Arkansas has been sparred the brunt of the worst of the nation’s real estate crisis, but as the national recessionary economy worsens Arkansas won’t be nearly as protected as it has been, despite not having a market that was as over heated as others.

The downturn in Arkansas has been mainly limited to fewer home sales so far as mortgages became harder and harder to get. Housing sales are far from reaching the bottom in most of the state, which is experiencing an increase in foreclosures. The weakness in the housing market is likely to continue right through 2009 in Arkansas, according to Housing Predictor analysts.

Growth in Little Rock has ebbed. Fewer new businesses are opening since it’s been tougher for businesses to get financing to buy inventory and open new stores. Little Rock had become a booming hub of the south, but with the recessionary economy times have changed as home sales slowed.

The price of a home increased five straight years in Little Rock until the market began to flatten. No longer protected by a growing economy, Little Rock is now faced with an uncertain economic future. Home sales are projected by Housing Predictor to slow further and Little Rock is forecast to see housing prices fall 6.4% in 2009.

In posh Hot Springs, which has more second homes than just about anywhere else in the state sales are at a near standstill, especially in the high-end market. Housing prices rose until the loose lending dried-up and the market slowed. Now an excess of inventory on the market has sent housing prices lower. Home prices are forecast to deflate an additional 7.9% in 2009.

Upstate in Jonesboro, the community saw many new subdivisions built during the boom, but as investors from other areas allowed homes to go into foreclosure the market has felt the pain and some of the worst housing deflation in the state.

Housing values have taken a tough hit in this once sleepy community. The housing forecast isn’t looking good for Jonesboro in 2009. Prices will continue to decline another 11.4% on the average home through the year.

Across the state in Fayetteville, the real estate market hit the brakes a couple of years ago. By and large most college towns have done well in America’s housing crisis, supported by a rental economy of students. But Fayetteville, where the University of Arkansas is located has broken that tradition. Home prices got too high and the supply of new and resale homes on the market for sale became too high priced, sending the market into a near freefall.

The Fayetteville market will continue to see home prices decline, according to the Housing Predictor forecast in 2009 on average of 10.9%.

In Fort Smith the housing market has been cooling for two years, and sales are projected to be slow again through 2009. The market never really had the double-digit crazed appreciation experienced else where in the nation, and in some ways that’s just fine with most people in this town steeped in old southern tradition. They figure it has less of a fall to take in home prices, which might just be right in 2009. Housing Predictor forecasts the average home price in Fort Smith will deflate 8.6% for the year.