NWA home sales dipped nearly 12% in 2022

Rising mortgage rates and continued low inventory contributed to a nearly 12% decline in home sales in Northwest Arkansas’ two largest counties in 2022.

Real estate agents combined to sell 10,920 residential properties in Benton and Washington counties last year. That’s according to data from the Matrix software platform the Northwest Arkansas Board of Realtors (NABOR) uses.

According to the data, those figures represent an 11.6% decrease from 12,349 home sales in 2021. According to historical figures previously reported by the Northwest Arkansas Business Journal, unit sales were up 2.4% in 2021, 12.8% in 2020 and 6.3% in 2019. That followed annual gains of 1.3% in 2018, 7.7% in 2017 and 9.1% in 2016.

“The mortgage rates heightened the inventory shortage as potential sellers decided to wait,” said Chris Demarest, an executive broker and senior vice president with Lindsey & Associates in Fayetteville. “Many of our clients were unwilling to pay higher prices at higher rates, so they chose to stay put.”

Demarest said builders were also still struggling with supply chain issues last year. Many homes that were under contract to close in 2022 are now starting to close.

“Recent drops in mortgage rates have buyers out shopping again, and sales have picked up,” he said.

On the other hand, home sale values in Northwest Arkansas continued to climb. Collectively, the two-county residential activity topped $4 billion for the first time in 2022 — just two years after eclipsing $3 billion.

Last year, the combined price of single-family properties sold in the two-county area reached $4.24 billion, a 6.7% increase from $3.98 billion in 2021. Home sale values topped $2 billion for the first time in 2017 ($2.18 billion).

In 2022, the median price of a home sold in Northwest Arkansas rose 21.1% to $326,000.

Benton County residential properties in 2022 had a sales volume of $2.81 billion, up 5.6% from 2021. Unit sales were down 12.3% to 7,035. The average selling price of a home in Benton County was $400,274, up 20.7% from the previous year.

In Washington County, total sales volume rose 8.3% to $1.43 billion last year, while unit sales were down 10.1% — 4,326 to 3,885. The average selling price of a home in Washington County was $368,229, up 8.6% from the previous year.

“We’re still seeing prices on the rise, but just at a much slower pace,” said Brandon Long, broker/owner of Springdale-based Weichert, Realtors-The Griffin Co. “Over the past six months, sellers were not enjoying the same seller-friendly terms we saw in the first several months of 2022 [like] appraisal gaps coverages, delayed occupancy, minimal contingencies and no seller-paid closing costs. Before jumping into a contract, buyers were afforded the time to properly evaluate real estate.

“We have noticed that in the past several weeks, homes that are priced right are still getting multiple offers and some of those seller-favorable terms from last year are being used again to help buyers win those offer wars.

“In my opinion, today’s market is much healthier than where we were a year ago when buyers rushed to put homes under contract and figured it out later, leading to historically high numbers of contract terminations —around 33% to 35% nationally.”