Northwest Arkansas home sales soar as inventory shrinks

Increased sales, shrinking inventory push prices higher

NWA Democrat-Gazette/ANTHONY REYES • @NWATONYR Construction workers build a home Friday on Laurel Springs Road in Springdale. Real estate agents sold 667 homes in Benton and Washington counties last month, up from 585 in March 2014. Agents sold 1,596 homes through the first three months this year compared to 1,433 last year.
NWA Democrat-Gazette/ANTHONY REYES • @NWATONYR Construction workers build a home Friday on Laurel Springs Road in Springdale. Real estate agents sold 667 homes in Benton and Washington counties last month, up from 585 in March 2014. Agents sold 1,596 homes through the first three months this year compared to 1,433 last year.

Limited choices are helping Northwest Arkansas homes sell quickly.

The number of homes for sale hit a 12-year low last month and one-third of sales occurred within two weeks of being put on the market, said Paul Bynum, owner and director of real estate marketing firm MountData.

Northwest Arkansas Home Sales

The recorded first quarter accumulated home sales in Benton and Washington counties for the past three years.

YearValue of Homes SoldUnits*Median Home Price

2015$302.8 million1,596*$159,975

2014$250.8 million1,433*$141,900

2013$248.1 million1,454*$140,000

Source: MountData

"It's the hottest sellers' market in history," he said of the area's market. "The demand is there, the prices are going up, and I haven't really seen construction wake up."

Real estate agents sold 667 homes in Benton and Washington counties last month, up from 585 in March 2014. Agents sold 1,596 homes through the first three months this year compared to 1,433 last year.

Prices also increased with the median sales price reaching $159,400 in March compared to $145,199 a year earlier. The median price hit an all-time high in February at $162,000, Bynum said.

"The housing market is just on the brink of rising even more in price," said Christine Cook, executive broker and senior vice president for Lindsey & Associates. "The demand is high."

Bynum said homes priced less than $300,000 are in a sellers' market, meaning there are fewer options and sellers can typically get a higher price.

Tina Hodne, a Realtor with Coldwell Banker Harris McHaney & Faucette Real Estate, said she's seeing homes priced less than $300,000 on the market one week or less before buyers snatch them up.

"It's not unusual to get multiple offers on that first day," she said.

Hodne said one reason the supply is small is many people wait until later in the spring when the grass is green and flowers are in bloom to put their homes on the market.

"A lot of sellers think the best time to list is May, but really what my experience shows is January and February are great times to list your house," she said. "There is not as much competition."

Cook said Northwest Arkansas still has a lot of first-time home buyers trying to find entry-level homes. Bynum said it's very likely many of the lower-priced homes are being grabbed by investors.

Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas, said the Northwest Arkansas' population and job growth are pushing home sales.

Northwest Arkansas' annual population growth rate is 1.9 percent and the job growth rate is 4.6 percent. The national rates are 0.75 percent and 2 percent, respectively.

Deck said home construction is strong and is about on the level the area experienced in the 1990s and early 2000s despite a small dip between 2013 and 2014. The area's four largest cities issued 1,421 single-family home building permits in 2014 compared to 1,476 in 2013.

"Construction is at a good clip, but not overheated," Deck said. "It's at appropriate levels for a low-inventory market."

Bynum said home builders are finding land is getting more expensive to purchase and that will push the price of new homes up.

The median price of the area's 387 new construction homes on the market in March was $255,200. More than 65 percent of the new homes, or 253, were in Benton County.

Cook said she expects land prices in rural areas to also increase.

Kristi Rogers of Bentonville said she and her husband, Rick, wanted to buy land in 2012 to build on when they moved back to the area, but couldn't find anything priced to sell until about 18 months ago. She said they jumped at the opportunity to by 20 acres of foreclosed property for $73,000 in Vaughn, just west of Bentonville.

"We plan to build sometime in the next year," she said, adding they will likely sell some of the property.

The home the couple purchased in 2012 is in Bentonville's Central Park neighborhood.

"We thought it would probably have a good resale value, and the value has gone up $10,000," she said. "We didn't really know it, but it turned out to be a great investment."

Central Park is in a growing part of west Bentonville near three schools.

Foreclosure activity in the two-county area in the first quarter remained below levels in the first three months of 2014. Benton County had 119 and Washington County had 64 foreclosure filings through March compared to 183 and 75 respectively a year earlier, according to RealtyTrac, an online marketplace for foreclosure properties.

NW News on 04/18/2015

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