story by Ryan Saylor
rsaylor@thecitywire.com
January home sales in Crawford and Sebastian Counties posted increases from the same period last year, with both counties posting values more than 40% higher in January 2014 than in January 2013.
Crawford County saw an increase in home sales volume from $2.711 million on 27 homes in January 2013 to $3.89 million on 38 homes in January 2014. That helped the county post a 43.5% increase in volume.
Sebastian County posted a 44.63% increase last month, going from $6.346 million on 52 homes in January 2013 to $9.179 million on 74 homes in January 2014.
According to Owner/Broker Kevin Clifton of Kevin Clifton Real Estate in Van Buren, the driving force in Crawford County home sales was the possible loss of the Rural Development Loan offered by the United States Department of Agriculture.
"We were initially up against a deadline for Rural Development loans to be finalized. It was set to expire (if the Farm Bill was not renewed by Congress)," he said. "A great number of people buying in that time only had 30 days (to get rural development loans in process)."
As a result of what appeared at the time to be a probable loss of the loans, nearly 80% of the 38 homes sold in Crawford County were sold in the city of Van Buren.
Besides Van Buren driving sales, the crunch on buyers getting approved for the loans before they were set to expire may have also driven up home prices, Clifton said. In Crawford County, average sale price on homes sold increased by 1.96%, while Sebastian County only increased 1.63%.
Clifton said the market was simply responding to supply and demand.
"On average, the homes in Crawford County are approximately $3 to $4 per square foot higher in asking price then they were this time last year," he said. "So the sale price typically follows suit with the asking price. The bulk of that is supply and demand. The amount of homes now versus last year plays into that final sale price. If there's less homes to choose from, then the sale price can be a little more."
While the year is off to a good start in both counties, Clifton warned that surprises may be around the corner and it has to do with rules on mortgages. For borrowers who do not put 20% down on a mortgage, the government requires the purchase of mortgage insurance, also known as PMI (a mortgage insurance premium). Clifton said the cost of PMI could impact home sales throughout the rest of this year, potentially taking some buyers out of the market, at least for the short term.
"The FHA (Federal Housing Administration) requirements bump the consumer's payment so much higher (with PMI)," Clifton said. "They may want to wait a little longer and save more down, but the payments will be cheaper on the life of the loan."
As a result, "that particular market may not see as much of an increase in sales as the Rural Development loans, if the buyer that can qualify for the rural development loan."
HOME SALES DATA
• Crawford County
Unit Sales
January 2014: 38
January 2013: 27
Total Sales Volume
January 2014: $3.89 million
January 2013: $2.711 million
Median Sales Price
January 2014: $89,500
January 2013: $89,500
• Sebastian County
Unit Sales
January 2014: 74
January 2013: 52
Total Sales Volume
January 2014: $9.179 million
January 2013: $6.346 million
Media Sales Price
January 2014: $112,000
January 2013: $114,900