Arkansas home sales up 18% in December

Arkansas home sales ended 2013 with a significant jump as December sales were up almost 18 percent compared with December 2012 and annual sales rose almost 13 percent, the Arkansas Realtors Association said Wednesday.

There were 27,218 homes sold in Arkansas last year, up from 24,161 sold in 2012. It was the best year for home sales since 2007, when 30,897 homes were sold before the recession deepened.

The results for 2013 weren’t unexpected, said Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville.

“As the numbers [of home sales] went up, we didn’t see the average price of homes take off,” Deck said. “So that’s one way you’d expect to see a good quantity [of sales] - those prices remained relatively restrained. And given that we were seeing a generally improving national economy, that means that folks who moved here from somewhere else had the ability to do so.”

The average home price in December was down about 2.6 percent compared with December 2012 but was up 1.7 percent for 2013 compared with 2012.

December was a good month for sales when typically it is one of the slower months of the year.

There were 1,972 homes sold in the month, up 17.6 percent from 1,677 sold in December 2012. That was the largest volume for December since December 2006, said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock.

“[2013] was a very good year [for home sales],” Pakko said. “Finally, I think we saw the recovery of the residential real estate market from the recession.”

Benton County recorded the most home sales in the state in December and for all of 2013.

Realtors in Benton County, which has about 60 percent the population of Pulaski County, sold 367 homes in December, 26 more than in Pulaski County.

For the year, more houses sold in Benton County, 4,628, than in second-ranked Pulaski County, 4,499. Those were the only two counties that reported more than 3,000 homes sold last year.

“Benton County is the heart of the job market in Northwest Arkansas,” Deck said. “And when you have job growth, you’re going to need to sell more houses. That’s what the Benton County numbers reflect.”

Of the top five performing counties for the year, the three in Central Arkansas - Pulaski,Saline and Faulkner counties - outperformed the two in Northwest Arkansas - Benton and Washington counties.

The three Central Arkansas counties saw 7,476 home sales last year, higher than the 7,312 sold in the two counties of Northwest Arkansas.

As is the case with job growth, home sales in rural areas of the state are lagging the metropolitan areas, Deck said.

The top nine counties for home sales in December - covering Northwest Arkansas, Central Arkansas, Fort Smith, Hot Springs and Jonesboro - accounted for 1,407 sales, more than 71 percent of the homes sold in the state.

“If you’re talking about the challenges in Pine Bluff or some of the rural areas in the state, the home sales numbers reflect that,” Deck said.

Pakko said he expects continued growth in home sales this year, but not at the pace of 2013.

“Part of the big surge that we saw in the summer last year was from pent-up demand from the previous two years and continued low financing rates,” Pakko said.

Mortgage rates are likely to rise only slightly this year, said Scott McElmurry, chief executive officer of Bank of Little Rock Mortgage, one of the largest mortgage lenders in Central Arkansas.

The 30-year fixed rate mortgage is about 4.25 percent and the 15-year fixed rate is about 3.375 percent to 3.5 percent, McElmurry said.

Mortgage rates should remain in the low to mid 4 percent range through the summer and by the end of the year be in the upper 4 percent range to low 5 percent range, McElmurry said.

“I think 2014 is going to be the year we get back to somewhat of normalcy,” McElmurry said, barring any unforeseen events. “We’re really going to find out the health of the market this year.”

Business, Pages 25 on 01/30/2014

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