The pandemic has impacted many financial sectors since the partial shutdowns at the state level began in mid-March. Unemployment rates have skyrocketed, wages have been down, and profits in certain sectors such as manufacturing and restaurants are projected to take multibillion dollar profit hits by the end of the year.
The country has been in a recession since before the pandemic began, according to federal economists who said the recession began in February.
One sector that has remained steady throughout the health crisis across the country and in Northeast Arkansas is residential home sales. Halsey Thrasher Harpole Real Estate Managing Partner Gary Harpole told Talk Business & Politics he’s witnessed resilience in the residential markets in and around Jonesboro.
“It’s a seller’s market … we expect the residential market to remain strong through 2021,” he said. “We are very high on Jonesboro right now.”
Statistics compiled by Jonesboro Unlimited, an organization that promotes economic growth in the city, align with what Harpole has witnessed. There have been 361 new homes sold in the city through August of this year, a nearly 30% (274) increase in the total number of new homes sold as compared to the same time period in 2019. In fact, the number of new homes sold in 2020 is only about 30 total away from all those sold in 2019, according to Jonesboro Unlimited numbers.
Only three of the new homes were sold for $100,000 or less, while the majority, 214, were sold in the $100,000 to $200,000 range. At least 67 were sold in the $200,000 through $250,000 range while 49 were sold in the next range leading to $300,000. At least 28 homes were sold in the $300,000-plus range. All those figures are well ahead of the same number sold in those ranges last year and in previous years.
Existing home sales have been on the rise as well. Through the end of August, at least 1,642 existing homes were sold, nearly 138 more than during the first eight months of the previous year.
Commercial sales have been more volatile, but have still been good, Harpole said. Warehouse space-type buildings have been selling well. Restaurant and retail space has been slower due to the ongoing pandemic, he added.
Part of the retail sector uncertainty has been related to the situation at The Mall at Turtle Creek, The mall, the last closed box mall built in the U.S. when it opened in 2006, was partially destroyed when an EF3 tornado ravaged the building in March. It’s still not clear what businesses will return to the mall or will build elsewhere.
Hailey Schafer, an administrative assistant with the NEA Board of Realtors, told Talk Business & Politics the organization has been monitoring the same strong housing trends in recent months. In some months, sales are up 15% and the volume of real estate sold in the city, which includes commercial sales is $432 million, a nearly $69 million increase from 2019.
“Our market is strong right now,” she said.
Prices for homes sold have remained relatively steady. The average home sale price has been about $166,418, a drop of about $2,000 from the previous year.
Jonesboro seems to mirror trends in other parts of the state and country. Norada Real Estate Investments (NRE) projects the national market to remain strong through the end of next year. Sales did plummet when the shutdowns began in the late first and early second quarter, the real estate investment company reported. But, that trend line changed.
“In fact, in just the second quarter alone, the housing demand went from being down 41% to up 40% year-over-year. That’s a quick and huge bounce back for the housing market. Low mortgage rates, population growth, and an increase in buyer interest are further driving the demand for available housing. Earlier in the first quarter, some economists had predicted that housing prices would fall in 2020 but such forecasts are losing ground as the U.S. housing market, so far, remains undaunted by the economic recession,” the company reported.
NRE did note that new listings are down 12% for the year, and inventory is down 39%. That is leading to price increases across the country.
Harpole has explanations for why the Jonesboro market has been so strong. Jonesboro’s diverse economy with a jobs base that includes food production, agriculture, jobs in government and healthcare among others, are not as impacted when the national economy wanes. Many communities throughout the country are dependent on singular industry sectors such as car manufacturing.
Harpole noted that during recent recessions, especially in 2008, Jonesboro’s economy didn’t crash nearly to the extent that other regional economies did.
“We do seem to be somewhat insulated,” Harpole said. “We have steady population growth each year. We have a diverse economy.”