It's been a slow housing downturn in Arkansas just like the way many other things go in the Deep South. Home sales saw a slower pace, and then markets picked-up. Arkansas housing values haven't come close to falling off a cliff as prices have fallen only modestly.
Despite the fact that Arkansas hasn't suffered the enormous pain other areas of the country have in the housing downturn, markets aren't yet fully turning the corner into a recovery. The federal government's first time buyers' tax credit increased home sales, but only in the lower price ranges.
In Little Rock businesses have been closing their doors in increasing numbers as the pain from the national recession hits Arkansas' largest urban center. Small businesses haven't been able to get the financing they need to stay in business to make it through the tough economy.
Little Rock topped a population of 360,000 during the boom, but locals say many are fleeing the area in search of work else where. The result has been a rise in foreclosures, which are only projected to worsen over the next year. Home sales are mainly anchored by bargain priced properties even as values decline.
Tough times are changing the state's biggest urban center. The first time buyers' tax credit and expansion of the incentive propelled the market to rising sales, which are projected to last into 2010. But without additional government action, Little Rock is forecast to sustain average housing deflation of 5.1% for the year.
| City |
Forecast |
| Little Rock |
− 5.1% |
| Jonesboro |
− 6.2% |
| Fayetteville |
− 3.2% |
| Hot Springs |
− 5.7% |
| Fort Smith |
− 3.3% |
In nearby Hot Springs, foreclosures were hardly heard of during the boom, but the community that turned into a second home market for vacationers has fallen on hard times. Home sale signs are cropping up and many homeowners are hopeful they'll be bank assisted short sales before lenders foreclosure.
The housing market is troubled in Hot Springs. Housing sales, however, are being boosted by bargain hungry investors, which should give the market an advantage in 2010. Average home prices are forecast to deflate 5.7% by year's end.
In north-east Arkansas, Jonesboro began to see a rise in foreclosures in the last two quarters, mainly of newer homes where builders worked out deals with bankers to creatively get first time buyers into homes. New home building has all but ceased in Jonesboro these days. Average housing values are forecast to decline as a result 6.2% in 2010 as many people leave the area in hopes of finding work elsewhere.
In Fayetteville in north-west Arkansas the market was in a wild free fall as home values fell at double digit rates. The area attracted investors during the boom and many newcomers drawn by new employment opportunities. But the overbuilt market is stabilizing as new investors come in to make bargain priced purchasers. Fayetteville is forecast to see average home prices deflate only 3.2% in 2010.
In Fort Smith home prices have declined with the fall out of the financial crisis, but nothing like more populated areas of the country. Improving home sales should develop mainly during the first half of 2010, but slow in the spring. Housing Predictor forecasts housing prices in Fort Smith to deflate a mild 3.3% for the year before the market turns.
