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Central Arkansas homes sales down in April, too

By: 18 May 2011 One Comment

We’ve already seen that homes sales in northwest Arkansas were down in April.

The same is true of markets in central Arkansas. According to Cooperative Arkansas Multiple Listings Services (CARMLS), there were 636 single-family, new and existing homes sold by Realtors in Faulkner, Grant, Lonoke, Pulaski and Saline counties last month. That’s down 32.05 percent from 936 homes sold in April 2010 and down 6.06 percent from 677 homes sold in April 2009.

Furthermore, homes sold in April sat on the market for an average of 88.73 days before sellers purchased them — up from 66.04 days in the same month a year ago but down from 92.83 days in April 2009. The average sales price did increase a bit to $166,891 in April from $164,641 but down from $169,261 in April 2009.

Click here for copies of the April 2011 and year-to-date reports.

At this point, it’s important to point out exactly what numbers we’re reporting. The April report covers closed sales for the month, meaning we’re not necessarily talking about contracts that were entered into in April. Assuming it takes around a month or so to close on a sale, the sales reported in April reflect primarily contracts that were entered into in March and, to a limited extent, in February.

Those contracts that were entered into in March or earlier and closed in April are pending sales, which are completely different than closed sales.

Why make that distinction? Because we’re not comparing apples-to-apples when discussing these reports and we probably won’t be until the July numbers are available. That’s because the federal government, in April 2008, started offering tax credits to first-time home buyers. Those credits were renewed in various forms for two years and expired in April last year.

When we’re looking at April 2011 sales, then, we’re comparing them to sales that closed when a tax credit of up to $8,000 was available for first-time buyers and another one for up to $6,500 was in place for eligible repeat buyers. Last year, home buyers were instructed to get homes under contract before May 1 and to close on them before July 1. While the deadline to close on those sales was extended to the end of September, most people finalized their home purchases prior to the original July 1 deadline.

In other words, the sales from the first six months of 2011 will be compared to transactions influenced by tax credits and logic dictates the comparisons will not be favorable. It’s no surprise, then, that closed sales in April were down from those posted a year and two years ago. The same will likely be true of sales in May and June — it will be a surprise if sales numbers from the next two months are up compared to a May and June where tax credits were still influencing the behavior of buyers.

Looking ahead to the May report, then, bear in mind that a good number of contracts that closed this month were entered into in April. The last couple of month of April were marked by flooding throughout Arkansas. Did the bad weather cause buyers to stay home instead of entering agreements to buy houses? We’ll have to wait until the May housing market report is available to answer that question.

About: Ethan C. Nobles:
Benton resident. Rogue journalist. Recovering attorney. Email = Ethan@FirstArkansasNews.net.

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