Editorial
Front Page - Monday, December 14, 2009
October homes sales up for central Arkansas, state
Ethan C. Nobles
For only the third time in 45 months, the Arkansas Realtors Association (ARA) released a housing market report showing sales growth compared to a comparable month in the previous year.
In October, there were 2,332 single-family, new and existing homes sold by Realtors throughout the state – up 24.11 percent over 1,879 sales in the same month last year. In central Arkansas, there were 814 sales – up 35.22 percent over 602 homes sold in October 2008.
Sales gains were also reported this year in September and July. The six counties in central Arkansas are Faulkner, Grant, Lonoke, Perry, Pulaski and Saline.
While sales were up, average sales prices slipped in October. The statewide average sales price throughout the state was $139,139 – down from $143,476 in the same month last year.
In central Arkansas, the average sales price in October was $152,067 – down 1 percent from $153,606 a year ago. Statewide average sales prices have fallen this year. Through October, the average sales price in Arkansas was $144,476 – down 4.1 percent from $150,650 though the first 10 months of 2008.
Cabot Realtor and ARA President Bob Walker said the first-time home buyer tax credit had a lot to do with both increased sales and slipping average prices in October. At the first of November, Congress extended the deadline for the first-time home buyer tax of up to $8,000 credit to April 30 and expanded the credit so that existing homeowners can claim up to $6,500.
Prior to that announcement, real estate agents and buyers operated under the assumption that the tax credit was to expire on Nov. 30. Because it generally takes up to 30 days to close on a home, people spent September and October buying homes so they could close in time to claim the credit.
Under the extended and expanded tax credit, buyers must get a house under contract by April 30 and close on it within 60 days. Walker said there was speculation in September and October that the tax credit might be expanded but the final word on the new credit didn’t come down until early in October. Buyers, then, acted accordingly, Walker said.
In addition to purchasing more homes, Walker said first-time home buyers generally focused on houses costing around $150,000 or less. Since more homes were sold for less money in October, the average sales price fell.
Looking ahead, Walker said he hopes the tax credit for existing home owners helps move some more expensive homes in inventory. He pointed out that lower priced homes have moved well all year long, thanks in part of the first-time home buyer tax credit.
The challenge for Realtors, he said, is to get the word out about the tax credit for existing home owners. Since that credit is so new, Walker said a lot of buyers are just now finding out about it. He added they don’t have long to take advantage of it – it expires at the end of April and that’s not a lot of time to educate prospective buyers about something that could benefit them.
Meanwhile, 2010 ARA President and Fayetteville Realtor Mike Henry said the tax credit has helped sales in northwest Arkansas and he hopes to see that trend continue in the part of the state that was hit the hardest when markets started to slump. Through October, there were 4,748 homes sold in Benton and Washington counties – up 1.95 percent over 4,657 sales through the first 10 months of 2008.
Henry pointed out that tax credits are the only thing moving sales. List prices have dropped and interest rates have frequently dipped below 5 percent for a 30-year, fixed rate mortgage this year. He said market conditions favor buyers even without a tax credit.
When you add that tax credit to the incentives buyers have to purchase homes, the result has been an improvement in sales throughout the state.
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