Hawks’ View - Report on Central AR
July 15-21, 2024
By Spencer Hawks
No sooner than I had hit send on that last article did the report roll out that the market had slowed down. I felt this in real time with my own business too. A home that I had just listed and expected to go under contract that weekend failed to secure a buyer. The house was a gem and around $200,000. That said, a short week later the house landed a contract on it for the listing price without any seller concessions. This reminded me of a time when a group of real estate professionals from Faulkner County met at the Chamber of Commerce to discuss what could be done to continue facilitating growth in our housing market. This was on the onset of the rise in interest rates. A notable REALTOR exclaimed “I’ve had a house see thirty days of market exposure” almost in offense to the situation. I was glad to hear that sanity had returned and consideration existed again. Don’t be dismayed in Central Arkansas with a bleep in the national economy. My real estate classes learn that on micro and macro levels, the local economy is what matters most in real estate!
The Little Rock Metro Area and Van Buren County saw more than 1,000 residential units sell over the past month. Twelve of those units were over $1,000,000 and one of those over $2,000,000. While ten of the twelve were in Little Rock, congratulations to Amanda Elrod with Keller Williams for selling the two other homes over a million dollars which are in Saline County. Saline had a strong month coming in second with sales after Pulaski County, and Saline edged out Faulkner County by over ten transactions.
Aggressive still, homes are moving relatively quickly. So what does this slow down look like? Saline County sold 179 units this past month compared to 234 units in 2023. Faulkner County sold 167 units this past month compared to 193 in the year prior. Rising rates and continued inflation have made a difference in our market. The slower market has also allowed inventory to catch up with demand creating slightly longer exposure. The only price range that is doing better this year in the two aforementioned counties is the market above $500,000. Interestingly enough, Faulkner County had zero homes sell this past month for under $100,000. Last year they had nine sell in the same period. Saline County had seven compared to eleven in the previous year. Increasing home prices in these areas continues to erode certain lower priced options for housing.
I’m consistently looking at the deltas between the counties. It’s normal for Pulaski County to have north of 50% of the market for the region. Saline and Faulkner are typically pretty close to each other for a second and third. Lonoke County stays ahead of Van Buren County, but they’re often more in line with each other than any of the former three. Perry and Lincoln typically come in together with the smallest share. That is until you look at more affordable housing options.
For homes between $100,000 and $150,000 over the past month, while Pulaski County took the lion share at 65% of them, Lonoke County came in second with 9% of that market, and Saline and Faulkner came in third and fourth with 8% and 6%, Van Buren County came in right at 5%. The inventory of these homes simply does not exist in counties like Saline and Faulkner as they do in more rural counties or places with density like Little Rock and North Little Rock. Is affordability bound to the most dense and most rural areas in Central Arkansas? Rural Development loans are a huge aide, and the diversity of Pulaski County affords residents with more options than other counties can provide.
While the overall market is down from last year, and has been down, it still has life and a sense of vigor in certain portions. The market is a complex machine and reports that paint pictures of large regions involving many states overlook important local dynamics governing those markets. High interest rates and increasing insurance premiums aren’t the only issues. That buyers don’t have suitable options to purchase more affordable housing in two of our region’s largest markets is a massive issue. The numbers above only measure units sold, not demand if an adequate product existed for buyers in these areas.
Faulkner County is down ten units for the year, Pulaski is down 60, and Saline is only down six units year-to-date. The sky is not falling. As more housing options become available with longer market exposures and buyers are afforded more time to think before pulling the trigger on homeownership, minimal adjustments in our numbers will occur.
Just eleven hours ago Jerome Powell addressed Congress and said he’s finally able to look beyond issues of inflation. Eyes will remain on him over the next couple of months to see where rates will go. Hold onto your hats if those rates do move downward much, because we will be on a wild ride and those numbers in the last paragraph will take a totally different turn. It’s fun to speculate.
Spencer Hawks is an executive broker for Coldwell Banker RPM in Conway. Email him at hawksfamilyteam@gmail.com
