Northwest Arkansas real estate agents are having a banner year with the majority of homes selling within the first month of listing, but the sales pace in October was mixed with a dip in Benton County sales and 15.7% gain in Washington County.
Agents in the two counties sold 726 homes in October for a combined value of $141.57 million, better than the 689 sales worth more than $138.26 million in the same month last year.
Benton County sales totaled 439 in October, just below the 441 in October 2014. But agents were active in Washington County with 248 closed sales, 39 more than a year ago. October sales volume rose 13.2% to $52.982 million for the smaller Washington County, according to data provided by Stephen Brooks, an agent with Keller Williams Real Estate in Fayetteville.
Through the first ten months of 2015 local agents have sold 7,108 homes worth more than $1.413 billion, according to MountData. Regional home sales are up 14.7% in units sold with the sales volume rising 20% year-over-year.
New homes account for roughly 10% of that total, which has been the case for several years, according to MountData.com.
INTEREST RATE PUSH
Brooks said his own listings are selling within a two-week window which is fast given the median days on market was roughly 110 days across the region in October.
“This last couple months has been a great time in my business and we are helping people achieve their goals. I would just suggest more than ever that having a diligent agent as the best way to ensure sellers a solid strategy to close on time. I see a huge difference between various lenders so I always help my clients make a choices that works best in their favor,” Brooks said.
With the Federal Reserve considering an interest rate hike before the end of 2015, there is some apprehension with potential buyers which likely helped fuel some of the recent demand seen in the region and country. September existing homes sales nationwide rebounded to their second highest pace since 2007.
Agents say buyer demand is helping to push prices higher as 2015 comes to a close. In October the median sales price rose to $163,500 compared to $155,000 in Benton County a year ago, and $150,000 in Washington County that same month. On a square-foot basis the price rose 6% to $91 in Benton County. In Washington County the median price per square foot in October was $95, up 8.3% from the same month in 2014. Over the past two years the median sale price has risen 9% in Benton County, and climbing 10.1% in Washington County.
Kathy Deck, director for the Center for Business and Economic Research at the University of Arkansas, recently said home prices have returned from recession lows and there is more room for prices to rise in light of the region’s growing population, low unemployment rate and growing jobs agenda.
HOME SALES DETAILS
Irvine.,Calif.-based RealtyTrac reports that 9.5% of the homes sold in Benton County in October were bank-owned properties. Another 14 sales were deemed “short sales” which was roughly half the number reported in the same month of 2014.
RealtyTrac also reports that 15% of the sales closed in Benton County in October had financing backed by Federal Housing Authority (FHA). This was up from 11.2% in the same month last year. For the full Northwest Arkansas metro area the FHA loans were 15.5% of the total, up from roughly 11% last year.
Roughly one in three local homes sold in October were cash deals, according to RealtyTrac. Cash deals have been consistent at 30% for the past few years. Cash deals often signal investor activity but the percentage of institutional investor purchases were just 2.5% in October across the local metro area, down compared to 5.2% in the same month last year.
HOME SALES (January-October)
2015: $909.940 million
2014: $771.077 million
Median Sales Price
2015: $503.198 million
2014: $405.845 million
Median Sales Price
Lawrence Yun, chief economist for the National Realtors Association, said pending home sales have plateaued this fall as buyers struggle to overcome a scant number of available homes for sale and prices that are rising too fast in some markets.
“Contract signings in October made the most strides in the Northeast, which hasn’t seen much of the drastic price appreciation and supply constraints that are occurring in other parts of the country,” he said. “In the most competitive metro areas – particularly those in the South and West – affordability concerns remain heightened as low inventory continues to drive up prices.”
Yun recently said demand is expected to remain stable through the final two months of the year, and he forecasts existing home sales to finish 2015 at a pace of 5.30 million – the highest since 2006.
He said although further expansion in existing sales is expected next year, 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 are expected to slightly moderate from a 6% increase in 2015 to 5% next year.