Home sales up by 11% in state

Prices in January see 2.7% decline

Home sales in Arkansas rose more than 11 percent in January compared with January 2012, the highest increase since February last year, the Arkansas Realtors Association said Thursday.

There were 1,448 homes sold in the 43 counties surveyed by the association, up from 1,297 in January last year. Sales were up 15 percent in February 2012.

A portion of the homes sold in January were attributed to the Christmas storm and related power failures, said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock. People who had expected to close the last month of the year may have been forced to delay those closings until January, Pakko said.

January is typically the slowest month of the year for sales, said Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas in Fayetteville.

The 11 percent increase is “not spectacular improvement,” Deck said, but the gain is the best for January since 2008.

“But you don’t want to give too much weight to any one month,” she said.

Home prices dropped 2.7percent in January compared with January last year.

January typically has the lowest average price each year, Deck said.

And a decline in home prices in January also tends to be seasonal, Pakko said.

“It’s not because houses vary in value, but because there is a different mix of homes that sell throughout the year,” Pakko said.

More expensive homes normally are sold in the summer and lower-priced homes in the early months, Pakko said.

The housing market appears to be healing, said Scott McElmurry, chief operating officer of Bank of Little Rock Mortgage.

“We are getting a lot of prequalification applications,” McElmurry said. “People may be only leaning toward buying a house but they want to get prequalified before they start their housing search.”

Mortgage rates are still among the lowest in history.

For a homebuyer with good credit and a good down payment, mortgage rates for a 30-year loan are around 3.25 percent to 3.5 percent, McElmurry said. For a 15-year loan, rates are about 2.75 percent, McElmurry said.

About half of Bank of Little Rock Mortgage’s transactions were refinancings last year, McElmurry said.

Thus far in 2013, home sales are accounting for 60 to 65 percent of the firm’s deals, McElmurry said.

Pakko said he is cautiously optimistic about home sales in Arkansas this year.

“I was surprised how slow 2012 [sales] were,” Pakko said. “I was expecting to see a pickup. But I think there will be improvement this year. We’ve definitely turned a corner and are seeing an upward trend.”

Deck also expects sales to improve this year in Arkansas.

“It’s not just what’s going on with our employment in Arkansas,” Deck said. “But also national home sales are expected to be up this year and I expect Arkansas to follow the national trend.”

Business, Pages 21 on 03/08/2013

Upcoming Events