Arkansas’ Large Market Home Sales Up Almost 13% In 2013

The number of homes sold in Arkansas’ four largest metro areas totaled 20,644 during 2013, the first time since 2007 that the tally topped 20,000 and the first time the value of the homes sold in the four markets topped $3 billion.

Also, December home sales in the four markets totaled 1,535, the first time since the bullish days of 2006 that the December total was above 1,500. Home sales during 2007 in the four markets totaled 22,007, with the value reaching $3.563 billion.

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. This report counts the number of sales closed between January and December.

During 2013 the number of homes sold in the four markets totaled 20,644, up 12.93% compared to the 2012 period and up 15.56% compared to 2011, according to The City Wire’s Arkansas Home Sales Report. The report is sponsored by Fort Smith-based Weather Barr.

The value of homes sold in the four markets during 2013 was $3.439 billion, up 15.13% compared to the same period in 2012 and up more than 28% compared to the same period in 2011.

The average price of homes sold during 2013 in the four markets was $166,598, up 1.95% compared to the same period in 2012 and up 10.84% compared to the same period in 2011.

The average days on market during 2013 is 86.89, better than the 95.85 in 2012 and the 103.51 in 2011.

During 2013, the number of homes sold in central Arkansas are up 10.44%, up 12.89% in the Jonesboro area, up 17.98% in Northwest Arkansas, and up 7.36% in the Fort Smith area.

Benton County was the top Arkansas county for home sales during the year. The county, with a population of around 230,000, had 4,571 home sales in 2013. Pulaski County, the state’s largest with a population of around 390,000, posted 4,499 home sales during the year.

DECEMBER ACTIVITY
Combined home sales activity was up in all four markets during December, but the combined average price was down in all four markets. The average price per home in the four markets was $164,600, down 2.32% compared to December 2012. The average price was up 3.95% compared to December 2011.

There were 739 homes sold in central Arkansas, up 25.47% compared to December 2012, and up 13.87% compared to December 2011.

December home sales totaled 537 in Northwest Arkansas, up 20.13% compared to December 2012, and up 28.16% compared to December 2011.

Jonesboro area home sales totaled 121, up 2.54% compared to December 2012 and down 3.97% compared to December 2011.

In the Fort Smith area, home sales totaled 138, up 12.2% compared to December 2012, and up 8.66% compared to December 2011.

The value of the sales during December were up 17.4% in central Arkansas, up 22.5% in Northwest Arkansas, up 0.11% in the Jonesboro area, and up 9.77% in the Fort Smith region.

THE REGIONAL PICTURE: 2013
Central Arkansas — Home sales
2013: 9,709
2012: 8,791
2011: 8,553

Fort Smith area — Home sales
2013: 1,735
2012: 1,616
2011: 1,700

Jonesboro area — Home sales
2013: 1,970
2012: 1,745
2011: 1,755

Northwest Arkansas — Home sales
2013: 7,230
2012: 6,128
2011: 5,856

The top five counties in terms of 2013 home sales:
Benton — 4,571, up compared to 3,853 in 2012
Pulaski — 4,499, up compared to 4,151 in 2012
Washington — 2,659, up compared to 2,275 in 2012
Saline — 1,570, up compared to 1,384 in 2012
Craighead — 1,561, up compared to 1,355 in 2012

MARKET IMPACTS
Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas, said 2013 is further evidence that real estate markets are continuing to recover.

“I think it’s clear. If we look at the whole year, 2013’s average sales price was as high as it has been in the state,” she said.

Deck said the number of homes sold in 2013 might not equal the peak years of 2005 through 2007, but the areas covered in The Arkansas Home Sales Report have returned to pre-recession levels. When higher sales numbers are combined with the highest average sales price in Arkansas, “it’s hard to come up with a word other than recovery,” Deck said.

Deck said she expects sales to improve in 2014 – further evidence that the overall economy is improving. She said the nation is still slogging through a long recovery that has been fueled with a change in attitudes as much as anything else.

“Businesses and consumers have learned to deal with conditions as they are,” she said. “Some consumers – some businesses – are thriving even in economic times that aren’t ideal.”

In that context, then, it’s difficult to view real estate markets in Arkansas or the nation as one unit. Deck said real estate markets are tied to local areas, meaning sales are strong in some areas and not others. Deck said the economy in Jonesboro, for example, continued to expand even through the recession and the result has been a consistently solid real estate market at times when other parts of the state and nation were watching both sales and home values drop at alarming rates.

Arkansas Realtors Association President Bill Ladd, an agent with Moore & Co. Realtors in Russellville (tmoorerealtors.com), agreed with Deck that the old adage is true – real estate is local. He said the largest markets in Arkansas – primarily those covered in The Arkansas Home Sales Report – fared very well in 2013. In more rural areas of Arkansas, however, growth has come more slowly to markets.

REAL ESTATE HEADWINDS
Still, Ladd expects markets to improve throughout the state in 2014. He predicts the first quarter will be “soft and sluggish” due in large part to the Patient Protection and Affordable Care Act (Obamacare). Ladd said Realtors will watch the full impact of the Affordable Care Act. If early reports of increasing premiums prove to be common, that could have a negative impact on a housing market recovery as fewer people may qualify to purchase homes. By the time the spring rolls around, Ladd predicts markets will continue to expand as they grow accustomed to the Affordable Care Act and conditions should expand throughout the rest of the year.

Ladd and Deck agree that 2014 should be another year of moderate improvement in housing markets around the state. Deck said there are some headwinds facing the market such as increasing mortgage rates, but markets should come out ahead in spite of those.

Ladd believes what will improve the overall economy – and housing markets on the whole – is a falling unemployment rate. Real estate markets are sensitive to job growth and it remains to be seen if a substantial number of jobs are created in the Natural State this year.

Arkansas began the year with 1.247 million employed in January, with the number falling 1.74% to 1.226 million by November, according to the U.S. Bureau of Labor Statistics. The employment level in November was down more than 5.6% compared to a high of 1.299 million in March 2008.