State Home Sales Return to Pre-Recession Levels

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by Sarah Campbell-Miller, Arkansas Business

The Arkansas Realtors Association said Arkansas home sales in June weighed in at 3,542 — ahead of the 3,493 sold in June 2006, before the recession rocked the national residential real estate market.

Saline County, where sales increased by 45 percent year-over-year to 261, saw the most growth. Pulaski County sales grew by 5.7 percent, to 560. Benton and Washington counties saw sales fall by 6.5 percent and 7.6 percent, respectively. Sebastian County sales grew by 1 percent year-over-year.

Statewide, 96 more homes have been sold in the first six months of 2017 than in the first six months of 2016, and those homes cost an average of $7,907 more.

Arkansas Realtors Association President Maurice Taylor said June’s “strong” numbers could be attributed to the peak of the selling season, which begins in March, and buyers being motivated by rising interest rates.

“Any time you raise interest rates, it kind of sparks market activity because buyers are a little afraid that they’re going to be able to buy a little less if rates continue to rise,” he said. “I think when rates started to rise, it gave buyers a sense of urgency to, ‘If we’re going to be buy, we better buy.’ For sellers, if they want to get their houses sold and buy something else, now is the time to get it on the market and get it sold so they can move to the next property.”

Taylor also said low unemployment is contributing to the boom. He said the association hopes strong sales will continue, though the ARA expects some dropoff, which is typical during the holidays.

Michael Pakko, chief economist and state economic forecaster with the University of Arkansas at Little Rock’s Arkansas Economic Development Institute, said the housing market is one of the earliest indicators of economic recovery.

“We’ve had close to double-digit growth for the past three years and so, to see year-over-year changes of 5 to 6 percent continuing this year is pretty good news,” he said.

Pakko noted slow growth in some areas — namely Benton and Washington counties in northwest Arkansas, which had already seen big rebounds. The but Craighead and Sebastian counties are making up for that slower growth, he said.

“It is continuing to be a pretty good environment with low interest rates, and there may be actually some incentive to buy now before interest rates start heading up further,” Pakko said.

Average prices increased year-over-year in four of the top five markets, dropping only in Benton County, by 1.2 percent. The rest experienced gains ranging from 3.4 to 14.8 percent. Statewide, the average price of $184,387 was 2.8 percent higher than in June 2016.

Pakko said the housing market could be tightening and helping boost prices.

Sarah Rector of iRealty Arkansas agreed that inventory is low. She said homes on the market that are listed at a good price and in a decent location sell quickly.

“I would say that [the market] has definitely had a huge turnaround,” Rector said. “We have a lot of multiple-offer situations now and we haven’t had that in several years.”

iRealty has offices in Saline and Pulaski counties, and Rector said both are doing well, though her firm is selling more homes in Little Rock. She said prices are the highest she’d ever seen them, with people spending $375,000 on properties with houses they plan to tear down instead of $150,000-$200,000 for a lot or property with a tear-down house.

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TAGGED: Michael Pakko, Sarah Rector, Arkansas Realtors Association, Maurice Taylor

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