In state, house sales flat, prices up

June figures earn some optimism

This home for sale Tuesday at 134 Mohawk Drive in Maumelle is advertised at a new price.
This home for sale Tuesday at 134 Mohawk Drive in Maumelle is advertised at a new price.

— Arkansas home prices rose 8.7 percent and the number of sales was essentially unchanged in June compared with the same month last year, the Arkansas Realtors Association said Tuesday.

The average home price was $160,980 in June, up from $148,967 in June last year. The association’s numbers cover only 43 of the state’s 75 counties, but all of the more populous areas are included.

For the first six months of the year, the average home price was $151,764, up 7.5 percent from the same period last year.

The increase in home prices doesn’t necessarily indicate how the overall housing market is doing but often is evidence of the mix of houses sold, said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock.

“Still, the increase in home prices we’ve seen [in recent months] has been a pretty good indication that the market is doing well,” Pakko said.

Improved housing prices followed a report last week of an increase in building permits issued in the state.

The value of building permits for single-family homes in Arkansas jumped 28 percent in the first five months of the year, according to an analysis of data from Mc-Graw-Hill Construction, a marketing and research company.

In May, the value of building permits in Arkansas was up 39 percent compared with May last year, McGraw-Hill said.

Permits are an indicator of future construction.

“Seeing some additional building shows a little bit more strength overall in the real-estate market,” Pakko said.

There were 2,353 homes sold in June in the 43 counties, up only four from 2,349 in June 2011.

June is the first month of the summer peak in sales, Pakko said. “But June sales were weaker than I might have hoped.”

Figures for the first half of the year look better, with home sales in the 43 counties up 4.3 percent to almost 11,700 compared with the first six months of 2011.

“Sales are increasing, but just not as rapidly as I had expected,” Pakko said. “2011 was a pretty low sales year.”

The areas in the state performing the best are the counties with the largest population, Pakko said.

For the first six months of the year, the five counties with the most homes sold — Pulaski, Benton, Washington, Saline and Faulkner — accounted for 53 percent of the homes sold in the state, the Realtors association said.

Nationally, home sales in June were down 5.4 percent to a seasonally adjusted annual rate of 4.37 million, the fewest since October, according to the National Association of Realtors.

But home values recorded the first year-over-year increase since 2007 in the second quarter as the U.S. property market began to lift off a bottom, according to Zillow Inc., a property-data company.

The Zillow Home Value Index rose to $149,300, a 0.2 percent increase from the second quarter of 2011, the company said. Zillow measures the value of 100 million U.S. homes quarterly, whether they sold or not, and calculates the median for its index.

Roddy McCaskill, executive broker with Keller Williams Realty in Little Rock, said he anticipates this year to be the best for his business since 2008.

The reason, he said, is that “people are moving again.”

“It’s what I call the garden variety type of real estate, people wanting to buy bigger houses and sell theirs, moving up and moving down,” Mc-Caskill said. “We have not seen that in such prevalence in recent years.”

In central Arkansas, $300,000 and $400,000 houses are selling again after being hard to sell in recent years, McCaskill said.

The reasons for the spurt in sales for Keller Williams is that “people are finally waking up to the fact that prices are good and interest rates are incredible,” he said.

Some of his clients have financed 15-year mortgages for less than 3 percent and 30-year mortgages for about 3.5 percent, McCaskill said.

Northwest Arkansas’ housing market, the area of the state hardest-hit by the downturn, also has improved. Sales in Benton and Washington counties were up 3.4 percent in the first half of the year compared with the same period last year.

The market’s home prices — and particularly the area’s sales price per square foot — are doing well, said Jeff Cooperstein, researcher at the Center for Business and Economic Research at the University of Arkansas at Fayetteville.

Benton County’s home prices in June averaged $186,023, up almost 12 percent from June last year. In Washington County, the average June home price was $170,199, up about 13.5 percent from a year earlier.

The sales price per square foot last month in Washington County was $78.62 and in Benton County was $76.82, both an increase of about 12 percent, Cooperstein said.

“Prices are firming up, which is a good thing,” he said.

Another sign of the improving housing market in Northwest Arkansas is the decline in unoccupied newly built homes, Cooperstein said. In 2009 and 2010, there was a glut of about 2,000 new homes on the market, he said. Now there are about 100 to 200 newly built homes on the market.

The total number of homes listed for sale also has dropped in Northwest Arkansas, from a peak of about 5,500 in 2010 to about 3,600 now, he said. One of the area’s problems was that too many houses were built before the recession and sat empty for an extended period.

“The recovery [in Northwest Arkansas] is not a strong recovery,” Cooperstein said. “It is a stutter-step recovery.”

Pakko said he believes that the state’s housing market in the second half of the year can outpace the first half.

“I’m not giving up hope that we’ll see a total for the year of around 24,000 [homes sold],” Pakko said. “We’re a little bit below that pace right now to get there.”

The Realtors association also released May home-sales figures Tuesday. Sales in May were up 7.3 percent over May 2011, and home prices rose 13.7 percent to $157,362. Staffing issues prevented the association from releasing May statistics earlier.

Information for this article was contributed by Prashant Gopal of Bloomberg News.

Front Section, Pages 1 on 07/25/2012

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