The residential housing market in Northwest Arkansas started with a strong showing in 2018.
According to the latest figures, real estate agents in Benton and Washington counties finished the first month of 2018 by combining to sell 567 homes in the area, with a sales volume of $128.18 million. That’s up 5.1% from 539 home sales ($117.09 million) in the two-county region in January 2017.
The data is from the Northwest Arkansas Board of Realtors and provided by Eric Harris, agent with Springdale-based Weichert, Realtors-The Griffin Co.
Benton County reported 349 home sales with a sales volume of $81.53 million. That compares to 334 home sales and $73.21 million in the year-ago period. In Washington County, agents sold 218 homes in January — up from 205 last year — with a cumulative value of $46.65 million, up from $43.88 million.
Jan Holland, a licensed Realtor working for Coldwell Banker Harris McHaney Faucette in Bentonville, said there hasn’t been the usual winter slowdown historically associated with the real estate market.
“I think it has been by far the busiest start to the year I can remember in 15 years,” she said.
Home prices are still escalating in Benton County, according to the data. The average single-family home price in Benton County last month was $233,632, up 6.5% from $185,200 in January 2017. The average home price last month in Washington County, however, was $213,995. That’s down slightly from $214,072 in January 2017.
Median home prices in Washington County — the middle price of the market — shot up 7% in January. Half the homes sold for $186,750, and half sold for less. Benton County’s median sales price last month was $187,500, up 1.2% from $185,200 in the year-ago period.
Strong sales in January continue the momentum of an historic year in Northwest Arkansas. The residential real estate market topped the $2 billion mark in sales volume last year in Benton and Washington counties. 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.
“The market has picked up right where it left off in 2017,” said Brandon Long, principal broker and co-owner of Weichert, Realtors-The Griffin Co. “It is brisk, and those properties priced right are selling quickly. Our absorption rate for Washington and Benton counties is at a 2.7-month supply, and our list/sales price ratio is at 98%.”
Long cautioned a lack of inventory, thus the low absorption rate, is a concern. If the absorption rate keeps dropping, home prices will keep rising.
“Currently, Bentonville is in sort of a self-correction mode, at an absorption rate of 3.75 months,” he said. “Bentonville has the highest, and I believe the healthiest, absorption rate among Northwest Arkansas’ largest cities.” The absorption rate in Fayetteville, he said, is less than 2 months.
Long added if interest rates trend upward, that could slow down buyers somewhat, and hopefully allow more inventory to enter the market. The interest rate this week for a 30-year fixed rate mortgage in Arkansas is 4.33%, according to Bankrate.com. The 15-year rate stood at 3.77%.
Holland said the low inventory in the market is leading to “multiple offer” situations happening already.
“I am encouraging my sellers who were planning to wait to list closer to spring, to go ahead and list and take advantage of the active buyers looking now, with less competition to deal with,” she said. “It seems to be working as most all of my listings are seeing good activity already.”
Holland said she expects to see a more balanced housing market in 2018, with more inventory being available at a wider variety of price points.
“It won’t be the crazy market of the past few years with low inventory, and the seller’s market we have experienced,” she said. “I think buyers will finally have more choices and opportunities than they’ve had over the past few years. I have several high-end homes under contract that are set to close in March, so that shows me that market is strong, but there are lots of investors getting into the market, too, at lower price points. It’s good, well-rounded activity.”
HOME SALES DATA (January)
2018: $81.53 million
2017: $73.21 million
2016: $62.81 million
Median Sales Price
Median Sales Price