rose 3.2% to $43.107 million, according to MountData.com.

Through the first half of this year, agents sold 1,267 homes in Washington County, units rose 12.8%. Total volume was more than $218.598 million, up 22% from the same period last year.

The local Coldwell Banker franchise reports its sales volume rose 13% in June and is up 25% through the first half the year, compared to the same periods in 2012, according to CEO George Faucette.

“Our new written business continues to keep pace with the closed business,” Faucette said.

It's a sign the engines propelling the local market continue to run at steady speeds.

SELLER’S MARKET
The term “seller’s market” has not been said for several years across Northwest Arkansas amid record inventory levels left over from the market peak in 2006.

But 2013 is a different story as inventory levels remain low with 3,596 homes listed for sale as of July 1. Roughly 290 of those listings are new properties and about 300 more are bank-owned foreclosures.

Bynum said there is a shortage of homes – less than a four-month supply – priced below $100,000, in the Northwest market. He considers that a seller’s market. Jim Long, agent with Crye Leike Real Estate in Bentonville, agreed there isn’t enough quality property listings below $100,000, or even $125,000.

“We could all use more listings in these lower price categories because there are plenty of buyers looking,” Long said.

FIRST-TIME BUYER
Brianna Manning, a senior at the University of Arkansas, spent the past three months looking for her first home.

“We must have looked at 30 or more houses within my budget of $85,000. And most were in poor shape or would require too much money to get them up to my liking,” Manning said.

But she did recently purchase a foreclosure in south Springdale, near the Fayetteville line for $75,500, a great deal at roughly $58 per square foot.

“I got a three bedroom, two bath home with a large backyard for my Labrador, Barkey, and it came with all the appliances, except the washer and dryer,” Manning said.

At 20, Manning said she really didn’t want to throw money away renting if she could get a home of her own. With a little help from family, Manning said she qualified for an FHA loan and her total payment is $500 per month, which is $200 less than just about any three bedroom home she could have rented.

“The location is perfect for me for it’s not too far from the stable where I keep my horse and it’s just a short drive to the university with easy access to I-540.” Manning said.

LOCATION VALUE
Vickie Briolat, agent with Crye-Leike Real Estate, said location is important to seller’s getting the prices they want.

“While prices are better in many areas, there is still a gap in the outlying areas such as Pea Ridge,” Briolat said. “I have a beautiful listing in Pea Ridge, 1,700 square-feet, granite countertops, pristine condition home built in 2006. We have gotten three offers, but no where near the $144,000 listing price. Two were so low, we couldn’t even counter.”

She has another listing in Pea Ridge at $108,000 and the top offer received has been $90,000.

“While the market is much busier, there is still the mindset among some buyers that they can steal the property. While that may be true when bidding on foreclosures, that is not the case across the board,” Briolat said.

She said homes in the larger cities are selling much better than in the outlying areas, which have not caught up with broader market trends.

PRICE APPRECIATION
Median home prices in Benton County have risen $11,000 this year, up 7.9% from the same period in 2012. The median price per-square-foot was $81.80 among the 2,125 homes sold in Benton County this year. That compared to $75.10 last year, and $66.8 in 2011.

Agents said the better pricing is tied directly to the lower inventory levels and steady demand from buyers across Benton County, one of the fastest growing areas in the state and nation.

In Washington County, the median home price for the first half of 2013 was $146,300, that is up 9.1% from a year ago. 
The price per-square-foot of $85.2 increased from $79.8 a year ago. In 2011, the median price per-square-foot was $69.60.

As long as inventory levels stay low and buyers feel compelled to act there is still room for price appreciation in the back half of this year. However, agents don’t expect prices to escalate as quickly as there are more foreclosures moving back into the market.

Long said there were 44 new foreclosure listing to hit the MLS between July 1 and July 10.

Northwest Arkansas Home Sales (January-June)
(Benton and Washington Counties)

Total Sales Volume
2013: $611.543 million
2012: $498.931 million

Unit Sales
2013: 3,393
2012: 2,971

Median Price
2013: $148,750
2012: $135,500

Source: MountData.com