Northwest Arkansas home sale values in 2021 increased 20.3% from the comparable 2020 figure. It capped a 10-year period in which the region evolved from a $1 billion-plus residential real estate market to a nearly $4 billion one.
Real estate agents combined to sell $3.97 billion in residential real estate in Benton and Washington counties last year. That’s according to data from the Matrix software platform used by the Northwest Arkansas Board of Realtors (NABOR) and provided to the Northwest Arkansas Business Journal by Marcus Necessary, vice president and executive broker with Weichert, Realtors-The Griffin Co.
The combined price of single-family properties sold in the two-county area in 2020 reached $3.30 billion, a 25% increase from $2.64 billion in 2019. Home sale values topped $2 billion for the first time in 2016 ($2.08 billion).
Last year, the median price of a home sold in Northwest Arkansas rose 15.4% to $265,500. That’s up from 9.9% a year ago.
While home values continue to rise rapidly, unit sales slowed in 2021. Real estate agents combined to sell 12,336 properties in the two-county area last year. According to the data, those figures represent a 2.4% increase from 12,048 home sales in 2020. The year-over-year increase in unit sales from 2019 to 2020 was 12.8%.
Broken down by county, Benton County had a 12-month sales volume of $2.65 billion last year, up 20.4% from 2020. Unit sales were up 2.9% to 8,015. The average selling price of a home in Benton County last year was $331,574, up 17% from the previous year.
In Washington County, total sales volume rose 19% to $1.31 billion last year, while unit sales were up 1.4% — 4,261 to 4,321. The average selling price in Washington County last year was $305,187, up 18.2% from the previous year.
According to historical data compiled by NABOR, real estate agents sold $1.07 billion worth of residential real estate in the two-county area in 2012. The activity has steadily climbed, topping $2 billion in 2016 and $3 billion in 2020.
To further illustrate the market growth, Necessary said the average home sale price in the two-county area registered $157,000 in January 2012. This past December, the average home sale was $355,000.
“It’s a unique environment,” he said. “With the fed printing money, the pandemic…all these factors that have never remotely been put together before. How do you predict the future? For anything to change, it’s like any other economic problem—it’s either got to be that the supply increases or demand decreases. I don’t see any reason for either until interest rates start to increase.”
When asked whether Northwest Arkansas’ rapid increase in home sale values is good, bad or neither, Necessary had this to say.
“I wouldn’t call it healthy. In the sense that we have such a shortage of inventory. It’s creating [situations of] multiple offers, bidding over asking price [and] appraisal waivers.”
Necessary said mortgage rates are still historically low, but they are slightly increasing. Freddie Mac reported that the 30-year fixed-rate mortgage averaged 3.56% in the week ending Jan. 20, up from 3.45% the week before. That’s the highest average since March 2020, when it was 3.65%.
“Most experts believe rates will rise this year,” Necessary said. “If that happens, will it be significant enough to compress pricing? Time will tell.”