Fort Smith metro home sales down 13% in 2022, sales value down 10.6%

Rising interest rates in 2022 put a halt on two years of record Fort Smith metro home sales. The metro had 3,827 homes sales in 2022, down 13% from 4,400 in 2021. Sebastian County had an almost 16% decline in 2022 home sales compared with 2021.

The value of sales totaled $824.117 million, down 3.4% compared with the same period in 2021. The average home price for sales in 2022 was $215,359, better than the $193,957 in 2021, according to data provided by Ashlee Milton, an executive broker with Chuck Fawcett Realty in Fort Smith and Northwest Arkansas. Average days on market in 2022 was 66, below the 70 days in 2021.

Franklin County was the only Arkansas county in the Fort Smith metro to see an increase in home sales. The county had 180 sales in 2022, up from 160 in 2021. The value of the sales in 2022 was $34.871 million, well above the $26.506 million in 2021.

Existing U.S. home sales fell 36.9% in January compared with January 2022, according to the National Association of Realtors. Freddie Mac reported that the average interest on 30-year fixed rate mortgages was 6.5% as of Feb. 23, up from around 3.7% in February 2022.

Home sales in 2021 were up 10.6% over 2020, with 2020 home sales up 13.4% compared with 2019. 2021 marked a record of 4,400 home sales in the Fort Smith metro. Average home prices in Sebastian and Crawford counties topped $200,000 for the first time in 2021.

Milton said rising interest rates have certainly put a damper on sales.

“The change in interest rates in August of 2022 caused an almost instantaneous halt to a lot of buyer activity. I cannot say that I’m surprised at the change. The rate at which properties were coming up and then closing was not a speed we could maintain for long. There simply aren’t enough houses available to continue at that pace,” Milton told Talk Business & Politics.

She said when interest rates rose buyers began to return to more normal practices, such as showing restraint in offers made, making more requests for repairs and not waiving inspections or appraisals. She said sellers are “pricing a little more in line with what the market trends are allowing and less frequently off the top of the charts.” As to what 2023 will deliver, Milton said sales may again decline.

“I feel like 2023 will be a lower inventory count over 2022 for a few reasons: interest rates haven’t gone down yet – though there is promise for the FHA loan coming soon to be better terms for buyers – and we still have a housing shortage. Builders just can’t build enough homes to accommodate the needs in the River Valley or Northwest Arkansas,” she said.

There is some optimism that interest rates will moderate in 2023.

“Lenders have been saying that they are confident the interest rates will be better this summer. They are offering loans with the ability to refinance quickly because they are so confident in the summer rate change,” Milton said.

Metro area data comes from Crawford, Franklin, Logan, Scott and Sebastian counties in Arkansas, and parts of eastern Oklahoma. About two-thirds of the home sales are from Crawford and Sebastian counties.

SEBASTIAN, CRAWFORD COUNTY SALES
Home sales in Sebastian County during 2022 totaled 1,782, down from 2,116 in 2021. Home sales in the county represent 46.5% of homes sold in the metro. The value of homes sold was $384.512 million, 10.6% below the $430.249 million in 2021. The average home sales price was $215,776, up compared with the $203,332 in 2021.

Home sales in Crawford County during 2022 was 728, down 15.4% compared with the 861 in 2021. Home sales in the county represent 19% of homes sold in the metro. The value of homes sold was $166.104 million, below the $174.701 million in 2021. The average home sales price was $219,923, up from the $202,905 in 2021.

MULTI-FAMILY, COMMERCIAL ACTIVITY
The metro area had 144 multi-family (apartment) sales in 2022, just below the 146 in 2021. The value of the sales was $67.088 million, well above the $54.974 million in the same period of last year. The average price of each deal was $465,890, also above the $376,536 in 2021. The largest multi-family deal in 2022 was $5 million, below the $6.625 million in 2021.

Fort Smith metro commercial property deals totaled 135 in 2022, below the 145 in 2021. The value of the deals was $42.486 million, below the $58.077 million in 2021. The average price of each deal was $314,715, below the $389,781 in 2021. The largest commercial deal in the metro was $2.944 million in the first half of 2022, well below the $6.194 million in 2021.

METRO HOME SALES NUMBERS
• Fort Smith Region (Crawford, Franklin, Logan, Scott and Sebastian counties, and areas of eastern Oklahoma)
2022
Homes sold: 3,827
Value of home sales: $824.117 million
Average price: $215,359

2021
Homes sold: 4,400
Value of home sales: $853.409 million
Average price: $193,957

• Sebastian County
2022
Homes sold: 1,782
Value of home sales: $384.512 million
Average price: $215,776

2021
Homes sold: 2,116
Value of home sales: $430.249 million
Average price: $203,332

• Crawford County
2022
Homes sold: 728
Value of home sales: $166.104 million
Average price: $219,923

2021
Homes sold: 861
Value of home sales: $174.701 million
Average price: $202,905