The flourishing Arkansas residential real estate market passed pre-recession levels in July, the Arkansas Realtors Association said Thursday.
There were 3,161 homes sold in July in the 43-county area surveyed by the association, up 10 percent from a year earlier and the highest single monthly total since June 2006, when 3,493 homes were sold. That was before the recession began in December 2007, Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock, said.
Property values and home prices began to decline in 2007, so the June 2006 total predates the beginnings of the real estate bubble, Pakko said.
July's sales also exceeded June sales this year, Pakko said.
"Given that June was a particularly good month, I wouldn't have been surprised to see a little bit of a drop-off in July," Pakko said. "But [July] was another strong month."
Effects of the recession have faded in Arkansas, Pakko said.
"Over the past year and a half, we've been seeing pretty strong employment growth," he said. "That is reflective of overall economic activity. And there is probably a little anticipation of a reversal of the very low mortgage rates we've been seeing."
It's expected that the Federal Reserve will begin increasing interest rates in the near future, Pakko said.
"So now might be a good time to consider making a move before mortgage rates start going up again," Pakko said.
Benton County led the state with the most houses sold in July with 542. Pulaski County Realtors sold 510 houses in July.
Benton and Washington County combined were up more than 20 percent in July home sales, Pakko said.
"Northwest Arkansas is rebounding quite dramatically from the long slow recovery it had," Pakko said.
The growth is attributed to a combination of new construction and sales of previously owned homes, said John Carpenter, a senior vice president with Lindsey & Associates in Northwest Arkansas.
"We just had a flurry of people trying to get something [closed] before fall gets here," Carpenter said.
Carpenter's sales in August were almost as high as July.
"And July was one of the best months I've ever had in real estate," Carpenter said.
As the Northwest Arkansas real estate market continues to show strong sales, there has been a decline in inventory for newly built homes, Carpenter said.
"But that is starting to change because there is a lot of new construction right now," Carpenter said.
All of the top 10 counties in homes sold have seen an increase in home sales for the first seven months of the year, Pakko said.
Typically, June, July and August are the best months for home sales.
"Once again, August could be down a little bit from July," Pakko said. "But I could be surprised again."
Business on 09/11/2015