April continued a trend for Arkansas home sales of an increase in the number of homes sold in the state’s four largest metro markets but a dip in the average price per home sold and a dip in the total value of the home sold.
Home sales in Arkansas’ four largest metro areas during the first four months of 2014 totaled 6,078, up 3.84% compared to the same period in 2013, According to The City Wire’s Arkansas Home Sales Report. The average price per home sold in the four markets was $155,562, down 4.18% compared to the same period in 2013, and the total value of $945.505 million in the four markets was down 0.5%.
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, the 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. The report is sponsored by Fort Smith-based Weather Barr.
Northwest Arkansas was the only one of Arkansas’ four largest metro areas to post a decline in home sales and total sales amount during April.
However, it should be noted that the 2014 numbers are compared against what was a healthy Arkansas real estate market in 2013.
April home sales totaled 1,833, up 5.77% in the four markets compared to April 2013, and up 23.19% compared to April 2012. The average price per home in the four markets during April was $159,562, down 6.14% compared to April 2013, but up 0.37% compared to April 2012.
There were 898 homes sold in central Arkansas, up 11.55% compared to April 2013, and up 22.68% compared to April 2012.
April home sales totaled 575 in Northwest Arkansas, down 6.35% compared to April 2013, and up 19.29% compared to April 2012.
Jonesboro area home sales totaled 196, up 16.67% compared to April 2013 and up 41.01% compared to April 2012.
In the Fort Smith area, home sales totaled 164, up 12.33% compared to April 2013, and up 21.48% compared to April 2012.
The value of the sales during April were up 4.56% in central Arkansas, down 10.56% in Northwest Arkansas, up 8.41% in the Jonesboro area, and up 14.55% in the Fort Smith region.
THE REGIONAL PICTURE: 2014
Central Arkansas — Home sales
Jan.-April 2014: 2,884
Jan.-April 2013: 2,749
Jan.-April 2012: 2,483
Fort Smith area — Home sales
Jan.-April 2014: 552
Jan.-April 2013: 479
Jan.-April 2012: 481
Jonesboro area — Home sales
Jan.-April 2014: 640
Jan.-April 2013: 553
Jan.-April 2012: 499
Northwest Arkansas — Home sales
Jan.-April 2014: 2,002
Jan.-April 2013: 2,072
Jan.-April 2012: 1,745
The top five counties in terms of Jan.-April 2014 home sales:
Pulaski — 1,315, up compared to 1,250 in 2013
Benton — 1,281, down compared to 1,291 in 2013
Washington — 721, down compared to 781 in 2013
Craighead — 510, up compared to 436 in 2013
Saline — 497, up compared to 429 in 2013
Link here for a PDF document of the April 2014 data.
Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas, said the past few housing market reports have offered no surprises – the number of homes sold is increasing a bit, but prices are relatively flat.
She said there are a few reasons that prices have remained somewhat stagnant in some areas and have dropped in others. For one thing, rising interest rates have reduced the buying power of consumers and that is showing up in the prices they are willing to pay for homes. According to Mortgage-X.com, the average rate on a 30-year, fixed interest mortgage was 3.34% and had risen to 4.14% by mid-May this year.
Deck said a stubbornly consistent unemployment rate has also had an impact on homes sales. Arkansas’ unemployment rate in April was 6.6%, an improvement from 6.9% in March and the lowest unemployment rate in the Natural State since December 2008. Still, that rate is a far cry from historical averages in the Natural State which put the unemployment rate in the 5% range. Deck said high unemployment rates mean that people are less likely to take risks such as purchasing homes.
Another component, she said, is that the number of first time buyers hasn't increased as expected. A reason for that is recent graduates are having a tough time finding lucrative employment in tough job markets. At the same time, Deck said, graduates are dealing with higher student loan debt than in the past.
Deck said home price improvements will require positive changes in the labor market, adding that has been historically true of the economy in general – when people are working, economic growth takes place.
LARGER MARKET INSIGHTS
Northwest Arkansas real estate veteran George Faucette said April has been his firm's strongest month this year. He said sales were mixed during the past four months with January sales higher and February sales lower year-over-year. He also noted that new written business, while moving up nicely year to date, was down when compared to 2013. Faucette is the co-owner and CEO of the local Coldwell Banker franchise, which is the largest agency in the region with 17.13% of the market sales through April.
"Our sales have been really strong through the first half of May, but we are not quite on par with last year. I think by mid-summer the market will catch up with the better 2013 numbers. One of my agents in Rogers told me today she has already sold more homes this year than she did in all of 2013. Some agents are doing quite well in this market," Faucette said.
Harold Crye, CEO of Crye-Leike Real Estate, said his firm’s NWA home sales totaled $38.5 million during April, compared to $37.4 million a year ago. Through the first four months of 2014, Crye said his NWA agents have sold 745 properties valued at $112 million. This gives the firm roughly a 11.5% market share in terms of units sold.
Denise Hyde, with Old South Realty in Benton, said home buyers have higher interest rates and tougher lending requirements to contend with in today's market. Hyde said she spends more time than she did in the past helping buyers go from the contract stage to the closing stage. Because of the so-called credit crisis that took place in the latter part of the 2000s, Hyde said requirements are tougher, more paperwork must be filed and other measures are in place that reduce risky loans but make it hard for buyers to get a loan.
Still, Hyde said sales have improved in central Arkansas, and the housing market is improving, but at a slower late than many would have guessed, she said.