The housing market in NW Arkansas has slowed some, following national trends as well as experiencing a seasonal slowdown (there are always fewer homes sold in the winter--and we've had a lot of cold weather lately--until the past week, that is).
In mid-February the 4th Quarter 2006 Skyline report was released with some good news as well as less-good news (depending on whether you live in Benton or Washington County). The good news for Benton County, according to Kathy Deck, Interim Director for the Center for Business and Economic Research at the U of A, is that building permits have "fallen off a cliff", that is decreased significantly. That was something that had to happen, given the oversupply of homes in Benton County, especially in the higher price ranges. There is still an oversupply, but the absorption rate has remained relatively constant, and the average and median prices are still increasing there.
For Washington County, although the number of building permits was also down and the number of homes under construction in active subdivisions was also down, the number of complete but unoccupied homes in Washington County continued to rise, while the absorption rate fell slightly. This means that homes currently on the market will take somewhat longer to sell, compared to Benton County.
To see my blog with more details on the 4th quarter Skyline Report, visit http://nwarealestateblog.blogspot.com
I have also been compiling my own market report according to statistics drawn from the NW Arkansas MLS. For the 4th quarter of 2006, the median and average prices in Fayetteville and Springdale declined, but this is normal behavior for that time of year. In 2005 (a "hot" year for real estate sales) there was also a decline in the 4th quarter, but then as the spring and summer home-selling season prices began to increase again. The decline for the 4th quarter of 2006 (7.83%) was less than the decline for the 4th quarter of 2005 (13.44%). Looking at the whole year, the median sales price for Fayetteville was $179,950 and the averages sales price was $211,356 for 2006.
For Benton County, the 4th quarter brought increases in the median and average prices of homes for both Bentonville and Rogers, 5.19% and 4.85% respectively. However, the pattern is slightly different there, even last year, since the seasonal decline happened in the first quarter of 2006 instead of the 4th quarter of 2005. The annual median home price in Bentonville (now the most expensive community in NW Arkansas to replace Fayetteville) was $185,999 for 2006 and in Rogers it was $168,632. The average sales prices for Bentonville and Rogers respectively were $229,353 and $214,853 for 2006.
It should be noted that all of these figures are below those for the nation as a whole. The issue of "affordable" housing is an important one here in NW Arkansas. For the economy to continue to grow, there have to be homes for working folks as well as high end homes. With this in mind, I interpret the lowering of median and average prices as a positive thing, since these figures are (in part) dependent on the supply of homes available for purchase. The Skyline Report also indicated that an increased number of permist for lower-end homes had increased.
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