The pace of home sales in Arkansas’ four largest metro areas fell almost 5% in November but the sector is on track to end the year with a double-digit gain in homes sold compared to 2012.
During the first 11 months of 2013 the number of homes sold in the four markets totaled 18,732, up 10.74% compared to the 2012 period and up 12.63% compared to 2011, according to The City Wire’s Arkansas Home Sales Report. The report is sponsored by Fort Smith-based Weather Barr.
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. This report counts the number of sales closed between January and November.
The value of homes sold in the four markets during the first 11 months of 2013 was $3.121 billion, up 13.06% compared to the same period in 2012 and up more than 25% compared to the same period in 2011.
The average price of homes sold during the first 11 months in the four markets was $166,632, up 2.1% compared to the same period in 2012 and up 11.31% compared to the same period in 2011.
Homes are also selling faster. The average days on market so far in 2013 is 87.4, better than the 96.21 in 2012 and the 101.20 in 2011.
For the first 11 months of 2013, the number of homes sold in central Arkansas are up 6.35%, up 13.04% in the Jonesboro area, up 17.36% in Northwest Arkansas, and up 6.9% in the Fort Smith area.
Benton County had a narrow hold on the top Arkansas county for home sales in the first 11 months. The county, with a population of around 230,000, had 4,202 home sales between January and November. Pulaski County, with a population of around 390,000, posted 4,117 home sales in the same 11-month period.
Home sales activity and the average home price was down in all four markets during November. The average price per home in the four markets was $158,493, down 1.87% compared to November 2012. The average price was up 1.17% compared to November 2011.
There were 638 homes sold in central Arkansas, down 4.92% compared to November 2012, and up 2.41% compared to November 2011.
November home sales totaled 461 in Northwest Arkansas, down 4.55% compared to November 2012, and up 10.82% compared to November 2011.
Jonesboro area home sales totaled 152, down 1.3% compared to November 2012 and up 16.03% compared to November 2011.
In the Fort Smith area, home sales totaled 122, down 10.29% compared to November 2012, and down 15.28% compared to November 2011.
The value of the sales during November were down 8.74% in central Arkansas, down 5.2% in Northwest Arkansas, down 2.72% in the Jonesboro area, and down 5.35% in the Fort Smith region.
THE REGIONAL PICTURE
Central Arkansas — Home sales
Jan.-Nov. 2013: 8,631
Jan.-Nov. 2012: 8,116
Jan.-Nov. 2011: 7,994
Fort Smith area — Home sales
Jan.-Nov. 2013: 1,596
Jan.-Nov. 2012: 1,493
Jan.-Nov. 2011: 1,573
Jonesboro area — Home sales
Jan.-Nov. 2013: 1,838
Jan.-Nov. 2012: 1,626
Jan.-Nov. 2011: 1,628
Northwest Arkansas — Home sales
Jan.-Nov. 2013: 6,667
Jan.-Nov. 2012: 5,681
Jan.-Nov. 2011: 5,437
The top five counties in terms of Jan.-Nov. 2013 home sales:
Benton — 4,202, up compared to 3,566 in 2012
Pulaski — 4,117, up compared to 3,858 in 2012
Washington — 2,465, up compared to 2,115 in 2012
Craighead — 1,455, up compared to 1,264 in 2012
Saline — 1,415, up compared to 1,279 in 2012
Link here for a PDF document of the November 2013 data.
Bob Downum, principal broker with Weichert Realtors-Downum Group in Springdale, said interest rates, a government shutdown and shaky consumer confidence are all to blame for a slowdown in sales and a drop in prices he hopes are temporary.
“It alarms us ... but maybe this is temporary,” he said. “We’re all hoping (sales) come back. It’s just hard to read the tea leaves anymore.”
The November report reflects closed sales in November and a large number of those were under contract in October. One factor Downum mentioned was the government shutdown which started on Oct. 1 and ended on Oct. 16. During the government shutdown, programs such as the U.S. Department of Agriculture’s Rural Development which provide mortgages were unavailable or could only be had on a very limited basis.
The government shutdown – along with Patient Protection and Affordable Care Act (Obamacare) – put a damper on consumer confidence, Downum said. As for Obamacare, there is lingering confusing among consumers as to what impact that program will have on the overall economy when it goes in place next year.
Also, rising interest rates came into play. At the first of 2013, the average, fixed interest rate on a 30-year mortgage was 3.34% according to Mortgage-X.com. That rate had increased to 4.22% at the first October and had risen to 4.29% by the end of November.
As interest rates increase, it costs consumers more to borrow money and that means they generally settle for less expensive homes than when rates were low. The phenomenon, Downum said, played out in the November report when the average sales price was $158,493 – down 1.87% from $161,508 a year ago.
National mortgage professionals contacted by Mortgage-X.com don’t expect interest rates to drop anytime soon. In the Mortgage Rate Trend Survey released Dec. 15, 40.7% of about 250 mortgage experts contacted by Mortgage-X.com expect interest rates to increase slightly over the next 90 days while 37% believe they will remain unchanged.