September home sales jump 18% from 2012, led by Benton County

Home sales in Arkansas jumped more than 18 percent in September, the Arkansas Realtors Association said Friday, a month when buyers usually take a break because of the start of the school year.

Realtors sold 2,341 homes in September, up from 1,978 homes sold in September 2012, according to the report of Realtors in a 43-county area that includes the state’s largest markets.

It was the third consecutive month that sales increased more than 18 percent compared with the same month of the previous year, said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock.

“That’s a consistently strong showing,” Pakko said. “It’s not as if we’re seeing just a peculiar one-month blip in data. This is undoubtedly a trend of significant improvement of what we’ve been seeing over the last few years.”

September sales were about the same as September 2009, the month leading up to a deadline for a federal home buyers’ tax credit, Pakko said.

“To find a stronger September, you have to go back to 2006, which was well before the [recession],” Pakko said.

There is some concern, however, about the size of the drop in sales in September compared with August, said Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville.

In August, more than 2,800 homes were sold in the state, the best month in more than three years. But September sales were off 20percent from August.

Deck said she expected September’s sales to trail August’s, but not by such a large margin.

“September’s numbers were worse than you would expect from just the [back to-school] seasonal shift,” Deck said. “[The month-over month falloff] was more extreme than what we had been seeing in the past few years.”

A rise in mortgage rates was one reason for the September drop, Deck said, with interest rates a full percentage point higher than earlier this year.

Mortgage rates fell to as low as 3 percent early this year and have risen above 4 percent, said Scott McElmurry, chief executive officer of Bank of Little Rock Mortgage, one of the largest mortgage lenders in central Arkansas.

Nationally, existing home sales fell 1.9 percent in September compared with August, the National Realtors Association reported.

Benton County Realtors sold 404 homes in September, the third straight month the county has led the state in sales and the fifth time this year it led all other counties.

Northwest Arkansas saw a steeper drop in home sales during the recession than in the rest of the state, Pakko said.

“So it’s good to see such a strong recovery,” he said.

Through September this year, Benton County has reported 3,855 home sales, 430 more than were sold in Pulaski County. About 1,000 more homes were sold in Benton County through September this year than in the same period a year ago.

“These strong figures aren’t coming from Northwest Arkansas alone,” Pakko said. “Looking at the year-to-date changes, almost every large market covered by this survey has had double-digit growth.”

Arkansas’ average home price in September fell 1.6 percent to about $155,000.

“I wouldn’t be concerned with the decline in home prices,” Pakko said. “It was small, and we see a lot of month-to month variations [in prices].”

Deck agreed.

“You would expect, from August to September, to see that [average] sales price drop a little,” Deck said.

Pakko projects that Arkansas’ home sales will increase by at least 10 percent for the year.

“As is usually the case, home sales are going to taper off at the end of the year because we’re getting into the slow season,” Pakko said. “We should have at least double-digit rates [of growth] this year, even if the bottom drops out in the last three months.”

Front Section, Pages 1 on 11/02/2013

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