The residential housing market continues to mend with higher home prices, steady home sales and active builders breaking new ground at a faster pace than a year ago.
In Benton and Washington counties agents sold 592 homes in August, close to the 601 sold a year ago. But agents pocketed nearly 20% more money as sales volume rose to $107.118 million, compared to $90.262 million in the same month of last year, according to MountData.com.
Agents, brokers and lenders polled by The City Wire all rate the health of the Northwest Arkansas housing market about a 9 out of 10 through the first eight months of 2012, when comparing to last year.
That said, the sales activity is still a far cry from the non-sustainable records set in 2006. Comparing to the market height, insiders give an average score of 6.
“I see the activity today as a new normal that most could comfortably live with for some time,” said George Faucette, CEO of the local Coldwell Banker franchise.
Faucette said his firm — one of the largest with 165 agents — recorded a 24% increase in sales volume this year. He said July and August were strong months about $55 million in total volume for the firm. He remains optimistic that the housing market will continue to push the economy forward into 2013, providing a nice tailwind and reversing the headwinds felt since 2007.
Tami Fagan, an agent with Crye-Leike in Fayetteville, said she’s busy with sellers and buyers.
“I just got three new buyers under contract in the past few weeks, two were young professionals and first-time buyers. The other couple relocated to Fayetteville from Arizona with their two children. There seems to be plenty of buyers, good inventory and prices are coming up for sellers,” Fagan said.
She said the rental market is tight and some of her sellers have a lease option.
“The lease rates at $1,500 to $1,600 for a four bedroom are a good bit higher than the monthly cost of owning the home at today’s very low interest rates. But this gives the owners a nice spread if they can’t find the right buyer in the short term,” Fagan said.
Brian Dandy, also with Crye-Leike Realtors, said he had an interesting sale in recent weeks.
“I had one home go under contract in a day. I got a referral from Facebook and met the sellers, priced the home, listed it and it showed all in one night. The next day we received an offer and negotiated a contract by mid afternoon,” Dandy said.
He added the sellers were motivated to meet the market price and actually brought money to the closing table to accomplish a sale almost overnight, which was what they needed.
Harold Crye, CEO of Crye-Leike Real Estate, says his Northwest Arkansas offices were up 25% for the month of August and 40% for the year. The two-county area is recovering faster than some of the other regions across the south where Crye-Leike is also located.
Crye said August sales were up 16% across all regions versus August of 2011. For the period of January through August 2012, Crye-Leike offices are up 42% in sales volume across all regions, He said the firm has recorded higher year-over-year sales for the past eight months.
Paul Bynum, a market analyst with MountData.com, reports the local inventory stood at 3,597 listings at the end of August, down 21% from a year ago. He said inventory has dropped 50% since it peaked in summer of 2007.
New homes comprised 208 of the listings in August, down from 355 new homes on the market a year ago. Buildings permits are up about 40% from a year ago, but there is no surplus accumulating as new homes are selling well according to local banks fronting the construction loans and agents closing deals.
Historically new home sales make up about 10% of the total real estate sales, over the past three months that has increased to 12%.
In the first eight months of 2012 agents sold 4,102 homes valued at $707.325 million, up from $611.644 million in 2011. Unit sales rose only slightly by less than 1%.
Bynum says the real story across Northwest Arkansas is higher home prices. The median price in August hit a four-year high at $140,000, up 16.7% from a year ago. The average sales price per square foot totaled $81 last month and homes spent an average of 69 days from listing to pending, Bynum said.
He said the combination of much lower inventory levels are once again favoring sellers who have homes listed below $150,000.
Looking forward, Bynum said there were also 619 pending sales in August, compared to 573 a year ago. He said this is a leading indicator for strong September sales and continuing the upward trend that began back in January of this year.
Home Sales (January through August)
2012: 2,547 units, $450.452 million
2011: 2,483 units, $385.191 million
2010: 2,226 units, $366.509 million
2012: 1,555 units, $256.776 million
2011: 1,596 units, $226.861 million
2010: 1,437 units, $226.456 million
Median Sales Price (January through August)