2013 Arkansas Housing Market

Arkasas’ January home sales were up 11.6 percent from the previous year. Arkansas

Cause for celebration? Maybe, says the Arkansas Realtors Association.

In announcing the home sales increase, ARA warned against becoming too hopeful where the state’s real estate market is concerned. For one thing, January tends to be the slowest sales month of the year, and it’s still too early to tell how summer sales will go.

For another, month-to-month home sales figures tend to fluctuate widely, according to ARA.

Still, the ARA acknowledges it is difficult not to be cautiously optimistic. Financing rates remain at record lows, home prices have apparently bottomed out, and the nation’s economy is improving as a whole.

In February, the Arkansas Business Journal staff interviewed real estate professional and former Little Rock Chamber of Commerce President Janet Jones regarding what 2013 has in store for the Arkansas real estate market. Following is an excerpt from that interview:

Q: The numbers for residential sales and new housing starts seem to be slowly picking up across the country. Will your industry return to pre-recession norms?

A: As you know, the real estate market in Little Rock remained more stable than in many other areas across the country, never reaching the extreme lows of the markets on the East and West Coasts and some other areas. We are optimistic about the future with low interest rates and a strong economy in Little Rock.

The ARA’s recent report indicated the average price of homes sold in the state’s 43 counties surveyed decreased from $148,428 in January 2012 to $144,471 in January 2013.

The largest number of home sales in the survey area took place in Faulkner, Saline, Washington, Benton and Pulaski counties.

In January, the highest valuation was in Benton County at $175,690, up nearly 85 percent from the same time last year. Pulaski County’s average dipped 7 percent to $169,606, while Washington County was down 24 percent to $154,488.

In a column recently published on The City Wire, Scott McElmurry, president and CEO of Bank of Little Rock Mortgage, wrote, “It’s safe to say that members of the real estate business will look back at 2012 as one of the best years when it comes to low mortgage rates.

“For many in the industry, the prediction for 2013 is that rates will remain at historic lows (good for buyers) and that home prices will continue to recover (good for sellers). And a strong housing market often translates into a strong economy.

“With all due respect to the fiscal cliff discussions going on in the nation’s capital (with a couple of caveats), I feel optimistic about 2013 and what it can mean to the average person looking to buy a first home, refinance his or her current home or downsize into a smaller retirement home.

“Unlike states such as Arizona, California, Nevada or Florida, we weren’t severely crushed by the housing market crash. Sure, we felt some of the effects and there were many people who struggled to sell homes at their optimal asking price. But our market doesn’t have as far to climb to get out of the housing market dip.

“Another factor is better employment figures. Employed people are home-buying people. And as we see unemployment go down we will likely see mortgage generations go up.
This is where the caveats on the fiscal cliff come in. If a deal is not reached, or if the deal reached still leads to economic downturn and/or a cut to the U.S. credit rating, all bets are off.”

In January, Investors Beat offered 2013 property predictions, including one for Arkansas, written by Mark Leggett, of the state’s Team Leggett professional real estate firm. Team Leggett serves Arkansas communities of Benton, Bryant, Little Rock, Maumelle, North Little Rock, and Sherwood in Arkansas.

He wrote the following as his projections for the state’s 2013 real estate outlook:

“The investment market in Arkansas has been strong for the past several years and 2013 should continue that trend. Distressed properties (both foreclosures and short sales) are still readily available and those numbers will not drop significantly this year. Short-sale opportunities are plentiful and are growing as banks are becoming more willing to work with these sellers. Short sales favor investors over an individual homeowner because the investor will typically have more time and patience than a homeowner might have.
The flip market is very competitive as more investors pursue this strategy. Investors need to be patient and prepared. Rental property continues to be very strong as rental rates in Arkansas see the upward trend observed nationally.

“The areas where the strongest opportunities for investment are as follows: Central Arkansas (Little Rock, Benton, Conway), Northwest Arkansas (Fayetteville, Springdale, Rogers) and Jonesboro. These are the population centers of the state and all of these areas are also college towns. College towns remain great investment opportunities both nationally and locally because of the strong rental opportunities.”

Click here for 2012 Predictions