2008. What a year! Alot has happened in the housing market and around the world. While most areas continue to suffer, the Northwest Arkansas Housing Market has faired better than the rest in terms of home values, sales, and foreclosure rates. Whether you are buying a home, selling your home, or you just want to know what the market is doing - this is downright informative stuff.
A couple of things to keep in mind. The following market report is for Residential housing in Benton and Washington Counties. While MLS (multiple listing service) data is deemed reliable, it is not 100% accurate so this market snapshot comes with a disclaimer. It is here to assist you in making informed housing decisions based on the market data we have available.
As you can see by the average days on market and price per foot graph above...the previous 4 years have seen a gradual increase in average days on market as inventories increase and demand for housing decreases. There has also been a gradual drop (after 2005) of the average price per square foot. Please notice the difference between 2007 and 2008 - from $99.95 to $92.50 is a decrease of 7.45% in average price per square foot. This is only an average and is not necessarily and indicator that homes are worth this percentage less in your neighborhood.
Let's take a look at the actual number of sold listings in Benton and Washington Counties...
We know that 2006 is when home sales and pricing began to slow/drop. We can see that the average still went up between 2005 and 2006. The telling number is the drop from an average home price of $187,810 in 2007 to $179,832 in 2008. That is a drop of 4.25% from 2007 to 2008. Remember that this is the actual price that home sold for, not list price. It also does not include any incentives or concessions offered by the sellers (of which there were many more in 2008 than 2007. All in all, 4.25% is not a huge drop when you consider everything going on in 2008. It looks like Northwest Arkansas was a good place to buy after all.
Let's look at a graph of 2008's sale prices month by month...
This graph gives us a breakdown of the average home prices in Benton and Washington counties for each month of 2008. While prices fluctuate somewhat, a linear trendline shows that the average home price in Northwest Arkansas dropped significantly in 2008 from the 190's to the 170's and lower. This approximately equates to a 10% drop in the average value of homes in Northwest Arkansas. Before you run off thinking your home is worth 10% less today than it was a year ago there are some things you need to know:
- Northwest Arkansas has highly localized markets - there are even pockets in NWA where homes have increased in value year over year.
- Foreclosures currently make up a large percentage of sales - these home are generally priced to move and may even be sold significantly below normal market value...these sales drive average home prices down and skew results.
As I always say...keep this in perspective. Yes, average home prices are down and home sales are down. Some areas in Northwest Arkansas are up a little, some are down double digits. Our market is nothing like many major metropolitan areas when home prices are down 30-50% for the year. Please keep that in mind and have a big sign of relief. I believe the worst in the housing market is over but the next few months will tell the tale.
Just do it!
If you are considering buying a home....buy it. You won't find a better time with better rates in the next decade. If you are considering selling your home....sell it. If you've bought smart and built equity, you should have no problems coming out fine in the transaction. Will you make a boat load of money, probably not....will you mae it up on your next home....probably so. If you want to move or need to move, move. With more and more people realizing there's deals to be had, inventories are going down, and God willing, prices are stabilizing and beginning the climb back up.
If you would like to know exactly what you home is worth in this market to make informed decisions, please don't hesitate to contact me or another Realtor you trust to prepare a detailed market analysis for your home.