Rising home costs helped contribute to a milestone last year in the Northwest Arkansas housing market.
Real estate agents combined to sell $2.208 billion worth of residential properties in 2017 in Benton and Washington counties, according to Multiple Listing Service (MLS) data provided by Eric Harris with Weichert, Realtors — The Griffin Co.
That’s the highest mark in the region’s history, up 15.4% from $1.91 billion in 2016. In terms of unit sales, Realtors combined for 9,843 home sales in the two-county area, up 7.6% from 9,146 home sales in 2016.
Broken down further, the data indicates there were approximately 27 homes sold every day in 2017, up slightly from 25 home sales per day in 2016.
Brandon Long is the broker/owner of Weichert, Realtors — The Griffin Co., which has offices in Bentonville, Springdale and Fayetteville. On Jan. 1, the firm also acquired a Weichert franchise in Fort Smith owned by Kevin King. Long said the market has shown steady growth for several years, so he is not surprised at the $2 billion milestone.
“I feel like 2018 is going to be more of the same,” he said. “Inventory is going to be lower than the demand.”
Long’s company tracks the region’s absorption rate closely from month to month. He said the current rate — how long, on average, inventory will sit on the market — in the two-county area is 2.85 months, that’s up slightly from 2.6 this past spring, which is a trend in the right direction.
“To me, I would rather be around four or 4.5 [months],” he said. “It’s healthier for both buyers and sellers. Any closer to two months and the sellers are going to have their way with buyers, and I don’t think that’s healthy.”
Benton County home sales topped the $1 billion mark for the third consecutive year in 2017, with a 12-month sales volume of $1.439 billion on 6,234 units. That compares with $1.184 billion in 2016 on 5,526 units, and $1.079 billion in 2015 on 5,312 units.
In Washington County, total sales volume rose 5.5% to $769.222 million, while unit sales were essentially flat — 3,620 in 2016 and 3,609 in 2017.
The rising value of home prices continues to push the market higher. Since the end of 2014, the median home price in Benton County has risen from $157,000 to $194,600. Median home prices in Washington County reached $178,000 last year, up from $150,000 in 2014.
The average sales price also rose last year, from $201,373 to $213,140 in Washington County, and from $214,215 to $230,904 in Benton County.
Mervin Jebaraj, an economist with the University of Arkansas and the director of the Center for Business and Economic Research, says the numbers don’t indicate many surprises in the region’s residential market.
“People are still moving here despite the higher prices, the concern is what we have talked about before throughout the course of 2017,” he said. “The big selling points in Northwest Arkansas are jobs and [quality of life] amenities and lower cost of living, and a big part of that is home prices. They still don’t compare to other regions and metros we like to compare ourselves to. They are getting a lot more expensive than what they were just a few years ago, and if unchecked it could eat into the advantage we have in terms of cost of living.”
The strong market performance in 2017 came even with a dip at the end. Residential activity in both Benton and Washington counties was down in December compared to the same month in 2016. Sales volume in the two-county area last month was a combined $168.116 million, down 4.1% from $175.457 million in the same month in 2016.
Unit sales also dropped, from 826 in 2016 to 765 in 2017, a difference of 7.3%.
Benton County had 516 home sales last month compared to 525 in 2016. In Washington County, home sales totaled 249, down from 301 in December 2016.