story by Kim Souza
ksouza@thecitywire.com
It’s been seven years since the local real estate market has favored sellers to the extent seen last month as buyer demand outpaced inventory levels, according to industry analyst Paul Bynum with MountData.com.
MountData reports April home sales rose 37% in Benton County as agents sold 369 homes last month valued at $69.89 million. The median sales price rose $160,525, up 22% for average of $84 per square foot.
Washington County also posted strong numbers in April with total sales of $41.934 million, up 34% from the same month in 2012. Agents sold 218 homes, compared to 180 in the year-ago period. The median sales price of $157,500 rose 6.5% from last year.
Bynum said there was 3,337 homes listed for sale in the two counties. While the total inventory was up 10% from the prior month, there was still ample buyer demand for homes priced under $150,000.
He said there is 4- to 5-month supply of homes in this affordable price category, which is deemed a seller's market. Homes selling last month were on the market an average of 61 days, a full week shorter than in the previous month.
“Our April sales rose 58% in volume over last year and our agents closed deals on 36% more homes compared to April 2012. It was our best April in a long, long time,” said George Faucette, CEO of the local Coldwell Banker franchise. (These stats take into account Coldwell Banker has recently added 20 agents with the merger of Century 21 Exclamation Realty.)
Like Bynum, Faucette said the lower levels of inventory is helping to drive prices higher given more buyers are taking advantage of low interest rates – averaging 3.4% last month.
Donna Schoby, mortgage loan officer at Liberty Bank, said mortgage rates rose last week, the average 30-year fixed rate increased from 3.35% to 3.42% with buyers paying all closing costs and 0.7% in discount points.
Agents agree rates below 4% go along way in making homes affordable if buyers can qualify with a minimum 640 credit score.
Harold Crye, CEO of Crye-Leike Realty, said his firm’s NWA business was up 58% last month with $37.4 million in total sales. His agents closed deals on 230 homes, up 36% from the same month last year. Together Crye-Leike and Coldwell Banker comprise a lion’s share of the total market.
HIGHER PRICING
Home prices continue to recover in the two-county area with a median price point of $147,000 for the first four months of this year. This is up $12,500 or 9.2% from the same period last year.
Agents say as prices recover at these healthy clips there can be issues with appraisals as they will lag several months behind any real time data.
Connie Turner, an agent with Coldwell Banker, said recently she had two instances where homes went under contract for a certain price, but failed to appraise at that same level, which meant the sellers had to reduce the asking price.
“It’s frustrating when you take a contract to a seller for full asking price and then they have to take less because of conservative appraisals based on older data,” Turner said.
Faucette said it’s not uncommon to see this during a time when prices are rising after years of flat or declining values.
“Appraisers have to work off of historical data, past sales, they can not take into account current demand. We had a small home on the edge of the Fayetteville’s historical district that we listed for $97,500 which we thought was aggressively priced. It sold in two days. Three people wanted it and bid it up to $110,000,” Faucette said.
He said the deal went through because it was cash, and the appraisal was not tied to any financing which is typically the case for the majority of homeowners.
BIGGER PICTURE
For the full four months of this year agents in the two counties sold 2,009 homes with a value of $356.05 million, up 26% from the same period in 2012, according to MountData.com. Bynum said the local market is shaping up to be a strong year for growth as inventories are expected to increase through the summer selling season as is buyer demand.
Faucette his firm’s sales are up 49% through April, when compared the year ago period. He adds that pending sales in May are also very strong which favor a good report next month as well.
Bynum said across the two counties there were 718 pending sales at the end of April, up from 581 pending transactions in the year-ago period.
Crye said his firm overall is on track to top $5 billion this year with one-third of the year already in the books. Through April, Crye said his firm has posted $1.41 billion in total sales in its combined markets across nine Southern states. Total volume rose 19% while the number of homes sold increased by 12% from a year ago.
“I do expect price increases to moderate some as inventory picks up in the next few months, but I can not think of any real negative pull on the local market at this time,” Faucette said.
Consumer confidence remains somewhat tepid, with two major indices split, during the month of April, according to Bynum’s report.
He notes the local unemployment rate of 5.5% is considerably lower than the national average.
Local economic leaders have said Northwest Arkansas continues to see a stream of newcomers to the region – an average of 30 day – which will push the metropolitan area population above 500,000 by mid 2014. These newcomers have to live somewhere, which means continued opportunity for those selling and renting homes.
HOME SALES (January through April)
Benton County
Sales Volume
2013: $226.146 million
2012: $182.380 million
23.99%
Units Sold
2013: 1,256
2012: 1,090
15.22%
Median Sales Price
2013: $148,500
2012: $134,500
10.4%
Washington County
Sales Volume
2013: $129.495 million
2012: $102.654 million
26.14%
Units Sold
2013: 753
2012: 653
15.31%
Median Sales Price
2013: $145,000
2012: $134,950
7.44%