Arkansas home sales strong through May

Home sales in Arkansas’ four largest markets during the first five months of 2013 are up more than 10%, and the value of homes sold are up more than 15%, according to The City Wire’s Arkansas Home Sales Report.

The gains are broad, with only the Fort Smith area seeing declines in the number and value of homes sold in the first five months of 2013.

In the four markets, the number of homes sold totaled 7,749, up 10.12% compared to the first five months of 2012. The value of homes sold in the four markets between January and May totals $1.272 billion, up 15.19% compared to the same period in 2012.

For the first five months of 2013, the number of homes sold in central Arkansas are up 8.9%, up 8.62% in the Jonesboro area and up 15.01% in Northwest Arkansas. Sales during the same period are down 0.16% in the Fort Smith area, and the values are down 4.57% compared to the first five months of 2011.

The City Wire’s Arkansas Home Sales Report captures home sales data in the state’s 14 most populated counties within the state’s four largest metro areas — Central Arkansas, Fort Smith area, Jonesboro/Northeast Arkansas and Northwest Arkansas. The report, which records closed sales, accounts for between 70% and 75% of total Arkansas home sales. The report counts the number of sales closed in May.

The total value of homes sold in the four markets between January and May was $366.379 million, up 10.48% compared to the 2012 period, and up 23.38% compared to the 2011 period.

Home sales activity was up for all markets during May. There were 890 homes sold in central Arkansas, up 5.2% compared to May 2012, and up 20.9% compared to May 2011.

May home sales totaled 663 in Northwest Arkansas, up 8.87% compared to May 2012 and up 21.43% compared to May 2011.

Jonesboro area home sales totaled 199, up 19.88% compared to May 2012 and up 43.17% compared to May 2011. In the Fort Smith area, home sales totaled 151, up 3.42% compared to May 2012, but down 1.95% compared to May 2011.

THE REGIONAL PICTURE
Central Arkansas — Home sales
Jan.-May 2013: 3,662
Jan.-May 2012: 3,362
Jan.-May 2011: 3,135

Fort Smith area — Home sales
Jan.-May 2013: 626
Jan.-May 2012: 627
Jan.-May 2011: 656

Jonesboro area — Home sales
Jan.-May 2013: 756
Jan.-May 2012: 696
Jan.-May 2011: 704

Northwest Arkansas — Home sales
Jan.-May 2013: 2,705
Jan.-May 2012: 2,352
Jan.-May 2011: 2,232

The top five counties in terms of Jan.-May 2013 home sales:
Benton — 1,689, up compared to 1,473 in 2012
Pulaski — 1,680, up compared to 1,614 in 2012
Washington — 1,016, up compared to 879 in 2012
Craighead — 606, up compared to 538 in 2012
Faulkner — 584, up compared to 460 in 2012

Link here for a PDF document of the May 2013 data.

BEHIND THE NUMBERS
Home sales continued to improve in May, but buyers and sellers received unexpected news that might push interest rates higher in the weeks and days to come. Federal Reserve Chairman Ben Bernanke announced recently that the Fed would begin to taper off its program that has effectively kept mortgage rates low for the past few years.

The Fed has helped keep mortgage rates low through an $85-billion-per-month bond purchase program created to stimulate the economy. In May, Bernanke told Congress the Fed could start to back off those bond purchases, leaving speculation as to how mortgage markets would react.

Markets didn’t react well to the news – the average rate on a 30-year, fixed interest mortgage hit its highest point of the year on June 14 at 4.17%. On June 19, Bernanke backed off that statement a bit by saying the Fed will continue to purchase bonds until the outlook for the labor market has improved.

Whether that’s enough to calm investors – and keep mortgage rates low – remains to be seen.

Realtors around Arkansas reported that sales continue to improve around Arkansas. North Little Rock Realtor Jim Fore said he’s seen improvement in the market from people who were nervous about purchasing a home in the past but were concerned that interest rates might not say low for long.

“There's always some pent up demand and there's always some folks sitting on the fence,” he said. “Some of the folks are taking action.”

Fore said he’s noticed the average sales prices in Pulaski County have increased, as have median prices. The rising median prices, he said, suggest that larger homes may be selling as wealthier purchases get back into the housing market.

LARGER HOMES LAG
Meanwhile, the opposite might be true in Jonesboro where sales are up but average prices have dropped a bit over the past year.

“Everything is doing better except the larger homes,” said Jonesboro Realtor Sherlyn Blackwell. “They’re still harder to sell.”

She said business has picked up in her office, but houses costing $300,000 or more are still moving slowly as most activity is taking place in the lower and middle ends of the market. Still, she said the increased volume is a good sing.

“Things are looking up, but not as quickly as we’d like,” she said, adding that the potential of increasing interest rates is a concern.

Meanwhile, the same factors that caused The City Wire Economist Jeff Collins to state housing markets were moving in the right direction were in place in May.

He pointed out a general increase in average sales prices and a decline in number of days on the market are signs of improvement. For now, houses are generally selling for more money and they’re not sitting on the market as long – good signs for home owners in the Natural State.

FORECLOSURES RETURN
In Northwest Arkansas, agents said foreclosure inventory is coming back onto the market after nearly a two-year lull as lenders are taking the opportunity to list foreclosed homes at a time when prices are moving higher.

“We are seeing more foreclosures flowing into the market, which will tend to damper prices, but the lower inventories are offsetting that somewhat,” George Faucette, CEO of Coldwell Banker Harris McHaney & Faucette Real Estate, explained.

He said May 2012 was a strong comparison month and he is pleased with the way the local market is performing this entire year. Faucette said his firm’s sales are up 28% year-to-date through May, when compared to last year.

Chuck Fawcett, broker/owner of Chuck Fawcett Realty in Fort Smith, said he feels good about the housing market in the Fort Smith region, and said the numbers show some stabilization in the market. And while the numbers may not reflect definitive increase in business, Fawcett said his business is buzzing.

"Right now the market is pretty strong. We sold three or four brand new houses in the past month," he said, adding that he had additional customers looking to buy existing homes in the market, something that has been a big driver in the housing market as of late.