story by Ryan Saylor
rsaylor@thecitywire.com
Editor’s note: This story is a component of The Compass Report. The quarterly Compass Report is managed by The City Wire, and sponsored by Arvest Bank. Supporting sponsors of The Compass Report are Cox Communications and the Fort Smith Regional Chamber of Commerce.
Home sales in the region were up double digits in October, the second month in a row that Crawford and Sebastian Counties posted such growth, more than doubling the growth rate both counties had posted in September.
In Crawford County, home sales were up 52.93% in October 2014 compared to the same month last year, while September saw an increase of 13.75% over the same period in 2013. Sebastian County posted even higher numbers coming in at 65.6% for October over the previous month. In September, Sebastian County's growth over August stood at 18.74%.
Looking at the sales volume, Crawford County posted $7.572 million in sales last month compared to $5.069 million in October 2013. Sebastian County saw sales of $21.581 million in October 2014 compared to $13.032 million in October 2013.
Kevin Clifton, owner and broker at Kevin Clifton Realty in Van Buren, said two factors were at play in the region. The first factor in Van Buren's favor was the expected expiration of the FDA's Rural Development Loan program in the city. He said the one year moratorium that lent the program an extra year of life did not stop sales already in motion. Thus Van Buren and Crawford County's real estate market were the direct beneficiaries, according to Clifton, with homeowners rushing to secure the no money down mortgages.
"When it was (a real possibility of losing the Rural Development Loans, there was) that scare factor, even in my office," he said. "We've closed 91 homes in the last six months just in my office. Of those, 41 of those were in the last month. For an office of five people, that's amazing to see the difference."
The second factor at play in Sebastian County's favor is development taking place in Chaffee Crossing which is expected to grow as ArcBest locates its new corporate headquarters on a site at the former U.S. Army installation.
"We have a bit of a better job force going now and there are a number of new construction versus used. It has been several years since it's been a choice for buyers for new construction in multiple areas and multiple price ranges (in Fort Smith)," he explained.
"There is the typical growth (helping Fort Smith) and then the new construction. When you have two or three new subdivisions in Sebastian County pushing new homes onto the market, especially comparing 2008 numbers to now, it's a night and day difference from where we were just a few years ago."
With the growth both markets have experienced, the average sale price in Crawford and Sebastian Counties increased substantially from last year to this year. In Crawford County, the average price in October 2013 was $112,641 while October 2014 saw $135,214, an increase of 20.04%. Sebastian County saw a rise from October 2013's average of $121,796 to an average of $172,648 in October 2014. The figure represents a rise in average sales price of 41.75%.
The new construction, Clifton said, helped drive Sebastian County's numbers higher while the rush to buy in Van Buren pushed Crawford County's numbers higher.
"Sales price numbers were up because of the number of homes on the market," he said, adding that the number of pending sales or under contract limited the supply.
As for next year, he said it is hard to tell what will happen in Sebastian County though he said Crawford County will see another rush at the end of the year as the Rural Development Loan's moratorium comes to a close and the fear of losing the loan altogether drives sales.
"I foresee us having that same situation happen. … You have a whole new set of buyers look at that time compared to where we are right now in this year. We will have that rush again just like this year and numbers for the last quarter of the year will be tied to the scare factor of losing Rural Development for Van Buren."
Of course, before agents get to the last quarter of next year, they have to make it through the typically slow winter months and the summer. But the winter months, he said, could create a slump agents will be working all year to get out of.
"The weather will play a big part in that first quarter for us," Clifton said. "Consumers just don't want to get out in that (cold, snow and ice). As long as the weather stays steady, we'll still have a good first quarter."
Home Sales Data (January - October)
• Crawford County
Unit Sales
2014: 525
2013: 422
Total Sales Volume
2014: $62.334 million
2013: $47.071 million
Median Sales Price
2014: $108,750
2013: $106,500
• Sebastian County
Unit Sales
2014: 1,161
2013: 1,055
Total Sales Volume
2014: $158.792 million
2013: $145.515 million
Median Sales Price
2014: $115,000
2013: $115,000