May home sales down almost 9% in Northwest Arkansas

May was a milestone month in Northwest Arkansas as the growing region reached 500,000 in population, helped by those moving to Benton and Washington counties.
The population growth combined with steady home values and low interest rates has kept real estate broker Nicky Dou busy this year.

“Today is the middle of the year. I’ve officially got more in closed and pending sales than in all of last year with two more transactions,” said Dou, CEO of Real Estate in Northwest Arkansas and broker for Keller Williams.

Agents across the two-county area sold 648 homes in May with a cumulative value of $124.432 million, according to MountData.com analyst Paul Bynum. While the total number of May transactions were down 8.9% from the year-ago period and total values slid 3.5% year-over-year, agents report staying plenty busy.

The May decline comes from a tough comparison with May 2013. Bynum said last year was one of the best on record in Northwest Arkansas and anything remotely close to those levels is good.

George Faucette, CEO of the local Coldwell Banker franchise, said his agents were active writing deals in May. He said the firm’s unit final sales were up 10% in May, compared to the prior month, and average sales price was down about 4%. In pending May business that will close this month or next, Faucette said units sales were down slightly, but sales volume rose 2% thanks to a 4% rebound in average prices.

He said the foreclosed property sales continue to diminish which is reflected in the average sales price being slightly higher, but it’s also the reason that closed and pending new business for the region has slowed somewhat from a year ago.

Dou said in all of 2013 she had 66 closed sales totaling $18.6 million. At this point in 2014, her sales pending and finalized total 69 with $19.5 million in production values. She said the overall market is strong, especially for new construction. She and husband Jerry Dou represent three subdivisions in Benton County — Hyde Park, Kerelaw Castle and Rolling Acres where she said homes are selling well.

Bynum said there were 2,660 homes sold in the first five months of this year by agents in the two counties. He said it took an average of 60 days to obtain a contract. Total sales through May equaled approximately $484 million, down about 3% from last year.  Units sales are down 4% year-over-year, but the median sales price is up slightly at $147,460 this year, which is about $84.5 per square foot.

Jim Long, an agent with Crye-Leike in Bentonville, said he is having a good year as there is adequate buyer demand in this market. He said the lower levels of existing home inventory is helping to keep prices moving upward. He said sellers are getting about 97.8% of their listing price, which is slightly higher than a year ago.

Housing is a largely a local metric linked to job growth and other factors and the Northwest Arkansas housing sector appears to be moving ahead faster than the nation. Economists with Wells Fargo, one of the nation’s largest mortgage lenders, recently scaled back its housing forecast reflecting the impact from the harsh winter weather earlier this year and slower underlying economic growth.

“After incorporating the effect from a 1% decline in the first quarter, real GDP is now expected to rise just 2% in 2014. New home sales and single-family housing starts are also expected to rise much more slowly, with new home sales climbing 8.4% to 465,000 units, while single-family housing starts climb 10.9% .

Wells Fargo notes that new home prices are expected to moderate further in coming months, with the median price rising just 2.6% to $276,000 in 2014. With more modest sales, new single-family home construction will also rise slightly less than previously projected. Wells Fargo also warns that many markets are finding themselves out of balance with home prices having been pulled higher by an influx of investor purchases and exceptionally tight inventories well ahead of any fundamental improvement in demand. 

Local real estate experts believe sales in Northwest Arkansas will continue to pick up through the summer months and they expect the back half of 2014 to be as good as last year, which started out strong and tapered somewhat toward the year’s end.

Bynum reports there is 6.7 months of home inventory in the two-county area, which he classifies a balanced market.

Home Sales Data (January-May)
• Benton County
Unit Sales
2014: 1,723
2013: 1,736

Volume Sales
2014: $316.563 million
2013: $317.923 million

Median Sales Price
2014: $146,650
2013: $149,900

• Washington County
Unit Sales
2014: 935
2013:1,048

Volume Sales
2014: $165.514
2013: $178.877

Median Sales Price
2014: $148,813
2013: $145,000