Active new home market pushes up Northwest Arkansas real estate price

Rising prices and a more than 9% gain in home sales is the emerging early trend in Benton and Washington counties.

Agents sold 928 homes in the first two months of this year with roughly 19% of those being new construction. Total sales volume rose 21% to $176.617 million, according to MountData.com.

The 2015 start is compared to 850 sales in the year-ago period with 13.5% of those being new construction. Median home prices rose to $89 per square foot at the end of February. The median sales price of $160,000 was up 15% from a year ago.

George Faucette, CEO of the local Coldwell Banker franchise, said his firm has seen flat unit sales for the two-month period relative to a year ago.

“However, for February alone our units are up 6%, and average sales price is up 24%. I attribute much of that to more new homes on the market and being sold – and being sold at a generally higher price than existing homes,” Faucette said.

He expects the overall market will continue to experience greater activity through the spring and summer and probably all year, being led by new home sales at this time.

“The national housing markets are bolstered by excellent economic numbers in employment, including lower numbers of those applying for unemployment, consumer confidence, manufacturing, lower government deficits,  and of course, higher prices in homes and more homes being sold. I certainly expect our region to outperform the nation in all of those metrics,” Faucette added.

Jerry Dou, an agent/broker with Keller Williams in Bentonville, said higher new construction prices also lead to rising re-sale prices and both are happening across much of the region.

“We’re getting to a time of multiple offers again so sales price to list price ratios are getting much tighter. It’s definitely a great time to sell while the demand is up,” Dou said.

FIRST-TIME BUYERS
Dou expects 2015 to be a strong year based on ample demand from first-time buyers who’ve been sitting on the fence.

“Rates are great, FHA 3% minimum down payment is making a comeback, and rental prices are increasing,” Dou added.

Jim Long, an agent with Crye-Leike Real Estate, said he’s working with two first-time buyers who are relocating to the area. One is a couple coming out of the military looking to settle in the region with their family.

The other is a Millennial – a generational category of those born between the early 1980s and the early 2000s – who is moving to Northwest Arkansas from Little Rock to take a new job. Long said this buyer is tired of renting and is using the federal Rural Development program for 100% financing. 

“He’s looking in the outskirts of the major towns because that’s the only place (rural development) is available, but it’s still a great way for first-time buyers to take the plunge,” Long said.

With rents rising faster than incomes, many Millennials are expected to start looking to buy homes of their own, according to Mark Zandi, chief economist for Moody's Analytics. A spike in the number of first-time home buyers should spark a chain reaction by enabling existing homeowners to sell their homes and buy more expensive ones, he said. 

HOME SALES DATA (January-February)
Benton County
Unit Sales 
2015: 549
2014: 549
2013: 490

Sales Volume
2015: $103.194 million
2014: $92.702 million
2013: $82.648 million

Median Sales Price
2015: $159,950
2014: $133,153
2013: $138,800

Washington County
Unit Sales 
2015: 379
2014: 301
2013: 351

Sales Volume
2015: $73.422 million
2014: $53.803 million
2013: $56.156 million

Median Sales Price
2015: $160,000
2014: $150,000
2013: $139,950