Home sales till July top state's '07 peak

Half-year total put at 16,370, up 12%

Information about Residential units sold in Arkansas.
Information about Residential units sold in Arkansas.

The number of houses sold in Arkansas in the first half of 2016 surpassed pre-recession totals, according to statistics released Thursday by the Arkansas Realtors Association.

For the first half of the year, 16,370 homes were sold in the 43-county area surveyed by the association. That's up 12 percent from 14,620 sold through June last year.

The six-month sales total is higher than anytime before the housing bubble burst.

Nationally, housing prices began to decline in 2006 as the practice of offering subprime mortgages to buyers with poor credit caused the real estate market to collapse.

In Arkansas, home sales grew in 2005 and 2006 and hit a six-month sales peak of 16,090 in 2007. A year later, the six-month total for home sales was down by more than 3,000.

Arkansas didn't suffer as much during the housing crisis as other parts of the country, said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock.

"One of the reasons we were spared the ill effects of the housing-market collapse was that we never really saw the huge bubble in home prices to begin with," Pakko said. "The one area of the state where we saw some evidence of that was Northwest Arkansas. That's the area where home prices fell the most and are on recovery now."

Arkansas home sales were up 7.9 percent in June, the 22nd-consecutive month with improving sales compared with sales from a year earlier.

There were 3,330 homes sold last month, only 14 fewer than in May, which was the best month for sales since 2006.

"If you look around the state, the big increases are happening in the metro areas," Pakko said. "Home sales and home prices are still depressed in outlying areas of the state."

More than half of the top 10 counties with the most homes sold were in Northwest Arkansas or the Little Rock metropolitan area.

Benton County Realtors sold 628 homes in June, up 17 percent compared with June last year.

There were 530 homes sold in Pulaski County, up 11 percent, and 400 in Washington County, a jump of 38 percent.

Arkansas' economy is excelling in most areas, said Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville.

"We've had great jobs numbers, good [gross domestic product] numbers from the first quarter, and interest rates remain at historic lows," Deck said. "So the stage has been set for the housing market to be hot."

The Northwest Arkansas market is extremely hot, particularly in certain price ranges, said John Carpenter, a senior vice president with Lindsey & Associates in Northwest Arkansas. The real estate market is as strong as he's seen it in the 24 years he's been in the business, he said.

Carpenter recently put a house on the market in Fayetteville priced at $183,900.

"In less than two hours I had two full-price offers on it and five other agents trying to show it," Carpenter said.

Homes priced between $125,000 and $160,000 are selling at times before they've even been put on the market, Carpenter said.

There are 87 homes in that price range on the market in Fayetteville and 57 are under contract, Carpenter said.

"In certain price ranges, it's just phenomenal," Carpenter said.

The $200,000-to-$250,000 range is almost as active, Deck said.

"Folks looking in that price range are finding they have to offer full price," Deck said. "They're not going to get their offer accepted if they discount it a bit."

Some sellers think every price range is as active, and they are not, Carpenter said.

For example, of homes priced in the $350,000-to-$500,000 range in Fayetteville, only 106 sold in the first six months of this year, Carpenter said. That's about 18 a month.

What is driving the market is the depleted inventory, Carpenter said.

"I'm running into more people who bought homes in the recession who typically would be selling the properties, but they're holding on to them," Carpenter said. "It's easy to take a property like that and [rent it]."

Nationally, the housing market is still below home-sales levels seen in 2005 and 2006, said Greg McBride, chief financial analyst with Bankrate.com, an online publisher of financial rates.

He doesn't expect home sales nationally to reach levels before the bubble burst anytime in the near future.

Average mortgage rates nationally have dropped as low as 3.5 percent in recent weeks, McBride said. Rates in some markets have fallen below that level, McBride said.

Business on 07/29/2016

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