Fort Smith Market Up–For Now

Facing unknowns with optimism, Fort Smith real estate agents are encouraged by signs of a strengthening residential market.

But they’re staying cautiously optimistic as unemployment remains high.

Kermit Kuehn, director of the University of Arkansas at Fort Smith’s Center for Business Research and Economic Development, said the year has started on a strong note.

In the center’s Regional Economic Outlook Report for the fourth quarter of 2011, Kuehn wrote that home sales for the quarter were up more than 20 percent from the same period of 2010, with 472 homes sold in the Fort Smith metro area.

“The results reflect a solid rebound from the difficult market experienced in the last quarter of 2010,” he wrote.

In an interview, Kuehn said Multiple Listing Service data show January home sales were also improved, “so the tone is probably a little more upbeat for the year.”

But he warned that could change due to circumstances ranging from world economic factors to the pending closure in June of Whirlpool’s refrigerator manufacturing facility in Fort Smith, which will put about 1,000 people out of work as well as others whose jobs are dependent on the plant.

Kuehn doesn’t foresee a flood of listings hitting the market, though. He points out that most of the Whirlpool workers are older, “and if they’re homeowners, they’re probably going to stay or are in pretty good situation with their homes, so it’s hard to make a guess.

“If they’re needing to sell, they’re probably already on the market,” he said.

Ray Nellum, a real estate agent with Envision Real Estate Group LLC, collects and analyzes Fort Smith housing market data for the monthly and quarterly reports he posts on his website, www.sellfortsmith.com.

Nellum’s report for February shows 53 homes sold in Fort Smith at an average  of $103,500, compaired to last year’s average sale price of $133,000. The homes sold for an average of $55 per heated SF, and were listed an average of 172 days until contract.

In the last three months of 2011, Nellum reported 192 homes sold in the city. The average sale price was $140,846 or $66.33 per SF, compared to the average list price of $147,368. The homes averaged 164 days on the market.

Nellum said he thinks the housing market is starting to pick up, but adds, “there’s always a spurt up at this time of year, as people are getting their tax refunds and have a little extra more money to make that down payment.”

Weichert Realty-King Realty Group contributes housing market data to Kuehn’s quarterly regional report. Company co-owner Kevin King said the absorption rate of available homes has picked up in Sebastian and Crawford counties, “meaning we have a better balanced market than we did a year ago across most price ranges.”

Most homes sold are in the $75,000-$125,000 range. In the last 90 days, 171 homes sold in Fort Smith, King said, with the typical selling price around $118,000.

There’s still market activity by investors who are buying up foreclosures, he said, but he added, “The main reason people buy or sell homes is because their families are growing or shrinking.”

King said he hasn’t yet seen an influx of listings as the Whirlpool closure looms.

“It’s still business as usual,” he said.  

Kuehn points out that the psychological factor can’t be overlooked in trying to predict what the rest of the year will bring.

“If consumer sentiment continues to improve through 2012, then we might expect home sales to continue to post respectable numbers,” he wrote in his quarterly report.

“When bad news hammers you every day, you tend to take a more skittish, cautious view,” he said in the interview. “So we’ll see over the next few quarters how consumer sentiment shakes out.”