Housing sales hit '06 level in state

Low joblessness called key factor

Graph showing information about Residential units sold in Arkansas
Graph showing information about Residential units sold in Arkansas

Arkansas home sales in June were the highest in 11 years, the Arkansas Realtors Association said Monday.

There were 3,527 homes sold last month in the 43 counties that report to the association, the highest total since 3,493 homes were sold in June 2006.

There are at least two reasons for increasing home sales, said Mervin Jebaraj, interim director of the Center for Business and Economic Research at the University of Arkansas in Fayetteville.

One is that the economy continues to perform well, Jebaraj said. Employment rates remain low, which means many more people are able to find work, he said.

"The other factor is that in spite of everything the Federal Reserve has done recently [in raising interest rates], mortgage rates historically are still really low," Jebaraj said.

There were 587 homes sold in Benton County in June, down 6.5 percent from June last year. Washington County Realtors sold 369 homes, down 7.8 percent from the previous June.

The inventory of homes for sale in Benton and Washington counties is low, Jebaraj said, and the number of available lots to build new homes is also low, he said.

"People want to build on lots that are close to the city," Jebaraj said. "The lots that are left [close to the cities] are really expensive. It's hard to find more lots unless something changes."

The options to address the problem, Jebaraj said, are for cities to change some commercial zoning to residential or for contractors to build homes further outside of cities on much less expensive land.

For the first six months of the year, there were 17,381 homes sold, up 6.2 percent from the first half of 2016.

Benton County real estate agents sold 2,978 homes through the first six months of the year, up 3.3 percent. Pulaski County was second with 2,705 homes sold, down 2.9 percent than the same period last year.

Washington County at 1,787, and Saline County at 1,004, were the only other counties with more than 1,000 homes sold in the first six months of the year.

The 6.2 percent growth in home sales for the first six months of the year is not as big as double-digit improvements in the past three years, said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock.

"But to see 6 percent growth is still a pretty healthy market," Pakko said.

The average Arkansas home price in June was $184,387, up 2.3 percent from a year earlier. For the first six months of the year, the average home price was $166,706, up 4.7 percent.

"That [4.7 percent growth] is consistent with other sources of home prices," Pakko said. "That is more evidence of a market where supplies are becoming diminished."

Business on 08/15/2017

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