Sales of homes plunge

Arkansas home sales fell 6.3 percent last month compared with September last year, the Arkansas Realtors Association said Monday.

There were 1,971 homes sold in the 43-county area covered in the Realtors’ report, down from 2,103 sold in September last year. The 43-county area covers the largest counties in Arkansas.

“It was a disappointingly weak month once again,” said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock. “The third quarter this year was weaker than the first half of the year. Throughout the year, we haven’t seen the pickup in home sales we were expecting.”

For the first nine months of the year, home sales are basically unchanged - 18,369 homes were soldthrough September this year, 97 fewer than the same period last year.

Pulaski County had 306 home sales in September, almost 10 percent less than September last year. Sales were down about 2 percent in Benton County and almost 14 percent in Washington County.

“Northwest Arkansas was having some strong numbers in the summer,” said Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas in Fayetteville. “But those numbers were off in Benton and Washington counties [last month].”

One practical reason for the decline in sales was that there were only 19 business days in September, two fewer than in September 2011,said Scott McElmurry, chief operating officer of Bank of Little Rock Mortgage.

McElmurry said his firm provided mortgages on 7 percent more home sales in September than September last year. But projected closings in October are already 41 percent higher than they were in September, McElmurry said.

“October is traditionally a busier month than September,” McElmurry said. “There are a number of factors that cause that, but one is schools start in September. If they haven’t purchased a house before school, then they’ll often close in October.”

The average home price in the 43 counties last month was about $158,000, up 7.6 percent from September last year.

“We have seen prices firm up quite a bit,” Deck said.

Even though the averageprice is down from where it was in July, when it was about $164,000, it is still significantly stronger than it was in 2008 or 2009, Deck said. The average home price was about $149,000 in 2008 and $145,000 in 2009.

In general, Northwest Arkansas is seeing stronger home prices than last year, Deck said.

The average home price in Benton County was almost $185,000 last month, up almost 18 percent compared with September last year. In Washington County, the average sales price was almost $172,000, up 5 percent over September last year.

Mortgage rates are at the lowest levels ever, McElmurry said.

For a mortgage where the lender doesn’t pay the closing costs, the rate for a 15-year mortgage is only 2.375 percent for borrowers with good credit, McElmurry said. For a 30-year mortgage, the rate is about 3 percent, he said.