At the midway point of 2021, with inventory still low, Northwest Arkansas home prices continue to rise. The latest data doesn’t give any suggestion that those increases will stop.
According to data from the Matrix software platform used by the Northwest Arkansas Board of Realtors, home prices in Benton and Washington counties increased 17% through June this year, compared with the same six months of 2020.
This year, homes sold in the two-county area in the first six months had a combined value of $1.71 billion, compared with $1.44 billion in the same period last year. That’s an average selling price of $307,917 for each home sold this year, compared with $263,050 through June last year.
As has been the case for months, real estate executives report there aren’t enough homes in Northwest Arkansas for everyone in the market. That competition — along with the high land development cost — is driving up prices.
“There’s just not enough inventory,” said Brandon Long, broker/owner of Springdale-based Weichert, Realtors-The Griffin Co., which has offices throughout the region and Fort Smith. “This isn’t like a car lot where you can just ship in a bunch of cars, and then you’ve got inventory.”
An encouraging sign, Long said, is that inventory levels are beginning to creep back up the past couple of months.
“I’m not saying we’re a buyers’ market by any stretch, but we’re not seeing those listings that are getting 15 to 20 offers,” he said. “There are still multiple-offer situations, but it’s more like three or four.”
In Benton County, the average home sale through June had an average value of $313,963, up 15.3% from $272,092 in the same six-month period of 2020. In Washington County, the average home sale price through June was $296,051, up 19.8% from $246,917 last year.
“I have friends in other markets like Dallas and Austin and Nashville who have been in a situation like this for years,” Long said. “I’m just wondering if this might be our new normal. People talk about a bubble bursting, but there’s not enough inventory for a bubble to burst. There’s got to be some self-correction. I don’t know what that is. Interest rates could [increase], and that may level off the pricing. But I don’t know that they’re going to go down.”
While home prices skyrocket, the number of home sales is about the same as last year. Real estate agents combined to sell 5,564 residential properties in Benton and Washington counties through June. According to the data, those figures represent a slight increase (1.4%) from 3,340 home sales in the year-ago period.
From a national perspective, Lawrence Yun, National Association of Realtors chief economist, said in a June 30 report that despite the pandemic, record-high prices and all-time low inventory, buyers are still lining up at a feverish pace.
“While these hurdles have contributed to pricing out some would-be buyers, the record-high aggregate wealth in the country from the elevated stock market and rising home prices are evidently providing funds for home purchases,” Yun said. “More market listings will appear in the second half of 2021, in part from the winding down of the federal mortgage forbearance program and from more home building.”