Real estate agents from Rogers Avenue in Fort Smith to Walton Boulevard in Bentonville are optimistic about the recovering housing market in their immediate areas.
They have ample reason to smile, said Paul Bynum, analyst with MountData.com. He reports the number of homes sold in February rose 60.53% in Northwest Arkansas with a 24.46% spike in the Fort Smith area when compared to a year ago.
February home sales volume totaled $637.36 million in Benton and Washington counties, up 24.2% from the prior year.
Sebastian and Crawford counties together recorded home sales volume of $12.71 million last month, up 11.29% from February 2011.
“There has literally never been a better time to buy a home with inventories declining and the lowest interest rates in history,” Bynum said.
January home sales in both markets were down compared to the 2011 period, according to The City Wire’s Arkansas Home Sales Report.
NWA PRICE SURGE
Benton County reported a whopping 247 sales last month, up 26.66% from a year ago thanks in part to the return of Walmart’s apparel division from New York and the vendors who followed. The median price per-square-foot jumped 10.85% to $73.50 among those homes sold in Benton County last month.
Washington County reported 111 home sales, which was 17 less than a year ago. But the median price jumped sharply to $77.30 per-square-foot, an annual increase of 15.71%.
This marks four consecutive months for positive pricing trends in the region after sliding backward since 2007.
The local Coldwell Banker franchise in Northwest Arkansas reports its best start in four years, according to President George Faucette.
“The past three months of our written business is up 46% from the previous year,” he explained.
He said consumer confidence has been bolstered by more good news than bad for change with respect to job growth, fewer applications for unemployment insurance, rising Dow Jones Index and improvements in builder confidence.
“On a higher level it looks like the Euro debt crisis has been contained, and the only cloud in the forecast are volatile oil prices and ultimately higher gas prices for the consumer,” Faucette said.
Northwest Arkansas agents report more well-qualified buyers shopping in the higher price levels than seen in the past few years. Through February there were two homes priced over $1 million that sold, and nearly two dozen sales above the $400,000 range.
While ultra-expensive home sales do somewhat skew average prices, Bynum said the majority of homes sold on both sides of the Bobby Hopper tunnel are still in the lower ranges between $75,000 to $100,000.
FORT SMITH REGION PERSPECTIVE
Kevin King, owner of Weichart Realtors King Realty in Fort Smith, said buyers range from first timers to investors and some seasoned homeowners looking to move up.
“We are seeing good absorption in the inventory which is a positive for sellers, but the overall market still favors buyers,” King said.
Sebastian County reported 70 home sales in February, flat with a year ago, but the median price per-square-foot tumbled to $52, down 26.23% from a year ago.
King said a higher number of distressed homes are moving their way through the market which is likely the reason for the steep decline. He estimates about 25% of local home sales are distressed. He said the median home price in Sebastian County has been fairly stable around $115,000 for several months until the sharp February decline to $86,300.
King expects the one-month dip is related to investors who are bargain shopping the distressed market.
In Crawford County there were 47 home sales in February, totaling $5.59 million in accumulated volume. This compares favorably to 24 sales valued at $2.86 million a year ago.
Both markets report a 6-month supply of homes in the lower categories under $125,000, which favors sellers marketing to first-time buyers.
The experts say it’s been a while since any metric aside from lower interest rates has helped sellers. They are hoping the pent-up buyer demand will be unleashed in the coming months if the economy continues to grow.
“We are extremely optimistic our 2012 sales will be higher than last. Overall, Weichart expects 2012 volume to increase 5%, and while that’s not huge, it is a nice step in the right direction,” King said.
Faucette also expects his firm to outperform 2011 levels.
“We are seeing prices stabilize, inventories decrease and better credit standards which all point to a stronger market,” Faucette said.
One element favoring buyers aside from the ridiculously low 3.87% interest rates this week is higher loan-to-value ratios creditors are giving, according to Faucette. He said since 2010, lenders have increased their loan-to-value lending ratio from 74% to 82%, which essentially means borrowers can put less money down.
In February, MountData reports the average days on market in Northwest Arkansas rose 130, up from 124 a year ago. The Fort Smith area homes sold in an average of 110 days, down from 136 days in the prior year. The days-on-market statistic is the time a home is listed until it comes under pending contract.