The greater Fort Smith real estate market is mirroring the pace set by the nation with reduced sales in October, but the year-to-date numbers show combined market gains for Crawford and Sebastian counties.
Real estate agents in the two counties sold 183 homes in October valued at more than $23.539 million. Unit sales were flat against the 181 recorded a year ago. However, the sales volume declined 19.25% from the $29.153 million reported in October 2014, according to data provided by the Weichert King Real Estate Group of Fort Smith.
Kevin King, broker with Weichert, said the softer volume is directly related to more lower priced homes selling during October. He said there continues to be significant investor activity in the Fort Smith market.
It was Sebastian County – which largely consists of Fort Smith – that reported the lower $95,500 median price in October. This was down substantially from the median price of $124,950 reported that year.
“With the threat of higher interest rates looming perhaps more first time buyers jumped down off the fence in October,” King said.
He said October was somewhat atypical for what his firm has seen this year. Seasonally the fall is typically a slower time, but King said his firm is having one of the best Decembers in the company’s history which indicates demand has not faded.
“We should be up about 22% this year based on gross commissions, which is based on sales volume. It’s been a very solid year for us,” King said.
For the first 10 months of this year agents have sold 1,709 homes in the two-county area with a combined value of $231.275 million, better than the 1,686 units worth$221.126 million a year ago. Unit sales inched up 1.4% and sales volume rose 4.58%.
King recently said a 4% to 5% annual growth rate in the Fort Smith metro real estate market is on track with predictions set in early 2015. He said a 5% growth rate in the local market is about as good as anyone could hope for.
METRO HOME SALES (January-October)
• Crawford County
2015: $60.141 million
2014: $62.334 million
Median Sales Price
• Sebastian County
2015: $171.134 million
2014: $158,792 million
Median Sales Price
Lawrence Yun, chief economist with the National Association of Realtors, said the cooling off in October was seen in many markets across the country and was likely related to the pullback in contract signings of the past couple of months. Like the Fort Smith metro area, Yun said despite the 3.9% pullback in October sales, the nation is roughly 3.9% ahead of the sales at the same time last year.
Yun said limited supplies in new and existing homes has also been a looming problem this fall.
“Furthermore, the mixed signals of slowing economic growth and volatility in the financial markets slightly tempered demand and contributed to the decreasing pace of sales,” he added.
Yun said as long as job creation continues and there is a gradual easing of credit standards even with moderately higher mortgage rates there should be support for steady buyer demand to continue above last year’s levels. He forecasts existing-home sales to finish 2015 at a pace of 5.3 million – the highest since 2006.
He said although further expansion in existing-sales is expected next year, ongoing inventory shortages and affordability pressures from rising prices and mortgage rates will likely temper sales growth to around 3% (5.45 million) in 2016. Home prices nationwide are expected to slightly moderate from a 6% increase in 2015 to 5% next year.