Home sales in Northwest Arkansas, particularly Benton County, continue to climb into uncharted territory.
According to Eric Harris, an agent with Weichert, Realtors – Downum Group in Springdale who tracks the data, in the month of November, real estate agents sold 467 homes in Benton County, with a combined sales volume of $106.1 million. While that’s a jump of 59% compared with a volume of $66.65 million in November 2015, a three-year comparison of the data further underscores the surge in residential real estate activity. In November 2013, homes sales in Benton County totaled $52.5 million on 303 homes sold.
In Washington County, home sales totaled 255 last month for a sales volume of $51.3 million. That’s compared to 176 homes sold and sales volume of $31.9 million in November 2013.
“November housing sales remained strong,” Harris said. “There are plenty of buyers still out there with inventories shrinking. Now is a great time to list your home if you are looking to upgrade or downsize.”
Through the first 11 months of 2016, there were 8,933 home sales in Benton and Washington counties. That’s up 16.2% from 7,683 home sales in the first 11 months of 2015. The sales volume from January through November was a combined $1.91 billion in the two-county area. That’s up 33.5% from a sales volume of $1.43 billion through the first 11 months last year. In fact, the residential activity in the first 11 months of 2016 has easily surpassed totals from all of 2015. Agents sold 8,382 homes last year in the two-county area, with a combined volume of $1.57 billion.
To ask an obvious question: How long can the red-hot trend? Even veterans of the industry are stumped.
“A lot of us that have been around at least through the last [housing boom], are asking the same thing,” said Marcus Necessary, an executive broker with Weichert, Realtors – The Griffin Co. in Bentonville. “How long can this go on? Interest rates are going to go up, so we’ll see if that slows things down.”
Necessary noted that only two million-dollar homes contributed to Benton County’s November total of $106.1 million.
RATE HIKE REACTION
The eye-popping totals in the housing market can at least partially be traced to ultra-low interest rates, helping buyers with affordability. On Wednesday, however, the Federal Reserve announced, as was widely expected, a rate hike by a quarter of a percentage point to between 0.50% and 0.75%. The increase will potentially lead to slightly higher borrowing costs for consumers.
Richard Baker, a senior vice president and mortgage lending manager for Springdale-based United Bank, said he expects long-term mortgage and interest rates to increase. He reports that Freddie Mac’s 30-year fixed rate stands at 4.37%
“Before it’s said and done, this time next year, we figure to be pushing upper 4’s for a 30-year,” he said. “But even if you stay in the 4’s, those are still good rates. That’s still at some all-time lows.”
He said the rate hike may trigger some “knee jerk” reaction among borrowers in the short term, but from a lending perspective, the housing market in the two-county area is in a position of strength to absorb those increases.
John Curreri, who oversees the Arkansas mortgage market for Bank of Arkansas, said there was a slight “negative” impact to mortgage rates Wednesday after the Federal Reserve announcement.
“But as far as rates go, we still don’t think we are on a steady increase up,” he said. “It’s still going to trend up and down like an ocean. But right now, there’s just nowhere to go but up.
Curreri doesn’t think Wednesday’s rate hike – or further increases potentially coming in 2017 – will adversely affect the housing market in Northwest Arkansas.
“I think people will continue to expand, continue to buy and continue to build,” he said. “And look at it as a positive thing – the economy is doing good, we can afford to raise the interest rates.”
HOME SALES DATA (January through November)
• Benton County
2016: $1.24 billion
2015: $977.93 million
Median Sales Price
• Washington County
2016: $660.94 million
Median Sales Price