NWA home sales decline slightly through April; prices continue to rise
Year-to-date home sales in the first four months of the year in Northwest Arkansas are showing signs of stabilizing after a scorching 2020.
Realtors have combined to sell 3,312 residential properties in Benton and Washington counties through April. This is according to the data of the Matrix software platform used by the Northwest Arkansas Real Estate Council (NABOR) and provided to Northwest Arkansas Business Journal by Marcus Necessaire, Vice President and Executive Broker at Weichert, Realtors-The Griffin Co.
According to the data, these numbers represent a slight decrease (0.8%) from the 3,340 home sales of the previous year.
Despite the COVID-19 pandemic and all its challenges, Northwest Arkansas home sales in 2020 increased throughout the year and closed nearly 13% from the comparable figure of 2019, or more than double the growth rate of the previous year.
Against the backdrop of continued inventory tightening, home prices continue to soar. This year’s combined sales volume through April is up 14.2% – $ 981.7 million in the first four months of this year, compared to $ 866.7 million in the first four months from 2020.
In Benton County, the average home sale through April was worth an average of $ 304,505, up 13.3% from $ 268,505 in the same four-month period of 2020 In Washington County, the average selling price of a home through March was $ 280,344, up 10.3% from $ 243,464 last year.
Benton County reported 638 home sales worth a total of $ 189.9 million in April. This compares to $ 615 million and $ 176.7 million last month. In Washington County, agents sold 323 homes in April – up from 307 last year – for a cumulative value of $ 90.1 million, up from $ 76.3 million.
From a national perspective, a report released on May 11 by the National Association of Realtors on nearly every metropolitan area it tracks – 99% – recorded year-over-year price increases. in the first quarter of 2021.
“The significant price increases across the country simply illustrate strong demand and record housing supply,” Lawrence Yun, chief economist of the National Association of Realtors, said in a statement. “Record-breaking home prices are occurring in almost every market, large and small, even in subways that have long been considered off the radar in previous years for many home enthusiasts.”
Stuart Collier, the principal broker of Collier & Associates Real Estate, which has offices in Fayetteville, Farmington and Bentonville, said the Northwest Arkansas market is in line with national trends. He described it as a “price appreciation trifecta” made up of low interest rates, low supply and increased construction costs.
“I think we’ll continue to see gradual appreciation in prices until interest rates rise and a significant amount of inventory hits the market,” Collier said. “The number of homes sold may remain stable, but prices will continue to rise due to lack of inventory and low prices.”
Collier also said buyers without large cash reserves were struggling.
“Many times the contingencies associated with the assessment are canceled, with buyers covering the difference in cash or offering full cash offers,” he explained. “It affects first-time buyers and young buyers who are competing with investors and others with a larger cash reserve, which is what it takes to win in this market while competing against multiple offers.
“I don’t expect that to change for the rest of the year. It will take time to raise prices and a long time for new inventory to meet demand. “
Misty McMullen, Senior Broker and Owner of McMullen Real Estate Group, which has offices in Bentonville and Rogers, said home prices would likely continue to rise until inventory catches up, whether it’s resale or new construction.
“I recently read a survey of economists and when they expect inventories to rise again, and the consensus was from the second half of this year to the first quarter of next year,” he said. she declared. “It’s pretty consistent with what I’m going through with my new builders.”
McMullen, whose company ended 2020 with a residential sales volume of nearly $ 90 million, also reported a surge in out-of-state buyers, particularly from California.
“With many people now working from home in the post-pandemic world, this has made it possible for many to live in more economical parts of the country and work remotely,” she said. “I expect this to continue for the foreseeable future.”
Lynn Smith, regional loan manager for the Arkansas market for Bank of America, also highlighted the lack of inventory as a critical issue in the market.
“We have a large population of first and second home buyers, and homeownership is really important to them,” she said. “According to Bank of America’s Latest Homebuyers Report, nearly half (46%) of respondents say that building equity is more important than ever. In a competitive market like our region, where you may be competing with all-cash offers, getting pre-approved for a home loan as early as possible, ideally before you begin your search, is essential. Pre-approval shows that you really want to own a home and take the necessary steps to have your finances and credit checked by a lender. “
Smith also pointed to Bank of America research indicating that people are reassessing how their living space and environment fits into their lives when they spend more time at home.
“The human connection, a sense of community and good neighbors are just some of the top priorities for today’s shopper,” she said. “The younger generations are looking for a multifunctional space because the house has become an office (45%), a school (31%), a cinema (28%) and a gym (27%).”