Editor’s note: This is the June 2012 report of The City Wire’s Arkansas Home Sales Report. The report, released monthly, accounts for between 70% and 75% of total Arkansas home sales. The report is sponsored by Fort Smith-based Westark Plumbing.
Homes sales in Arkansas’ largest metro areas are up 2.19% for the first half of 2012, but ended the period with June sales that were down more than 3%.
There were 1,772 homes sold during June in the four large market areas measured by the The City Wire’s Arkansas Home Sales Report, down 3.22% compared to June 2011, and down 3.54% compared to June 2010.
The City Wire’s Arkansas Home Sales Report captures home sales data in the state’s 14 most populated counties within the state’s four largest metro areas — Central Arkansas, Fort Smith area, Jonesboro/Northeast Arkansas and Northwest Arkansas. The report, which records closed sales, accounts for between 70% and 75% of total Arkansas home sales.
During the first six months of the year, home sales in the four markets totaled 8,765, up 2.19% compared to the same period in 2011, but down 8,79% compared to the same period in 2010.
Michael Pakko, University of Arkansas Institute for Economic Advancement chief economist and state economic forecaster, said the June numbers indicate “a fairly positive report.”
“However, it appears that the increases in sales are concentrated in a few local markets. Pulaski County and Lonoke County each show sizable increases in June, but other parts of the Central Arkansas area were weaker. In particular, Faulkner, Jefferson, and Saline Counties all show lower sales than the in June of 2011,” Pakko explained.
Pakko also noted that comparisons to 2010 are still relevant because a home buyer tax credit program ended in April 2010.
“With a few isolated exceptions, sales are well-below the pace of the first half of 2010, but that’s not surprising. The second home-buyer tax-credit program expired in April 2010, so the sales in the first half of that year were uncharacteristically strong,” Pakko said.
Pakko said another strong sign in areas with strong monthly and year-to-date sales gains in 2012 is a decline in the average days on market – the time between when a home is listed and when it is sold. The average days on market in the 14 counties during June was 89.09, down from 97.06 in June 2011.
REGIONAL FIGURES (Year-to-date)
Central Arkansas — Home sales
Jan.-June 2012: 4,240
Jan.-June 2011: 4,005
Jan.-June 2010: 4,882
Fort Smith area — Home sales
Jan.-June 2012: 800
Jan.-June 2011: 836
Jan.-June 2010: 957
Jonesboro area — Home sales
Jan.-June 2012: 810
Jan.-June 2011: 859
Jan.-June 2010: 972
Northwest Arkansas — Home sales
Jan.-June 2012: 2,915
Jan.-June 2011: 2,877
Jan.-June 2010: 2,799
The top five counties in terms of Jan.-June 2012 home sales:
Pulaski — 2,031, up compared to 1,885 in Jan.-June 2011
Benton — 1,811, up compared to 1,766 in Jan.-June 2011
Washington — 1,104, down compared to 1,111 in Jan.-June 2011
Saline — 637, up compared to 621 in Jan.-June 2011
Craighead — 619, down compared to 705 in Jan.-June 2011
Link here for a PDF document of the June 2012 data.
• Northwest Arkansas
Vickie Briolat, broker with Crye-Leike Real Estate in Bentonville, said a warmer winter and spring helped to get buyers out a little earlier than normal which equated to bigger paychecks for agents to start 2012.
Since then, she said buyers have thinned some, but homes are selling quicker than in past years.
“We are seeing some multiple offers, better appraisal numbers and it feels good to see this market moving again,” Briolat said.
Paul Bynum, market analyst with MountData, said residential fundamentals are improving. He said inventories are down to their lowest levels in five years. In the two-county region there was a 7.7 month supply of homes on the market at the end of June.
George Faucette, CEO of the local Coldwell Banker franchise, said new home sales are up substantially, over $40 million for the first 6 months, year-over-year. New homes carry a higher price per-square-foot than existing homes listed for sale.
Pakko said regional home sales were “weak” during June.
“For Example, Benton county was down 14.1% and Washington County was up only 0.9%. However, both of these counties had very strong sales in June of 2011. For both the June and year-to-date figures, sales in Benton and Washington counties are running ahead of their 2010 rates. The northwest was harder-hit by the housing market downturn, and have been slower to recover. They seemed to be doing better in 2010, but progress appears to have slowed,” Pakko said.
• Fort Smith region
Kevin King, broker with Weichert King Realtors in Fort Smith, said his firm has seen more folks moving into the city from the outskirts of town this year. He said some look to downsize lots and upkeep as kids leave the nest and others are moving to larger homes that can accommodate aging parents with locations nearer medical facilities.
King said the Fort Smith market has been "remarkably stable" in light of the jobs lost this year, which has kept employment levels elevated.
The Bureau of Labor Statistics show the Fort Smith metro area’s unemployment rate stood at 7.7% in May, up from April, but lower than the 8.3% rate a year ago.
King said as jobs have evaporated in the Fort Smith market, property prices have remained fairly stable largely because foreclosures have not been a major problem in the past few years.
“We are seeing more short sales come to light, now that much of the foreclosure litigation has been worked through with the major lenders,” King said.
While short sales can have a negative impact on prices, King says they are a much better alternative to foreclosure for the seller and neighborhood values.
In a short sale the lender agrees to take less than what is it owed against the house. The seller is allowed to accept the contract and close the deal while still living in the home. After closing, the new buyer takes possession, which eliminates a home from being vacated and left empty for months — or years— at a time while a foreclosure is completed.
• Jonesboro area
Jonesboro Realtor Sherlyn Blackwell said low interest rates are inspiring people to get out and look at homes. The homes that are moving right now, she said, cost $250,000 or less.
Interest rates have hovered around historical lows this year and have remained at those levels throughout the summer. As of July 13, for example, the average interest rate on a 30-year, fixed mortgage was 3.74%. Throw in an urgency to move before the school year starts and you've got a situation in which buyers are less hesitant to commit to purchasing houses.
One problem that has been evident this year, she said, is that drought conditions and 100-degree temperatures have kept some prospective buyers indoors instead of outside looking for homes to purchase.
• Central Arkansas
John Pendleton, with Truman Ball & Associates, said Saline County sales are beginning to improve, but he is concerned about the impact that proposed changes of the United States Department of Agriculture Rural Development program could have on markets.
Under that program, 100% financing is available to people taking out mortgages in rural parts of the nation. Such “zero down” loans were fairly common a few years ago, but the decline of the subprime mortgage industry that started in earnest in 2007 wiped out the availability of many of those mortgages.
In Saline County, the USDA loans are available virtually everywhere except Benton. According to a memo from Doug Lawrence, the USDA Rural Development area director in Hope, the following Saline County towns may no longer be considered rural after Oct. 1: Alexander, Bryant, Hot Springs Village (in Saline and Garland counties), Salem and Shannon Hills. The USDA is considering guidelines changes that could impact the aforementioned cities in Saline Counties and towns throughout Arkansas.
Although the changes are in the proposal stage, Pendleton said area builders are pulling back on construction in anticipation of the new regulations that could be in place on Oct. 1. Pendleton said as much as 90% of transactions in which he is involved are backed by Rural Development loans.
“Every time we turn around and it seems like we're getting back on track – boom,” Pendleton said, explaining that a troubling thing about real estate over the past few years is that the coming recovery appears to be delayed often by major events that have major impacts on home buyers and sellers.