September home sales rally, prices dip

Agents across Benton and Washington counties sold 588 homes in September, or 100 more transactions than they closed in the year-ago period, according to MountData.com.

Paul Bynum, statistician with MountData.com, said local agents rang up more than $105 million in sales last month, a gain of 19% from September 2012. But one interesting metric in the recent report was a dip in median home prices, when compared to the year-ago period.

Home prices have risen consistently for the past 18 months, but that upward trend was snapped in September when median sales prices dipped 2% to $142,000 in Benton County. In Washington County median home prices slid 2.87% to $135,000 in September, when compared to the year-ago period.

SHUTDOWN INTERFERENCE
Jim Long, agent with Crye-Leike Real Estate in Bentonville, said sales are steady with a fair number of buyers looking to purchase the home of their dreams if the government shutdown doesn’t interfere.

Long was referring to a pending contract he wrote for buyers applying for a 100% Rural Development (RD) loan. He said the family got their application in and approved by the U.S. Department of Agriculture office just head of the Oct. 31 deadline that will render much of the eligibility area in Northwest Arkansas void because of the recent population boom recorded by the 2010 Census.

“The USDA office has been closed for two weeks because of the government shutdown, and my buyers can’t get a closing date. In the meantime, the sellers are eager to close the deal and relocate to Joplin, because they are having to commute at this point,” Long said.

The RD loan provides 100% financing, and should Long’s clients have to switch that to an FHA loan, they will be looking a 3% down payment and higher closing costs.

“Time is running out for my buyers, and if they have to go FHA it will take all of their savings to close the deal,” Long said. “The 100% deal also wouldn’t be available to them if they have to start over with a new application given the backlog in processing and the approaching Oct. 31 deadline.”

Bentonville, Bella Vista, Centerton, Cave Springs, Lowell, Siloam Springs and Bethel Heights, all of which had been part of the program are now considered either too large by city population, or too close to a larger metro area to qualify for the RD option after Oct. 31. In Washington County, Elm Springs is losing its eligibility as is Van Buren in Crawford County.

Long said, local mortgage bankers he has visited with in recent days are holding several RD loan applications and hoping the shutdown is resolved soon. The bankers called by The City Wire on Monday, (Oct. 14) were off for Columbus Day. The government website for RD loans is also inactive and Long said bankers are not taking any new RD applications.


Nationally, the RD loan program is about 2% to 3% of the mortgages but it’s an important program for lower income families who have strong credit ratings, according to national housing advocates.

YEAR-TO-DATE
Bynum reports home sales through nine months of 2013 tallied more than $1 billion in Benton and Washington Counties, up 25% from the same period last year. Agents have sold 5,562 homes this year, with a median sales price of $150,000, across the two-county area.

In Benton County, sales are up 27% this year with total volume of $657.167 million. Agents sold 3,512 units, some 600 more this year compared to the same 9-month period of 2012. Median home prices have risen to $152,000 in Benton County this year, up 5.5% from the year-ago period.

Washington County reports 2,049 homes have been sold this year, an increase of 267 units of 15% from 2012. Total sales volume rose to $363.231 million, up 21.4% from the same 9-month period last year. Median home prices totaled $148,700 through the recent 9-month period, rising 7.8% from a year ago.

George Faucette, CEO of the local Coldwell Banker franchise, said recently his firm is on strong footing, without the aid of a government bailout thanks to healthy sales recovery in the past two to three years.

“Since 2010 our sales volume has increased by approximately 60%, based on our 2013 year-end projections,” Faucette said.

He adds that locally Coldwell Banker has grown its sales volume almost two times faster than the overall Northwest Arkansas market in the past two years, according to the Multiple Listing Service data.

When asked about the possibility of a pricing bubble, given the year-to-date increase in values and transactions, Faucette said it’s not an inflated situation.


“We have great demand because our job market is growing, but the price increases are relatively moderate. I do think the foreclosures are affecting the average sale price, if not the median, but that is being mitigated by the new construction that is selling well. The new construction is also keeping the market from swinging substantially back into a seller's market, which also tends to keep the bubble from happening,” Faucette said.