LITTLE ROCK — Arkansas home sales rose by 10 percent in September, the third consecutive month of double-digit sales increases, the Arkansas Realtors Association said Friday.
There were 2,103 homes sold in Arkansas in September, up from 1,907 homes sold in September last year. Sales were up about 20 percent in August and in July. New and previously owned homes are included in the report.
Nationally, sales of previously owned homes - about 90 percent of the market - were up 11 percent in September compared with a year earlier, the National Association of Realtors said. New home sales increased nationally by 5.7 percent compared with August, the Commerce Department said.
The comparison of the past three months to the corresponding period last year,however, might be misleading, said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock.
The third quarter of 2010 was the lowest point of home sales in Arkansas in several years, Pakko said. July through September of last year followed the expiration of the federal home buyer tax-credit program, which stimulated home sales earlier in 2010,Pakko said.
“But I don’t want to exaggerate [the comparison],” Pakko said. “The housing market is showing signs of a steady ramping up. The market looks like it is turning up after three good months.”
Home prices fell 4.3 percent in September, the third month of price declines. Prices fell about 7 percent in August and almost 4.5 percent in July.
Lower prices have helped stimulate sales, said Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville.
“I think we have seen a bit of an equilibrium situation where prices have fallen far enough to support a standard post-recession level of activity,” Deck said. “It is good to see, even without subsidies in the market like the home buyer tax credit, that the sales numbers are holding up.”
Sales have stabilized, Deck said. Sales last month were higher than in September 2008 and only slightly lower than in September 2009, before the home buyer tax credit affected the market, she said.
There was strength last month in home sales in the more populous areas of the state, Pakko said.
Sales were up about 19 percent in Pulaski County, 34 percent in Saline County, 26 percent in Faulkner County and 38 percent in Lonoke County. Sales rose 8 percent in Benton County and 9 percent in Washington County.
Low house prices and mortgage rates “motivate demand,” he said.
Pakko said he is confident about the prospect for home sales in the near future. Through the first nine months of this year, there were 18,466 houses sold in Arkansas, down slightly from 18,827 sold in the first nine months last year.
If the trend continues, 2011 should show a slight improvement over 2010, Pakko said.
The performance of the housing market is very important, Deck said.
“The health of the home market and the health of the overall economy are so interrelated,” Deck said. “So obviously there will be impacts we can see coming from things like the Whirlpool layoffs [with 1,000 scheduled to lose their jobs next year]. But as we see the job market strengthen slowly, we’ll seethe housing market strengthen slowly, too. They feed off each other, of course.”
Business, Pages 33 on 10/29/2011