The local housing market is as hot as it’s ever been with sales in Benton County alone expected to top $1 billion before the end of the year, according to Paul Bynum, economist and founder of MountData.com.
Agents across Benton and Washington counties sold 741 homes in September, cumulatively valued at $146.914 million, up compared to 633 homes worth $119.793 million, a year ago. Unit sales are up 17% and volume in September was 22% higher than the same month last year, according to MountData.com.
Agents in the two counties sold 6,382 homes which were worth more than $1.271 billion in the first nine months of 2015. Record volume for the local region was set in 2005 at $1.542 billion, according to Bynum.
Year-to-date homes sales in the two counties rose 20% from the $1.052 billion reported in 2014. Unit sales increased to 6,382, a gain of 14.78%, or 822 more homes than was sold last year.
Bynum said Benton County is already having a record year with $821.351 million in sales through September, which is higher than the $775.916 million the county reported in same period of 2005. Bob Downum, broker with Downum Weichert Real Estate in Springdale, said his firm’s sales are up 20% this year, which is a record for them.
“My agents are all busy and have been. Back in the summer they were so busy we had to eliminate our Tuesday meetings so they could field calls and show homes. For our firm, we are having a record year,” Downum said.
He said the only hitches his agents have had in recent months has been it taking longer for qualify first-time buyers who are utilizing 3% down payments. He said the tighter loan to value ratios required under Dodd Frank banking rules have made it more difficult for buyers on the low end of the credit spectrum.
“We have seen a few people turned down two or three weeks into the process, something we never used to see,” Downum added.
Nicky Dou, broker with Keller Williams in Bentonville, agreed. She was the region’s top producing agent in 2014. Dou said her sales to date are $10 million over her record-breaking level of 2014.
“I am at $39 million in sales so far this year. My entire team, which includes three other agents, have already logged pending and closed business of $56.857 million. It’s been an amazing year,” Dou said.
Bynum said one of the bigger challenges to the local market growth continuing at its pace is likely the inventory constraints. The inventory totaled just 2,777 homes in September, that was 100 less homes than in August and 100 less than in July. Bynum said 363 of those homes in the September inventory were new construction.
While he said some of the decline is seasonal, the inventory in the local market is not keeping pace with demand.
“You can’t force a person to sell their home. Just because they can sell, doesn’t mean everyone will want to,” Bynum said.
He said the historically low inventory numbers relative to ample buyer demand are helping to hoist prices. Average homes prices hit a new high at $205,590 in Benton County for August. The Washington County price rallied to a new high back in July at $202,605.
Median prices, which reflect the middle of the market, also sit near their all-time highs at $168,000 in Benton County and $163,100 in Washington County. Kathy Deck, director for the Center for Business and Economic Research at the University of Arkansas, recently told The City Wire that prices have fully rebounded from their low point they hit in 2010 and 2011.
Bynum said the market could address its inventory shortfalls through more new construction, given the local demand. But builders and bankers still remember what happened when new building ran out of control just a few years ago. He said builders reported 930 sales through Sept. 30, in Benton and Washington counties.
“While we do see a fair amount of new construction today … it’s in balance with the population growth and demand for new housing. The local residential real estate market is very strong right now, favoring homeowners. I would give it an ‘A’ rating,” Deck said.
Home Sales (January through September)
• Benton County
2015: $821.351 million
2014: $689.671 million
Median Sales Price
• Washington County
2015: $450.216 million
2014: $363.247 million
Median Sales Price