New Home Inventory Dips Below 1,000

The Northwest Arkansas absorption rate slowed during the fourth quarter of 2008 according to The Skyline Report prepared for Arvest Bank by the University of Arkansas Walton College of Business.

However, for the first time since the first quarter of 2005, the area’s supply of new, unsold homes dipped below 1,000 from a peak of 2,973 in the fourth quarter of 2006.

In the fourth quarter, from August 16 to November 15, 613 houses in active subdivisions became occupied. That was down from 765 in the third quarter and from the 794 in the fourth quarter of 2007.

The Skyline Report revised upward the area’s housing inventory from a 56.8-month supply to 59.6 based on the slowing absorption.

In the fourth quarter, 1,179 homes were sold in Benton and Washington counties, down 13.2 percent from the year-ago period.

“For many quarters the question in Northwest Arkansas has been related to supply and whether there was too much supply in the market” said Kathy Deck, lead researcher for the Skyline Report.

“This report lets us know that, for the time being, the supply issue is under control, but the new questions will more likely be on the demand side of the equation and how much the overall economic environment will affect demand for housing. We will be paying particular attention to employment growth and unemployment levels for the remainder of 2009,” Deck said.

Northwest Arkansas also saw a sharper decline in sale prices, dropping 10.4 percent in Benton County and 6.3 percent in Washington County from the year prior.

“It is heartening to see the supply of complete but unoccupied homes drop to a level that it hasn’t seen for almost three years,” said Todd White, senior vice president and loan production manager at Arvest Mortgage Company.

“At the same time, it seems that the pressures in the market worked to push prices down slightly. What is amazing to me is to see the demand for housing in Northwest Arkansas just continue to chug along month after month.” White said.