Fayetteville Arkansas, University of Arkansas--Old Main Overview

Fayetteville Arkansas, University of Arkansas--Old Main Overview
Overview of Fayetteville, AR

Monday, July 28, 2008

Market Report for June 2008, Northwest Arkansas Real Estate

According to a recent report from the National Association of Realtors®, existing home sales in June in the US are down by 2.6% compared to May and down 15.5% compared to June of last year. For all home sales, single-family home sales declined 3.2% to a seasonally adjusted annual rate of 4.27 million in June from 4.41 million in May, and are 14.8% below the 5.01 million-unit pace in June 2007.

Total inventory in June was up by 0.2%, which represents an 11.1-month supply at the current sales pace, up from a 10.8-month supply in May. The median price for June was $215,100 in June, down 6.1% from a year ago when the median was $229,000.

So how does NW Arkansas compare to statistics for the country? It’s different for each town, and also differs according to price range. Following are some statistics for the area with global numbers for each town (doesn’t take into account price range).

No. of Sales Median Price Av. DOM Supply (in Mo.)

Bentonville

June 2008
78 $197,950 147 20.18

June 2007
87 $196,000 140 11.70

Fayetteville

June 2008
109 $168,500 140 14.96

June 2007
135 $178,500 117 10.97

Rogers

June 2008
84 $166,500 167 18.01

June 2007
125 $178,500 157 13.64

Springdale

June 2008
82 $143,000 140 15.36

June 2007
108 $139,900 128 11.58

Bella Vista

June 2008
83 $155,000 150 13.15

June 2007
108 $162,450 135 10.72

So what do these numbers mean? In terms of months supply of homes, all of the NW Arkansas towns are above the national average, with Rogers and Bentonville significantly so. In fact, the Bentonville supply of homes on the market is almost double what is was last year.

In all cases, the Days on Market (DOM) is higher than it was last year, which means that homes are taking longer to sell. In all of the NW Arkansas towns the number of homes sold in June of this year is down, compared to June of last year. However, unlike the national statistics, more homes were sold in June of this year in all NW Arkansas towns than in May (statistics not reproduced here).

The median price for homes in all of the NW Arkansas towns is much lower than the national average. This means that NW Arkansas is still a very affordable place to live. Springdale and Bella Vista are the most affordable with a significant supply of homes in price ranges within reach of “average” folks. However, the median price range of homes in Springdale and Bentonville in June of this year is higher than that of June of 2007.

I should mention that median price is not necessarily the best indicator of whether prices are coming down or not. However, that is the best statistic we Realtors® have to work with. The median price is that price at which half of the homes sold are more expensive than the median price and half are less expensive.

From practical experience, I am finding that many offers are coming in at substantially lower prices than the list price. Buyers seem to think that all sellers are desperate, which is not necessarily the case. In addition, buyers are asking for more in the way of amenities (i.e. throw in blinds, fences, etc.) on new homes, and on re-sale homes they are asking for closing cost help and down payment assistance.

On the other hand, there are also many bank-owned homes (foreclosures) on the market. This has brought prices down, when considered from a statistical point of view. These homes are competing with “normal” homes for sale and making it difficult for the latter to sell at prices that they would usually bring.

For those who are worried about the so-called "declining" value of their home, the thing to remember is that a home purchase is traditionally a long-term investment. Real estate is cyclical, and what comes down will eventually go up. For folks who will be in their homes over a longer period of time, not to worry. These numbers will change and the market will improve. For sellers that don't have to sell right now, my recommendation is not to put your home on the market; wait a year or two.

Bottom line is that there are a lot of homes on the market now in NW Arkansas. In “realtor-speak” we have a “large inventory.” What this means for sellers who must sell now is that they must price their homes competitively for them even to be looked at, let alone sold. For buyers, it is a golden opportunity—lots to choose from at lower prices. Now is the time to buy, especially since interest rates are still low.

For more information:

http://rismedia.com/wp/2008-07-24/existing-home-sales-down-in-june/
http://www.realtor.org/research/research/ehsdata
http://www.realtor.org/press_room/news_releases/2008/ehs_down_in_june

2 comments:

pierce said...

Someone really decided to put on their thinking cap, great going! It’s fantastic to see people really writing about the important things.

Real Estate Training

Judy Luna said...

Thanks pierce. I'm behind on my market reports--still collecting data, but I hope to have a new one soon.

Judy Luna