Of home sales in Arkansas’ four largest metro markets, the Fort Smith region is the surprise leader with the best percentage growth for the first five months of the year. And although the Northwest Arkansas market is below the red hot pace of 2013, the four markets combined are up almost 4% against what was a robust market for home sales in 2013.
Home sales in Arkansas’ four largest metro areas during the first five months of 2014 totaled 8,148, up 3.97% 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 $159,251, down 3.24% compared to the same period in 2013, and the total sales value of $1.297 billion in the four markets was up just 0.6%.
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.
May home sales totaled 2,028, up 3.52% in the four markets compared to May 2013, and up 14.84% compared to May 2012. The average price per home in the four markets during May was $169,844, down 0.69% compared to May 2013, but up 4.79% compared to May 2012. The total value of homes sold in the four markets during May was $344.443 million, up 2.81% compared to May 2013 and up 20.33% compared to May 2012.
There were 968 homes sold in central Arkansas, up 8.76% compared to May 2013, and up 14.42% compared to May 2012. The value of the sales in May were up 5.21% compared to May 2013.
May home sales totaled 698 in Northwest Arkansas, down 8.99% compared to May 2013, and up 6.58% compared to May 2012. The value of the sales in May were down 3.51% compared to May 2013.
Jonesboro area home sales totaled 218, up 8.46% compared to May 2013 and up 31.33% compared to May 2012. The value of the sales in May were up 16.47% compared to May 2013.
In the Fort Smith area, home sales totaled 194, up 24.36% compared to May 2013, and up 32.88% compared to May 2012. The value of the sales in May were up 7.11% compared to May 2013.
Randy Miller, executive broker at J.E. Jones Real Estate in Van Buren, said he is not certain the large percentage gains in home sales in the Fort Smith area will continue through 2014.
"I don't think that you'll see a continued 10% (improvement in Sebastian County) each month. There's always a leveling we see in this market. We don't have big dips. It's always been gradual for us in this part of the country," Miller said. "I don't anticipate that it will be 10% for the next few months, but it would be exciting if that would happen."
THE REGIONAL PICTURE: January-May 2014
Central Arkansas — Home sales
Jan.-May 2014: 3,883
Jan.-May 2013: 3,662
Jan.-May 2012: 3,362
Fort Smith area — Home sales
Jan.-May 2014: 747
Jan.-May 2013: 635
Jan.-May 2012: 627
Jonesboro area — Home sales
Jan.-May 2014: 860
Jan.-May 2013: 756
Jan.-May 2012: 696
Northwest Arkansas — Home sales
Jan.-May 2014: 2,658
Jan.-May 2013: 2,784
Jan.-May 2012: 2,353
The top five counties in terms of Jan.-May 2014 home sales:
Pulaski — 1,817, up compared to 1,680 in 2013
Benton — 1,713, down compared to 1,736 in 2013
Washington — 935, down compared to 1,048 in 2013
Craighead — 688, up compared to 564 in 2013
Saline — 659, up compared to 606 in 2013
Link here for a PDF document of the May 2014 data.
Through the first five months of 2014, a trend has developed in the four areas covered in The Arkansas Home Sales Report – units sold are up and average sales prices are down.
The City Wire Economist Jeff Collins said one thing still weighing on home prices is the unemployment rate – 6.4% in May in Arkansas which was an improvement of 1% over the same month last year but still higher than historical norms.
That high unemployment rate has led to at least one good thing for potential home buyers – the Federal Reserve is still interested in keeping interest rates low to encourage people to purchase homes. That policy probably won't change until the labor market improves, Collins said.
Still, the average interest rate on a 30-year, fixed mortgage on June 20 was 4.2%, an increase from 3.93% a year ago. Higher interest rates – or at least the perception of them – mean consumers are under the impression they will have to buy more modest homes due to higher monthly mortgage prices. That is one of the reasons average prices have declined.
Collins said people do need to keep in mind that mortgage rates are still hovering around historical lows.
“People have short memories,” he said. “They don't recall getting money at higher rates.”
WATCHING NORTHWEST ARKANSAS
Colllins said summer is traditionally the best time for Realtors so he'll keep a close eye on how sales go in the summer before predicting any trends developing for the remainder of 2014. He said one area of the state he will watch is Northwest Arkansas.
An “amazing” amount of building activity has taken place in northwest Arkansas and Collins said some people are concerned there could be too many new subdivisions. The concern, he said, is that real estate developers have been getting ahead of the unemployment picture and, if true, could mean that area of the state could be dealing with an excess of inventory and the lower sales prices that result.
MountData.com analyst Paul Bynum, who gathers real estate data for the Northwest Arkansas and Fort Smith area markets, said the May decline in Northwest Arkansas is the result of a tough comparison with May 2013. Bynum said last year was one of the best on record in Northwest Arkansas and anything remotely close to those levels is good.
ASSOCIATED COMMERCIAL GROWTH
In central Arkansas, Realtor Mike Cottingham with Baxley-Penfield-Moudy in Bryant said there is increased building activity in Saline County but most of it is commercial. The commercial construction is due to growth in the county.
“We don't have a lot of new (residential) construction going on and that's helping existing home sales,” he said. “Existing homes are moving well and more people are wanting to buy.”
He said more commercial development is on the way and that shows confidence in the residential growth of the area. Saline County is still in need of some more employers, but Cottingham said hopes are high that more jobs will come with increased commercial activity in the area.
In Jonesboro, Executive Broker Sherlyn Blackwell of Fred Dacus Associates said she has certainly noticed an improvement in sales this year.
“If a person isn't making money at real estate these days, they're not trying,” she said. “We're hopping here. I'm not getting home until late every night. … It's very good here.”
She said most development in her area is also commercial and the majority of homes sold are existing ones.