Editorial
Front Page - Monday, April 13, 2009
Central Arkansas average sales price holds up in February
Ethan C. Nobles
Special to the Daily Record ecnobles@att.net
The February housing market report has been released by the Arkansas Realtors Association and real estate agents in central Arkansas are cautiously optimistic.
“The numbers are encouraging,” said Arkansas Realtors Association President and Cabot Realtor Bob Walker.
The average price in February for new and existing, single-family residences sold by Realtors in Arkansas was $141,349, down 3.5 percent from $146,487 in February 2008. While Walker acknowledged he’d like to see that average improve, the February average marked the first time since June that the average sales price did not decline from the previous month.
In the Little Rock-North Little Rock-Conway Metropolitan Statistical Area, average prices took a sharp upturn in February. The average sales price in February in that area was $163,157 up 3.2 percent over an average of $158,117 in the same month last year and higher than the statewide average of $141,349.
The central Arkansas price gained compared to last year while the statewide average of $141,349 was down 3.5 percent from $146,487 in February 2008.
The Little Rock-North Little Rock-Conway MSA is defined as the central Arkansas counties of Faulkner, Grant, Lonoke, Perry, Pulaski and Saline. That area, historically, has posted average sales prices higher than state averages.
Walker said he is encouraged by recent activity in Lonoke County, where he reported sellers were realizing around 98 percent of their list prices. In February, the average sales price in Lonoke County of $141,694 was up 2.6 percent over an average of $138,446 in February 2008. For the first two months of 2009, the average sales price was $133,532, up 3.4 percent over $129,151 through February 2008.
“I look at that as a positive sign in our market,” Walker said.
The number of homes sold was down in February in almost all markets. Through February, 2,652 homes were sold in the first two months of 2009, down 24.7 percent from 3,521 homes through February 2008.
Walker said he’s encouraged by increase interest in purchasing homes, brought on by what he describes as potential buyers paying attention to downward pressure on list prices, the $8,000 tax credit for first-time homebuyers and mortgage rates at an historic low.
The $8,000 tax credit is for all first-time homebuyers who haven’t owned a principal residence in the past three years and who purchase a home from Jan. 1 through Nov. 30. The tax credit is a refund from the IRS that can be filed on either the 2008 or 2009 tax return.
As for interest rates, Walker said he’s seen a buyer take out mortgages with rates as low as 4.875 percent. Low interest rates and the tax credit have generated some enthusiasm, and Walker said another reason people are inquiring about purchasing homes has to do with the notion that the public is catching on to the idea that Arkansas markets are faring well compared to those in some other areas.
“They’re getting more confidence based on what they’re hearing in the media,” he said. “People are starting to understand that we’re not California, Florida, Nevada or other places. That message is coming across. We’ve worked hard to get it out.”
Still, Walker said some people transferring from other states are a bit baffled by the Arkansas housing market. He said it’s not uncommon to see people transferring to Arkansas making offers on homes that are 30 to 40 percent below list prices, but homeowners aren’t accepting them.
That, he said, reveals that homeowners in Arkansas aren’t desperate and that’s a good sign.
The question, of course, is whether the increased interest from potential buyers will actually result in more sales. Walker said he hopes so and pointed out that the March numbers will tell the tale of whether people are buying more homes or not.
He said one encouraging sign is that housing starts have been down the past three months and new homes that have been sitting on the market have been disappearing from inventory. That situation, he said, will only help owners of existing homes, which have been competing with new houses often listed at very attractive prices by builders liquidating inventories and banks that have repossessed new homes and are trying to sell them quickly.
“There was an inordinate amount of new construction during the boom (from 1999 through 2006),” Walker said. “Everyone got stuck with a lot of new construction they couldn’t sell. … That inventory is being sold off.
“I hope we’ve learned our lessons and we don’t get stuck in that situation again.”
Ultimately, Walker said home sales will increase as the economy improves.
“We’re part of the overall economy,” he said of people working in the real estate industry. “When the economy is rolling, things will be better.”
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