Local home sales rebounded in May across Northwest Arkansas as agents report an uptick in cash deals and investor activity.
MountData.com shows unit sales rose 7.3% in Benton County with 367 deals done in May. In the same month, Washington County reported 217 transactions, up 6.89%, from the year-ago period.
Total volume in the two-county area increased to more than $97.115 million in May, up 23% from a year ago as median and average home prices continue to rise. This price appreciation continues to reverse a five-year declining trend going back to 2007, according to local appraisers.
Median home prices in Benton County rose 15.27% in May to $142,475. And year-to-date median prices are up 14.64%, which is a welcome sight to agents and prospective sellers.
Prices have ticked higher as a result of lower inventory levels of both distressed and non-distressed properties listed for sale — 6,149 — as of June 14. Inventory levels are down from more than 8,000 at the market peak in 2006.
Agents like Vickie Briolat of Crye-Leike say demand is picking up. She is seeing more cash deals than she can remember in recent years.
“I have had three cash deals in the past 30 days, two of them have just closed — both transactions were over $200,000. I also have an $84,000 cash deal set to close in early July. These deals were not investor related, but there are some investors shopping in this market again,” Briolat said.
George Faucette, CEO of the local Coldwell Banker franchise, attributes the uptick in cash deals to more investor activity
“However, some cash deals are really financed through lines of credit or by using other collateral, but those terms are not part of a contract to purchase. From the selller's/agent's perspective, the transactions are for cash,” Faucette said.
He agrees the price appreciation seen in the Northwest market is a real plus to morale and a confidence boost for sellers, buyers and lenders. Agents don’t expect the recent reversal in foreclosure litigation to have a huge impact on prices as more of the distressed properties come back into the inventory.
“If and when more foreclosures hit the market, it will drive the average price down some, but I do not believe that will cause a significant decrease in the prices of non-foreclosed home sales. Generally speaking, there is a significant difference in the condition and quality of foreclosed homes versus resales and new homes. Those differences are reflected in both appraisals and a buyer's view of the homes they want to purchase and live in,” Faucette said.
Faucette is optimistic about the back of 2012. He said his firm’s completed business is up 31% on volume through five months of this year, while unit sales rose 26%.
“We have budgeted growth of 13% in 2012. Our closed business through five months, annualized, puts us on track to sustain a 16% growth rate this year,” he said.
The entire region has been in the midst of a solid recovery in 2012 with Benton County leading the way. Agents have sold 1,444 homes in Benton County for a total volume of $245.750 million, up 17.8% from a year ago, according to MountData.com.
Washington County’s improvement has also been robust with 860 homes sold. This business totaled $133.546 million, up 11.4% from the 2011 period, Mountdata reports.
Faucette said the only threat he sees to the ongoing recovery in the local real estate market would be a cease in job growth or something on a global scale very detrimental to Wal-Mart or Tyson Foods.
At this point he doesn’t think the recent negative news relating to Wal-Mart’s bribery scandal is severe enough to kill the local job growth.
Another important stat that continues to show improvement is “days on market," which fell to 95 days in Benton County and 100 days in Washington County last month. This stat measures the time from listing to contract. A year ago “days on market” averaged 115 in Benton County and 122 in Washington County.
Faucette said that is an excellent indicator of a stronger market, and if the region can sustain its job growth, the “days on market” should reduce even more.
The local unemployment rate stood at 5.3% in April, its lowest reading since 2008, according to the Bureau of Labor Statistics.
Home Sales (January through May)
2012: 1,444 units, $245.750 million
2011: 1,354 units, $208.620 million
2010: 1,336 units, $210.550 million
2012: 860 units, $133.546 million
2011: 878 units, $119.987 million
2010: 874 units, $135.672 million
Median Sales Price (January through May)