Home sales in Benton and Washington counties continue to set records through September. Topping the $1 billion mark, agents sold 4,620 homes in the Benton County through the first nine months of the year. It took agents all of 2015 to reach the historic $1 billion threshold, a feat they accomplished in just nine months of 2016.
The Benton County sales volume of $1.039 billion rose 26.5% from the $821.351 million in the year-ago period thanks to 576 more homes sold and a 10% increase in median home prices from a year ago. The active housing market in Benton County leads the state in 2016, including the more populated Pulaski County, according to data provided by Eric Harris, real estate agent for Downum Weichert Real Estate Group of Springdale.
A big reason sales volume has risen so quickly this year in Benton County is largely because of rising home prices. Median home prices in Benton County rose to $184,900 through September, 10% more expensive than the $168,000 reported a year ago.
At the same time the unemployment rate in Benton County during September was 2.7%, according the Federal Reserve Bank of St. Louis. A report from 24/7 Wall Street indicates local unemployment rates appear to be tied to home prices. The report found jobless rates fell in all but one of the 25 fastest growing markets for home prices. Likewise when jobless rates rise, home prices declined in the worst performing real estate markets.
While Benton County was not in the report, its metrics are comparable the top 25 reported. Local home price growth was in line with Destin/Fort Walton Beach, Fla., who at No. 25. also reported a 10% gain in median home prices, with a 4.1% employment rate. The top growth market in the report was Boulder, Colo., with median sales prices up 18.6%, and an unemployment rate of 3.1%.
The 24/7 report indicated median home prices in Destin/ Fort Walton Beach, Fla., were $255,200, which is 21% more expensive than Benton County. That said, Benton County’s median home price ($184,900) was higher than 10 of the top 25 performing real estate markets in the country according the report.
Kathy Deck, director of the Center for Business & Economic Research at the University of Arkansas, recently told Talk Business & Politics, that economically speaking Benton County is on par with some of the best areas in the country. While housing costs in Benton County have risen sharply over the past year, she said they remain a value when compared to prices in other top economic areas.
Rising home prices are deemed positive for homeowners, and can also stimulate the economy. Deck said there is a definite link between rising home prices and overall stronger consumer confidence given that the biggest asset most families own is their home. She said the one thing different about this post-recession price growth is homeowners aren’t using their homes as ATM machines – tapping out the equity like they did prior to 2008.
Perhaps that’s because lending practices are more stringent in light of federal Dodd Frank banking regulation. Arvest Bank, one of the largest mortgage lenders in the region, said it’s refinance activity in 2016 has been less than the new purchase loans they have made over the past couple of years. Arvest Mortgage recently reported that 64% of its mortgage loan origination values were for new purchases.
Washington County also is having a record year of its own, thanks in part to its growing economy and 2.6% unemployment rate in September. Agents sold 2,801 homes through September with a combined value of $576.011 million. Unit sales are up 19.8% while sales volume gains of 27.9% were pushed higher in part from rising home prices. Through September the median home price of $169,000 in Washington County increased 3.6% from a year ago, which said is a more sustainable growth pattern than in Benton County, Deck said.
She said the reason home prices in Benton County have grown faster is because the population is rising faster than the supply of new homes. With all the building going on in the region, Deck said price appreciation for residential and commercial rents could pause when the bulk of the new projects come online.
While homes sales are broken down by county, Northwest Arkansas is largely viewed a metro region. Northwest Arkansas home sales totaled $1.615 billion through September which is up 27% from the year-ago period and 2.86% higher than the annual record set in 2015. Prior to that the annual record for the two-county area was set in 2012 at $1.542 billion.
Agents sold 895 homes in Benton and Washington counties last month. The cumulative value was $190.814 million. Unit sales rose 20.78% from a year ago and sales volume increased 10.52%, according to data provided by Harris.
He said the offers keep coming in on properties in the region, particularly Benton County as interest rates remain low and the regional growth in terms of jobs and people continues to outpace many parts of the country.
Rising prices are a concern for families that might be looking to move to Northwest Arkansas. In September, for instance, the median price in Washington County rose to $99.27 per square foot flirting with the $100 threshold. This price is up 4.27% from a year ago and 9.56% higher than in 2014. In Benton County the square-foot price was $97.89, up 9% over $89.80 reported a year ago.
Despite the higher priced homes, sellers saw their listings go under contract in 72 days in Benton County, which was 13 less days than recorded in September of last year. At 75 days Washington County sellers sold in four less days than a year ago. Harris and other agents have recently told Talk Business & Politics that it’s not uncommon for well-priced homes to go under contract in one day. They also report more multiple offers which can tend drive prices up as well. Some agents recently said multiple offers had pushed the selling price above the appraisal values which have been slower to catch up.
HOME SALES DATA (January through September)
• Benton County
2016: $1.039 billion
2015: $821.351 million
Median Sales Price
Median price per square foot
• Washington County
2016: $576.011 million
2015: $450.216 million
Median Sales Price
Median price per square foot