Central Arkansas housing market down for December, year
What weighed on the market last year? A sluggish economy obviously took its toll on sales in 2010 and a high unemployment rate didn’t help things either — Arkansas closed out 2010 with a 7.9 percent unemployment rate, which is up from 7.6 percent recorded at the end of 2009. Perhaps the largest factor impacting sales was the expiration of federal tax credits for first time and repeat home buyers.
Last month, 568 homes were sold in Faulkner, Grant, Lonoke, Pulaski and Saline counties — down 3.4 percent from 588 sales in the December 2009. Average sales prices held steady in central Arkansas in December — $166,538, which is a slight improvement over the average of $166,020 in the same month in 2009.
While sales were down in December, the number of homes sold represents an improvement over trends that developed in the latter half of the year. Last year, 7,706 homes were sold in central Arkansas — down 14.56 percent from 9,019 sales in 2009.
Click here for the complete December and year-end sales report for central Arkansas and have a look at the numbers for yourself. The report was compiled from statistics from Cooperative Arkansas Realtors MLS (CARMLS) in Little Rock. Throughout the region, the average sales price increased 3.92 percent to $172,506 last year from $165,998 in 2009. Also, the average sales price per square foot improved slightly to $82.95 from $82 and the average time a home sat on the market before it was sold last year was 77.43 days — down from 79.45 days in 2009.
Furthermore, central Arkansas buyers, on average, purchased larger homes last year. The average size of all homes purchased in 2010 was 1,880.26 square feet, up 2.24 percent from 1,839 square feet in 2009.
Still, that 14.56 percent drop in sales was a concern last year and the aforementioned tax credits were largely to blame for the decline. The tax credit offered first time buyers up to $8,000 for purchasing a house while repeat buyers could claim up to $6,500. The credit expired for all homes not under contract before May 1. The credit still influenced sales primarily through June but a bit through September as people wanting to claim the credit were initially directed to close before July 1. That deadline was extended to the end of September, but most Arkansans met the initial cutoff date.
Bear in mind that housing markets throughout the nation had been assisted by one tax credit or another for two full years. What we saw in the latter half of the year, then, was a housing market that was not influenced by tax credits and sales dropped as expected. Due to the success of the tax credits, comparing sales from a time when those had expired to a time when they were in full force is a bit misleading. In other words, we’ll not be able to do an “apples-to-apples” comparison nor determine if sales are returning to “normal” levels (whatever those are) until late spring.
What’s in store for 2011? The national Mortgage Bankers Association has forecast improved sales this year and has forecast $615 billion in purchase originations this year compared to $473 billion in 2010. The Association also expects to see interest rates climb above 5.5 percent by the end of 2011 and then rise above 6 percent in 2012.
Benton resident. Rogue journalist. Recovering attorney. Email = Ethan@FirstArkansasNews.net.