Area home sales suffer 39% dip in July

Evidence is mounting that expiration of a federal tax credit for homebuyers may result in a big slowdown in the regional housing market during the second half of 2010.

Home sales during July in Crawford and Sebastian counties were down more than 39% compared to July 2009. Crawford County saw 31 new and existing homes sold in July, down 35% compared to July 2009, while Sebastian County saw a 40% decline with 84 homes sold. The figures are from the King Realty Group’s July report prepared by Realtor Ernie Schimmelman.

Schimmelman predicted in June that expiration of a home-buyer tax credit may depress numbers further into 2010. The federal tax credit provided up to $8,000 for first-time home buyers and up to $6,500 to home buyers. The program requires homes to be under contract by May 1 and close before July 1.

“It seems clear from the bubble that peaked in May in both counties … that the government stimulus advanced many of the sales that usually occur later in the year,” Schimmelman noted in his July report.

The number of new and existing homes sold in the January-May 2010 period in Crawford, Franklin and Sebastian counties totaled 805, up 6.2% over the same period in 2009. The value of those homes sold in the period totaled $98.746 million, up 8.8% compared to the 2009 period, according to a report released July 1 by the Arkansas Realtors Association. (The ARA has had a personnel change and is about a month late with its June report.)

As has been the trend, activity in the market is focused on homes priced below $200,000. In Crawford County, there were 316 homes in that sector, or 76.3% of the inventory of homes for sale. In Sebastian County, 654 homes for sale are listed at or below $200,000, or 71.6% of the market.

July building permits in Fort Smith, Greenwood and Van Buren showed a big decline in residential construction. Fort Smith issued 11 permits for new home construction valued at $1.878 million in July, down 22.5% in value from the 25 permits valued at $2.425 million in July 2009.

David Hughes, executive director of the Greater Fort Smith Association of Homebuilders, said the slowdown is primarily a result of the tax credit expiration. He also cited “uncertainty in the consumer market” caused by continued high unemployment as a possible reason for a potential decline in the regional housing market.

The King Realty Market Group Report (as prepared by Ernie Schimmelman):
Crawford County (July)
Homes listed: 414
Homes sold, July 2010: 31
Homes sold, July 2009: 48
Mean price, June (rolling 12-month rate): $120,240
Homes listed $0 to $200,000: 316
Homes listed $201,000 to $500,000: 85
Homes listed $501,000 and up: 13

Sebastian County (July)
Homes listed: 913
Homes sold, July 2010: 84
Homes sold, July 2009: 141
Mean price, June (rolling 12-month rate): $131,074
Homes listed $0 to $200,000: 654
Homes listed $201,000 to $500,000: 216
Homes listed $501,000 and up: 43