Tepid home sales to start 2013

The local residential real estate market was muted in January as agents sold just 71 homes in Sebastian and Crawford counties combined. Unit sales slid 19.3% from 2011 and 26% from same month in 2010, according to MountData.com, an independent market source.

“January was a terrible month for home sales in Fort Smith. There were just 34 sales out of 806 listings in the city that closed in the month. I believe sales were pulled forward from the preceding months — November and December which were fairly strong months,” said Kevin King, broker and owner of Weichert Realtors King Realty.

He said the insurance and tax law changes which came into effect in January encouraged some buyers to get their deals done in 2012 but he expects February sales to be a little stronger as showings and listings are improving.

“We don’t necessarily need a lot more listings but buyers do need ample selection,” King said.

Agents sold 48 homes in Sebastian County during January. These sales had a total volume of $6.072 million. Units were down 15% and volume slumped 25% from the year-ago period, according to MountData.com.

Crawford County agents sold 23 homes in January versus 31 in the prior-year period. Sales volume declined 35% as transactions totaled $2.287 million last month, this compared to $3.520 million a year earlier.

Not only were the number of home sales down but the median sales price also took a hit in January after rising 6.9% during 2012.

In Sebastian County the median sales price was $116,000, this compared to $133,000 a in January of 2012.

Crawford County median prices also fell among the home sold last month. Median home prices of $82,250, were down 7.3% from a year ago.

King expects home prices to stay muted in 2013 as more foreclosures make their way into the marketplace.

“We did see an increase last year, but there were very few foreclosures being sold. But as that number increases in 2013, there will likely be some downward pressure on overall pricing,” King said.

Ken Colley, a local real estate appraiser for more than 40 years, says home values have been on a downward slide for the past four years, with the exception of the new home market.

“New construction homes priced between $140,000 and $300,000 seem to be holding their own, that’s not been he case with the broader market,” Colley said.

He expects foreclosures to have a bigger negative impact on pricing in 2013 and says 25% of his business is appraising bank-owned property.

Colley said a home purchase appraisal can be negatively impacted from foreclosures in the immediate area and while he looks for non-distressed comparable sales, he said ultimately, the lender requirements dictate the comparable criteria.

“Not only do lenders want three pre-sold comparables but they also now want two listings in the mix. If there are more distressed sales or listings it could have an adverse impact on an appraisal,” Colley said.

Mortgage lender Arvest has a more positive outlook for 2013.

“This is typically a slow time of year, but we are seeing a lot of preapproval activity which will result in purchases ahead.The local economy had a lot to do with 2012 sales, and many opted to refinance and stay where they were, instead of buying. It is definitely a buyer’s market with record low rates, and plenty of inventory available,” said Maria Lau, senior vice president of mortgage lending.

Lau added that several mortgage loan products have gone away due to the mortgage meltdown a few years back, and these products have not been replaced, making purchases difficult for buyers that have unique credit situations. 

She went on to say there are still plenty of mortgage options available for qualified buyers.

January Market Activity
Sebastian County
Total Sales Volume
2013: $6.072 million
2012: $8.121 million
2011: $7.799 million

Median Sales Price
2013: $126,514
2012: $142,477
2011: $113,033

Crawford County
Total Volume
2013: $2.287 million
2012: $3,520 million
2011: $2,658 million

Median Sales Price
2013: $85,250
2012: $88,791
2011: $96,750

Source:MountData.com