The Arkansas real estate sector is set to finish two consecutive years of impressive gains in terms of home sales and sales values – barring a big drop in November and December home sales.
Home sales in Arkansas’ four largest markets are up more than 9% during the first 10 months of the year. October home sales were up more than 5%, and up almost 16% compared to October 2013. The year-to-date pace in Arkansas is driven by an almost 15% gain in Northwest Arkansas home sales and a more than 7% gain in central Arkansas.
The Arkansas Home Sales Report captures home sales data in the state’s 14 most populated counties within its four largest metro areas – Central Arkansas, the 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.
In the January-October period, home sales were up 7.74% in central Arkansas, up 1.36% in the Fort Smith metro, up 4.1% in the Jonesboro metro and up 14.7% in Northwest Arkansas.
The gain in home sales has not come at the expense of prices. In the January-October period, the average sales price in the four markets was $173,185, up 4.56% compared to the same period in 2014 and up 3.73% compared to the same period in 2013. The Fort Smith metro market is the only market among the four to see a decline during October in the average home sales price and total market sales.
COMPARING TO SOLID 2014 NUMBERS
Michael Pakko, chief economist and state economic forecaster for the Institute of Economic Advancement for the University of Arkansas at Little Rock, noted that sales in October were up about 5.5% compared to the same month a year ago. That might not seem like a major gain, but he said the October sales being up 16% compared to the same time in 2013 shows that the strong sales are now being compared to other months in which the housing market was gaining in strength.
Pakko, who predicted the 2015 market could see a 10% gain, said October’s report is a good indication of continuing strength in the housing market and more evidence that 2015 should close out as a great year for homes sales.
Pakko said one thing to keep an eye on, however, is the virtual certainty that the Federal Reserve will raise interest rates very soon. The Fed has not raised interest rates since June 2006.
With the Federal Reserve raising the interest rate for the first time in nine years, Pakko expects to see mortgage rates creep up slowly and may initially boost home buying activity as people rush to purchase before rates increase.
Eventually, he said he expects mortgage rates to increase to more normal levels of around 6%. The 30-year mortgage rates now hover around the 4.1% to 4.5%.
OCTOBER MARKET ACTIVITY
October home sales in the four markets totaled 2,030, up 5.35% compared to October 2014, and up 15.8% compared to October 2013. January was the only month with a decline (down 2.55%) in 2015. The October report follows a more than 10% gain in September.
The average price per home in the four markets during October was $170,198, down 0.51% compared to October 2014, and up 7.34% compared to October 2013. The total value of sales in the four markets during October was $345.502 million, up 4.8% compared to October 2014 and up 24.3% compared to October 2013.
There were 924 homes sold in central Arkansas, up 6.45% compared to October 2014, and up 15.07% compared to October 2013. The value of home sales was $151.61 million, up 4.29% compared to October 2014.
October home sales totaled 726 in Northwest Arkansas, up 5.37% compared to October 2014, and up 22.43% compared to October 2013. The value of home sales was $141.571 million, up 2.39% compared to October 2014.
Jonesboro area home sales totaled 197, down 4.23% compared to October 2014 and down 3.9% compared to October 2013. The value of home sales was $28.78 million, up 12.11% compared to October 2014.
In the Fort Smith area, home sales totaled 183, up 1.1% compared to October 2014, and up 20.39% compared to October 2013. The value of home sales was $23.539 million, down 19.26% compared to October 2014.
THE REGIONAL PICTURE: January-October 2015
Central Arkansas — Home sales
Jan.-October 2015: 9,311
Jan.-October 2014: 8,642
Jan.-October 2013: 8,358
Fort Smith area — Home sales
Jan.-October 2015: 1,709
Jan.-October 2014: 1,686
Jan.-October 2013: 1,477
Jonesboro area — Home sales
Jan.-October 2015: 1,987
Jan.-October 2014: 1,909
Jan.-October 2013: 1,687
Northwest Arkansas — Home sales
Jan.-October 2015: 7,108
Jan.-October 2014: 6,197
Jan.-October 2013: 6,251
The top five counties in terms of January-October 2015 home sales:
Benton — 4,483, up compared to 3,950 in January-October 2014
Pulaski — 4,267, up compared to 3,985 in January-October 2014
Washington — 2,625, up compared to 2,247 in January-October 2014
Craighead — 1,629, up compared to 1,511 in January-October 2014
Saline — 1,583, up compared to 1,433 in January-October 2014
Link here for a PDF document of the October 2015 data.
THE 2014 PICTURE
There were 21,447 homes sold in Arkansas’ four largest markets in 2014, up 3.8% over 2013 and up 17.33% over 2012. The total value of homes sold in the four markets during 2014 was $3.554 billion, up 3.24% over 2013 and up 18.97% compared to 2012.
Gains in the number of homes sold in 2014 certainly varied by market. Sales totaled 9,904 in central Arkansas, up 2.32%. In the Fort Smith region, which has an economy not yet on stable footing, home sales were up a surprising 14.33% for the year.