Year-to-date numbers through the year’s first six months in Northwest Arkansas show a continued increase in home prices.
Real estate agents combined to sell 5,610 residential properties in Benton and Washington counties through June. That is 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.
Those figures represent only a slight increase (0.3%) from 5,591 home sales in the year-ago period. However, the cost of buying a single-family home in the region continues to climb sharply. Homes sold in the two-county area in the first six months of 2022 had a combined value of $2.15 billion. That is up more than 25% from $1.72 billion in the first six months of 2021.
In the first six months, the average home selling price in the two-county area jumped from $308,175 in 2021 to $384,718 in 2022.
In Benton County, the average home sale through June had an average value of $398,865, up 27% from $314,296 in the same six-month period of 2021. In Washington County, the average home sale price through June was $358,761, up 21.1% from $296,208 last year.
Home sales slumped in June as rising mortgage rates caused some buyers to take a break. The result could be more listings and a decrease in record-high asking prices for house hunters.
Misty McMullen, the principal broker and owner of McMullen Realty Group, which has offices in Bentonville and Rogers, said buyers waiting on the sidelines for prices to drop and hoping to get a deal may be disappointed.
“There has only been one time in recent history that home prices fell dramatically, and that was back in 2007-2008,” she said. “That was a flawed market built on very loose financing and a huge oversupply of homes. Prices had to come down to clear the inventory. That is quite different from today’s market.”
Benton County reported 691 home sales worth $299.7 million in June. That compares with 802 (-13.8%) and $276.7 million (8.5%) in the year-ago month. In Washington County, agents sold 364 homes in June — down from 411 last year — with a cumulative value of $137.37 million, up from $134.9 million.
McMullen said multiple buyers still compete for available homes as housing inventory remains low, especially in the lower-price segments. Rising mortgage rates make the process even more challenging.
“Rising mortgage rates impact buying power, so home buyers may have to drop down a price segment to buy a home,” she said. “But I think folks will still keep buying homes. It is more difficult for first-time home buyers, but hopefully, that will change with wage growth or first-time home buyer programs.”
McMullen described Northwest Arkansas’ housing market as”correct” and driven by supply and demand. With demand at all-time highs and a tight inventory, market home prices inevitably had to go up.
“There is still a very large home shortage, and that is evident in the fact that we are still in a very strong seller’s market with just over one month of supply,” she said. “We see this within our own brokerage with multiple offers still very normal, but we do see it cooling. With the interest rates rising recently, I think there is a little bit of wait-and-see with some buyers out there, but I think they will return to the market when they see the sky isn’t falling.”