House sales jumped almost 9 percent last year in Arkansas to 34,229, the Arkansas Realtors Association said Monday.
Last year and 2015 were the first years to exceed 30,000 houses sold in Arkansas since 2007, when about 30,500 were sold, said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock.
"[2007] was about the time that [housing] markets around the country started collapsing," Pakko said. "So we're definitely back on track to pre-housing boom and bust conditions."
There were 2,731 houses sold in December, up more than 8 percent compared with December 2015.
Realtors in Benton County again sold the most houses in December, 527, followed by Pulaski County with 411 and Washington County with 302. No other county had surpassed 200 house sales.
House sales in Northwest Arkansas, and particularly Benton County, are booming.
Every part of the real estate market has substantial activity in Northwest Arkansas, said Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville.
"[There is] strengthening of prices, strengthening of [houses] sold and strengthening of new construction," Deck said.
The number of building permits in the area is increasing by double-digit percentages, Deck said.
"Construction activity is picking up substantially," Deck said. "It's not clear that the level of in-migration is picking up as substantially [as new construction]. This is the natural result of years of strong housing markets. We're going to start to see a little bit of inventory on the market where it's been quite modest over this time period."
The average sale price for a house in the state in 2016 was about $169,000, up 5.4 percent from 2015. Home sales in December were up 11 percent compared with December 2015.
"I'm hesitant to put too much stock in average prices," Pakko said. "But the annual totals for [average home prices] are pretty much consistently up around the state. That's a pretty good indication that the market is improving and home prices are generally going up, certainly in the metropolitan areas."
December was a strong month for sales and average prices in Northwest Arkansas, Deck said.
"And for the last several months, the housing market has been very strong," Deck said. "Even with prices going up, you haven't seen [house sales] decline."
Pakko said he expects sales to continue to improve this year.
In his annual economic forecast conference in November, Pakko projected house sales would rise to about 36,500 this year and level off to approximately the same total in 2018.
"That should be the case as long as mortgage rates don't rise too quickly," Pakko said.
Mortgage rates on a conventional 30-year fixed-rate mortgage are in a range of 4 percent to 4.25 percent, said Scott McElmurry, chief executive officer of Bank of Little Rock Mortgage.
Fifteen-year fixed-rate mortgages are about 3.375 percent to 3.5 percent, McElmurry said.
"We're seeing confidence coming back from a buyer's standpoint," McElmurry said.
Business on 02/07/2017