Editor’s note: This is the August 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.
August home sales in Arkansas’ largest metro areas were down more than 8%, and marked three consecutive months of declining home sales in key urban areas of the state.
Northwest Arkansas, where home sales have remained resilient, couldn’t escape the downward pull. August home sales there totaled 572, down 4.8% compared to August 2011.
The overall poor economy, declining consumer confidence and stricter lending controls are blamed for the decline.
There were 1,672 homes sold during August in the four large market areas measured by the The City Wire’s Arkansas Home Sales Report, down 8.93% compared to August 2011, but up 17% compared to August 2010.
Despite the decline in home sale numbers, the value of home sales continues to rise. Combined home sale values in the four markets totaled $289.15 million in August, up 7.6% compared to August 2011 and up an impressive 28.95% compared to August 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 eight months of the year, home sales in the four markets totaled 12,238, up just 0.13% compared to the same period in 2011, and down 1.58% compared to the same period in 2010. Between January and June 2012, the number of homes sold in the four market areas were up 2.19% compared to the 2011 period.
Home sale values during the first eight months total $1.989 billion, up 10.15% compared to the same period in 2011, and up 4.97% compared to the 2010 period.
REGIONAL FIGURES (Year-to-date)
Central Arkansas — Home sales
Jan.-Aug. 2012: 5,894
Jan.-Aug. 2011: 5,752
Jan.-Aug. 2010: 6,314
Fort Smith area — Home sales
Jan.-Aug. 2012: 1,081
Jan.-Aug. 2011: 1,159
Jan.-Aug. 2010: 1,218
Jonesboro area — Home sales
Jan.-Aug. 2012: 1,161
Jan.-Aug. 2011: 1,232
Jan.-Aug. 2010: 1,240
Northwest Arkansas — Home sales
Jan.-Aug. 2012: 4,102
Jan.-Aug. 2011: 4,079
Jan.-Aug. 2010: 3,663
The top five counties in terms of Jan.-Aug. 2012 home sales:
Pulaski — 2,795, up compared to 2,658 in Jan.-Aug. 2011
Benton — 2,547, up compared to 2,483 in Jan.-Aug. 2011
Washington — 1,555, down compared to 1,596 in Jan.-Aug. 2011
Craighead — 898, down compared to 1,010 in Jan.-Aug. 2011
Saline — 894, down compared to 913 in Jan.-Aug. 2011
Link here for a PDF document of the August 2012 data.
Michael Pakko, University of Arkansas Institute for Economic Advance chief economist and state economic forecaster, said a fundamental problem with a recovering housing market has to do with the overall economy. Pakko, speaking at a meeting of the Benton-Bryant Realtors Association on Sept. 19, said the recession ended in 2009 but “it doesn’t feel like it.”
He said the nation is gripped in what some economists call a jobless recovery – gross domestic product (GDP) has increased, but unemployment remains high. In Arkansas, Pakko said unemployment rates slowly recovered since hitting a low in 2008. The unemployment rate in August was 7.3%, down from 8.1% in August 2011, but a far cry from the decade low of 4.9% in May 2008.
Pakko said people who aren’t working or don’t feel secure in their jobs tend to not buy houses. He said housing markets in Arkansas – and nationally – have reflected that uncertainty and have not recovered as quickly as hoped.
The good news, Pakko said, is that home prices improved in 2012 and residential building permits through August totaled around 3,000 – the highest number issued since 2008.
• Northwest Arkansas
Northwest Arkansas (Benton and Washington counties) had 578 home sales in August, down 4.83% compared to August 2011. The value of the homes sold was $107.119 million, up 18.68% compared to August 2011.
For the first eight months of 2012, Northwest Arkansas area home sales total 4,102, up 0.56% compared to 2011. The value of homes sold in the first eight months is $707.229 million, up 15.5% compared to the same period in 2011.
George Faucette, CEO of the local Coldwell Banker franchise, 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 with 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.
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.
• Fort Smith region
August home sales in the Fort Smith region (Crawford and Sebastian counties) totaled 152, down 15.56% compared to August 2011. The value of the homes sold was $20.208 million, down 17.29% compared to August 2011. The Fort Smith region was the only one of the four market areas in which a decline was recorded in the number and value of homes sold during August.
For the first eight months of 2012, Fort Smith regional home sales total 1,081, down 6.73% compared to 2011. The value of homes sold in the first eight months is $140.708 million, down 2.08% compared to the same period in 2011. The Fort Smith region was the only one of the four market areas in which a decline was recorded in the number and value of homes sold during the first eight months of 2012 compared to the same period in 2011.
Economists say the loss of jobs in the region has likely had a dampening effect on broad demand, which is often driven by the lack of solid employment prospects that would also draw new residents to the area.
Not all Realtors or home builders are suffering from the volume and sales decline. Paul Walker, developer and builder at Cisterna Villlas located at Chaffee Crossing, said his development is about 12 months from total build out thanks to better sales this year than in the previous two years since the construction began.
“We started with 87 lots and are down to the last 21. Sales have accelerated this year for our custom homes as more folks are looking for no-maintenance lots in this unique residential setting,” Walker said.
• Jonesboro area
The Jonesboro area (Craighead and Greene counties) had 168 home sales in August, down 16.42% compared to August 2011. The value of the homes sold was $23.436 million, up 2.71% compared to August 2011.
For the first eight months of 2012, Jonesboro area home sales total 1,161, down 5.76% compared to 2011. The value of homes sold in the first eight months is $154.31 million, up 2.47% compared to the same period in 2011.
Jonesboro Realtor Brenda Dacus, with Fred Dacus Associates, has had some problems with closings being delayed at the last minute because of stricter lending requirements often caused by new federal regulations.
“This is the first year I’ve had major closing issues,” she said.
Her advice? Borrowers need to be aware that lending requirements are subject to change. Even those buyers that are pre-approved for loans should keep in touch with their lenders and make sure to disclose as much information as they can about their financial profiles.
• Central Arkansas
The Central Arkansas area (Faulkner, Grant, Hot Spring, Jefferson, Lonoke, Pulaski, Saline and White counties) had 780 home sales in August, down 8.67% compared to August 2011. The value of the homes sold was $138.385 million, up 5.46% compared to August 2011.
For the first eight months of 2012, Central Arkansas area home sales total 5,894, up 2.47% compared to 2011. The value of homes sold in the first eight months is $987.67 million, up 7.07% compared to the same period in 2011.
Like Dacus in Jonesboro, Denise Hyde, a Realtor with Old South Realty in Benton, said she’s noticed that more closings have been delayed at the last minute. At times, those new requirements have prevented deals from closing, Hyde said.
She said several closings scheduled for August were delayed at the last minute as buyers were required to produce more documentation or problems surfaced in their loans – a frustrating situation for both buyers and sellers.