February home sales up 7.3% in Arkansas despite winter weather
Two months is not a trend, but home sales in Arkansas’ four largest metro areas are up almost 7% for the first two months of 2014 and were up 7.3% during February. The number of homes sold in all of 2013 was up 12.93% compared to 2012.
However, the average sales price in the four markets was down 1.88% in February and is down 3.51% for the first two months of the year.
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.
The report, which counts the number of sales closed in February, is sponsored by Fort Smith-based Weather Barr.
February home sales totaled 1,350, up 7.31% in the four markets. The average price per home in the four markets was $156,897, down 1.88% compared to February 2013, but up 3.43% compared to February 2012.
There were 633 homes sold in central Arkansas, up 10.47% compared to February 2013, and up 10.66% compared to February 2012.
February home sales totaled 446 in Northwest Arkansas, down just 0.45% compared to February 2013, and up 18.62% compared to February 2012.
Jonesboro area home sales totaled 158, up 28.46% compared to February 2013 and up 18.8% compared to February 2012.
In the Fort Smith area, home sales totaled 113, down a slight 0.55% compared to February 2013, and down 19.8% compared to February 2012.
The value of the sales during February were up 1.45% in central Arkansas, up 7.4% in Northwest Arkansas, down 26.83% in the Jonesboro area, and down 1.43% in the Fort Smith region.
THE REGIONAL PICTURE
Central Arkansas — Home sales
Jan.-Feb. 2014: 1,217
Jan.-Feb. 2013: 1,142
Jan.-Feb. 2012: 1,032
Fort Smith area — Home sales
Jan.-Feb. 2014: 225
Jan.-Feb. 2013: 193
Jan.-Feb. 2012: 203
Jonesboro area — Home sales
Jan.-Feb. 2014: 280
Jan.-Feb. 2013: 224
Jan.-Feb. 2012: 216
Northwest Arkansas — Home sales
Jan.-Feb. 2014: 844
Jan.-Feb. 2013: 840
Jan.-Feb. 2012: 717
The top five counties in terms of Jan.-Feb. 2014 home sales:
Benton — 545, up compared to 489 in 2013
Pulaski — 536, up compared to 523 in 2013
Washington — 299, down compared to 351 in 2013
Craighead — 224, up compared to 174 in 2013
Saline — 212, up compared to 172 in 2013
Link here for a PDF document of the February 2014 data.
RENTAL PROPERTY PUSH?
Bob Miller and Jessica Plouch of Crye-Leike Reatlors in Benton said they’ve experienced an increase in call volume from perspective buyers, which is a trend they said began last year and has held since. Average prices in the area did fall a bit in the first two months of the year, but Plouch said it’s hard to pinpoint what could have caused that drop.
“I don’t think that’s necessarily a trend,” she said. “That just happens from time to time.”
Miller speculated that falling average prices could have something to do with a noticeable increase in interest from investors who are looking to purchase mid- to low-range homes and turn them into rental properties. It is no secret that credit standards have become tighter over the past few years and that has led to an increase in the demand for rental homes.
Miller said one thing that is still driving sales in Saline County – and markets around the state – is the U.S. Department of Agriculture’s Rural Development program has been popular as it is one of the few vehicles available for people wanting “zero down” mortgages. That program isn’t available everywhere – in Saline County, for example, every area is eligible for the program except the city of Benton.
The popularity of Rural Development could have an impact on the average price of homes selling in area. While there are a number of variables involved, the rule of thumb in central Arkansas is that a family of four applying for a loan under the program must have an adjusted gross income of $74,950 a year or less. That being the case, Rural Development is a viable option for families that can carry a mortgage on a low to mid-priced home, but not higher priced ones.
POSSIBLE WINTER IMPACT
The City Wire Economist Jeff Collins said it is difficult to pick up on any trends from looking at numbers for the first two months of the year for a couple of reasons. First of all, he said sales numbers may vary significantly from month to month, but those variances often level out over the course of a year. Picking up on trends from a couple of months’ worth of data, then, is inadvisable but economists are in a better position to discuss those trends when they have are armed with data from the first one or two quarters of the year.
Collins also said the Arkansas winter was considerably more harsh than normal. That means prospective buyers aren’t likely to go out looking at homes when there is ice or snow on the ground or if winter precipitation is in the forecast.
Still, Collins said there are reasons to be optimistic about sales growth in 2014. For one thing, 2013 was an improvement over 2012 and there is no evidence to suggest that shouldn’t continue. Also, positive growth is still the norm in Arkansas and that is particularly true in Northwest Arkansas. The Northwest Arkansas Council, last month, projected the area will grow from the February population estimate of 496,000 to 500,000 by this summer.
Collins said jobs growth and population growth in northwest Arkansas are higher than other areas of the state – statistics that translate into improved home sales in the area.