Average home cost rises 7.6% in state

LITTLE ROCK — The average price of an Arkansas home sold in January was up 7.66 percent over a year earlier, while the number of homes sold was down 1.14 percent, the Arkansas Realtors Association said Monday.

The rise in prices could be a sign the market is stabilizing, even though fewer houses were sold, observers say.

The association said that the average price of ahome sold in Arkansas rose to $148,428, compared with $137,872.

There were 1,297 homes sold in January compared with 1,312 sold in the same month a year ago in the 43 counties surveyed by the association.

“Home prices being up leads us to at least hope that we’ve hit the bottom of that house pricing cycle, and that ought to really help increase activity in the market because there is more certainty aboutwhere things are going,” said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock.

Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville, said that strengthening prices and relatively flat sale numbers in January, typically the weakest month for home sales, are good news.

“That’s a good sign and consistent with a slowly, gradually recovering economy,” Deck said.

January is typically the slowest month and a more complete picture will emerge as spring ends and summer sets in, she said.

The association said the higher prices are evidence of a strengthening market.

“In our opinion, these numbers reflect that there are fewer units on the market, and as a result of this reduced inventory, we are experiencing a higher price per sale,” said Amy Glover Bryant, spokesman for the association. “This is great news for sellers, and we look forward to watching what 2012 has to offer the real estate market.”

The housing market crash dragged the country into a recession that lasted from December 2007 and until June 2009.

In Arkansas, 2011 was the worst year since the Arkansas Realtors Association began releasing statistics in 2004. But sales increased in five of the last six months of the year.

The National Association of Realtors said that U.S. sales of previously owned homes fell 7.2 percent in January. Previously owned homes make up about 90 percent of the market. The report by the state association is a mixture of new and previously owned homes.

Bill Weaver, real estate professor at the University of Central Florida, said the country’s weak showing in January spoke to uncertainty in the global and national economy.

“There’s a lot of underlying weakness in the world economy and national economy,” Weaver said to the Associated Press. “That’s not the general economic environment in which people decide to go out and spend $200,000 on a house.”

But Pat Harris, chief executive officer of Coldwell Banker Harris McHaney Faucette Realtors in Rogers, said that each community is different. He said that what is seen inLas Vegas, parts of Florida or in Detroit won’t be the case in Little Rock or Northwest Arkansas or somewhere else that wasn’t hit as hard by the housing crash. Northwest Arkansas suffered the most among the Arkansas markets.

According to the report released Monday, Pulaski County saw a 14.44 percent increase in the number of houses sold, to 214 from 187. The county’s average home price jumped 8.03 percent, to $202,131 from $187,110.

Roddy McCaskill, the executive broker for Keller Williams Realty in Little Rock, said he noticed the increased interest in January.

“We had a pretty good fourth quarter, but in January it’s like somebody flipped on a switch,” he said. “We’ve seen better sales than we’ve seen in a long time, both in prices and number of homes sold. It seems like inventory is going down and our prices are firming up.”

In Benton County the average price of a home sold in January jumped 13.04 percent, to $166,906 from $147,658 last year. The number of houses actually sold in Benton County fell 1.55 percent, or three homes, to 191 total houses sold.

The number of homes going under contract in January in Northwest Arkansas was also up, according to Harris of Coldwell Banker.

“In January and February we saw more homes going under contract than we did a year ago,” Harris said.

Scott McElmurry, chief operating officer at Bank of Little Rock Mortgage, said he was “cautiously optimistic” that the housing market is steadily improving and won’t fall back again.

“We’ve certainly felt like, based on a typical January, that the market is improving quite a bit,” McElmurry said. “As the economy continues recovering people will hopefully feel a little bit safer in making [a] decision to spend $200,000 on a home.”