Northwest Arkansas home sales total more than $1.1 billion through July, up 24%

There have been 5,553 homes sold in Benton and Washington counties through the first seven months of this year, up 16.85% from a year ago, with the sales value over $1.172 billion, up 24.14% year-over-year. Sales surpassed the $1 billion mark one month ahead of last year’s then-record pace.

July was a particularly strong month with total sales of $200.491 million, up 13.43% from the same month last year. Agents sold 941 homes last month, which was 83 more than they sold a year ago, according to sales data provided by Eric Harris with Weichert Downum Realty Group in Springdale.

Benton County reported 581 homes sold during July with a cumulative value of $131.735 million. Unit sales rose 10.66% from the year-ago period. Sales volume is up 13.43% thanks to rapidly increasing prices. The median home price sold last month in Benton County was $188,800, up 7.88% from a year ago. The median price per square foot was $97.66 and the average price was $98.50, close to the median, an indication that prices are up in all across the board.

Sales were also strong in Washington County with 360 homes sold last month, compared to 333 a year ago. The values rose 6.5% to $68.756 million in July. Unlike Benton County, median home prices were $163,500, down from $168,539 in the same month last year.

Through the seven-months, prices in Washington County were $165,000, up 1.22% from the $163,000 reported a year ago. Benton County median home prices this year are up 7.14% to $180,800.

APPRAISAL ISSUES
Rapidly rising prices in Benton County and part of Washington County are presenting some challenges for agents, buyer and sellers, according to Jason Smith, an executive broker with Crye-Leike Real Estate in Fayetteville. Smith said there is a supply shortage among re-sale homes relative to demand which is fueling the higher prices. He said new construction is lagging demand.

“July has been crazy busy but the real dilemma is the supply shortage and some real resistance we are getting from appraisers. We have some deals fall through because the appraisal did not justify the price a buyer was willing to pay,” Smith said.

He completed three cash deals in the recent month and said there were no appraisals in those sales, but agents around Crye-Leike have reported appraisals hanging up deals in Benton and Washington counties.

“We don’t know exactly where this caution is coming from whether it’s lenders or what. We certainly don’t want to create another bubble, but rising prices is not necessarily a bad thing for our market,” Smith added. “I have multiple buyers looking through what is available and not finding what they want in a our limited supply.”

Charles Hudson Sr., an appraiser in the region, told Talk Business & Politics that appraisals are not meeting some buyer offers as often as in past years. He said this is a fairly common outcome in a market where prices are ascending amid high buyer demand.

“We have more multiple offers occurring now and in some cases buyers bidding up the prices to get the home they want, but that doesn’t mean that it’s in line with comparable sales in the neighborhood,” Hudson said. “Land values are also skyrocketing in some areas like downtown Bentonville or downtown Fayetteville where there is very limited supply.”

Hudson said some people are willing to pay more to be near downtown but there may be no comparable sale prices to support such sales from an appraisal standpoint.

“The same thing happened about 12 years ago. It took a while for appraisals to catch up with buyers willing to pay more,” Hudson said. “Back then it was the new construction market that fueled the higher prices because of the escalating land costs. This time it seems to be demand driven relative to the supply (new or resale).”

In Benton County median sales prices have risen 18.94% since 2014. In July the median home price of $180,800 was $28,800 more expensive than in July 2014. In Washington County the median sales price of $165,000 is 10% or  $15,000 more expensive than in July 2014.

NORTHWEST ARKANSAS HOME SALES (January through July)
• Benton County
Unit Sales
2016: 3,466
2015: 2,989
2014: 2,625
2013: 2,634

Sales Volume
2016: $758.859 million
2015: $604.687 million
2014: $500.528 million
2013: $491.521 million

Median Sales price
2016: $180,800
2015: $168,750
2014: $152,000
2013: $152,000

• Washington County
Unit Sales
2016: 2,087
2015: 1,763
2014: 1,528
2013: 1,573

Sales Volume
2016: $413.785 million
2015: $339.340 million
2014: $277.688 million
2013: $275.180 million

Median Sales price
2016: $165,000
2015: $163,000
2014: $150,000
2013: $148,500