Foreclosure filings rise in Arkansas’ three largest metro markets

Much of the nation saw the number of foreclosure filings dwindle through the first half of the year, but several Arkansas metro areas posted increases, according to recent data from ATTOM Data Solutions, the parent company of Irvine, Calif.,-based RealtyTrac.

In the first six months of this year there were 533,813 foreclosure filings across the country, down 11% from the same period last year and 20% fewer than reported in the back half of 2015. Counter to the national trend, 19 states posted year-over-year increases in foreclosure activity through June. Arkansas was not among the 19 states, but three of the state’s largest metro areas saw foreclosure filings rise from a year ago.

There were 2,489 new foreclosure filings among Arkansas homeowners in the first half of the year, or one in every 534 households. Arkansas filings were down 14.7% from the back half of 2015 and 7.33% lower than a year ago.

Arkansas ranks 35th in terms of the most foreclosures in the first half of 2016. The Natural State had fewer foreclosures than all of its neighboring states, except Mississippi which ranked 39th of 50 states. That said the Little Rock, Northwest Arkansas and Fort Smith metro areas, the largest populated areas of the state reported more foreclosures year-over-year.

Little Rock’s metro area had 1,190 new filings through June, which was one in every 263 households. Filings were down 9.98% from the previous six months but 1.71% more than the exact year-ago period. Northwest Arkansas, the second largest populated region in the state had 282 new filings through June, which equated to one in every 714 households. Filings tapered from the 43.15% increase in the last half of 2015 down to a 30.88% increase in the first half of this year.

The Fort Smith area reported 195 foreclosure filings through June. In this metro area foreclosures were trending down in the back of 2015 (-11.36%), but in the first six months of 2016 filings increased 12.95%, the largest swing of any of the metro areas mentioned in this report.

Jonesboro, the smaller market of the four, reported 68 new filings this year through June, down 1.45% from the same period last year. This filings were up 3.3% from those reported in the second half of 2015.

“Although there are some local outliers, the downward foreclosure trend continued in the first half of 2016 in most markets nationwide,” said Daren Blomquist, senior vice president at RealtyTrac. “While U.S. foreclosure activity is still above its pre-recession levels, many of the states hit hardest by the housing crisis have now dropped below pre-recession foreclosure activity levels. With some exceptions, states with foreclosure activity continuing to run above pre-recession levels tend to be those with protracted foreclosure timelines still working through legacy distress from the last housing bust.”

INVESTOR PURCHASES
An important element at play in several Arkansas markets are the number of third-party investors actively buying foreclosures at auction. RealtyTrac said the share of investor purchases reached a 17-year high this year.

Based on separate sales deed data also collected by RealtyTrac, 27% of all properties sold at foreclosure auction were purchased by third-party investors, the highest share for the first six months of any year since 2000 – the earliest national data available. The investor share of purchases at foreclosure auction reached 20% or higher in only two previous years, 2005 (20%) and 2015 (22%). The investor share of purchases at foreclosure auction dropped to a 17-year low of 11% in 2008 in light of the recession.

States with the highest share of institutional investors in the second quarter of  2016 were Alabama (6.7%), Georgia (5.9%), Arkansas (4.1%), Louisiana (4%), and New Mexico (4%). The number of investor deals has nearly doubled from 2.5% of the sales reported in Arkansas a year ago.

CASH DEALS
The number of cash deals across Arkansas decreased in the second quarter to 29.2%, from 34.5% in the first quarter and 31.5% in the year-ago quarter. One in four home sales or 25% of those in Northwest Arkansas in the second quarter of were cash deals, according to the ATTOM/RealtyTrac report. Cash deals in the metro area are down slightly from about 30% a year ago.

Cash deals accounted for 29% of the home sales in the Little Rock metro in the second quarter, down slightly from 31% a year ago. The Fort Smith and Jonesboro metros were not included in the data as it was limited to MSA’s with more than 1,000 home sales in the quarter.

Cash deals nationwide comprised 27% of the total sales in the second quarter, down slightly from 30.4% a year ago.

PEAK PRICES
With foreclosures and distressed home sales still a fraction of their peak highs around 2008, home prices have continued to increase over the past several years, with many markets now reseting new peak prices previously set during the pre-recession housing boom.

ATTOM/RealtyTrac reports that 30 U.S. metro areas reached new all-time price peaks in June. The single family median home price reached $213,000 in June, up 9% from a year ago and a new all-time high, which is 1% above the previous peak of $228,000 set in July 2005. Since the nation’s home prices bottomed out in 2012, a total of 63 of the 130 markets analyzed (48%) have reached new all-time home price peaks.

“The all-time home price highs nationwide and in many local markets are being enabled by historically low mortgage rates — which are falling once again this year,” Blomquist said. “It is likely that some of the most interest rate sensitive local markets will see home price appreciation knocked down when the low rate rug is finally pulled out from under the housing recovery. We are seeing signs of weakening appreciation in many bellwether markets already in spite of the rock-bottom rates.”

Arkansas’ median home price rose to $150,000 in June, up 3% from a year ago. The metro peak prices around the state include Northwest Arkansas at $162,500 which was set in May 2016. The median sales price in Northwest Arkansas dipped slightly in June to $159,150. Local home prices in this market are up 3% from a year ago, according to the report.

The larger Little Rock metro area set its current price peak at $152,000 in June 2013. The median price as of June rose to $147,000 closer toward the peak. Prices are up 1% year-over-year in this market.

Fort Smith and Jonesboro were not included in this report which was limited to markets with at least 300 home sales in June.