Arkansas Economic Development Institute

Category: Real Estate/Housing

Arkansas House Prices – 2017:Q2

By , August 23, 2017 4:41 PM

The Federal Housing Finance Agency (FHFA) has published new statistics on house prices across the nation.  The data for Arkansas continue to show an upward trend in prices, but with slower rate of appreciation than the nationwide average.  The most comprehensive of the FHFA indexes, Expanded Data Indexes†, show that house prices in Arkansas rose 1.2% in the second quarter of 2017, compared to an increase of 1.7% for the U.S.   Year-over-year growth rates were 4.2% for Arkansas and 6.7% for the U.S.

Source: Federal Housing Finance Agency

Source: Federal Housing Finance Agency

Increases in Arkansas house prices have been consistently lower than the nationwide average throughout the post 2011 housing recovery.  In part, this is simply a function of having experienced a less severe downturn during the 2007-11 housing price collapse.  Compared to the beginning of 2007, the net increase in housing prices in Arkansas has been 3.9% while the comparable figure for the U.S. average is 2.8%.

The Expanded Data indexes are not calculated for metropolitan areas, but the FHFA does publish figures for its All-Transactions Indexes†.  By this measure, house prices increased in the second quarter throughout much of the state, with quarterly declines registered for Fort Smith and Pine Bluff.  Prices in Jonesboro were essentially unchanged.  Over the past year, prices have risen in all metro areas except Pine Bluff, which has seen a decline of 7.9%.

Source: Federal Housing Finance Agency; Seasonal adjustment by the Arkansas Economic Development Institute.

Source: Federal Housing Finance Agency. Seasonal adjustment by the Arkansas Economic Development Institute.

Over a longer span of time, it is clear that Fayetteville and Memphis are seeing the most rapid rates of appreciation.  As illustrated in the figure below, these were also the metro areas that suffered the largest price declines during the period of falling prices.  Meanwhile, house prices in Texarkana and Jonesboro have not increased as rapidly in recent years, but were largely unaffected by the housing price collapse.  Compared to 10 years ago, the metro area with the greatest house-price appreciation has been Texarkana, with Jonesboro also registering above-average increases.

Source: Federal Housing Finance Agency. Seasonal adjustment by the Arkansas Economic Development Institute.

Source: Federal Housing Finance Agency. Seasonal adjustment by the Arkansas Economic Development Institute.

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†The FHFA produces several house price indexes with different coverage.  The basic Purchase-Only Index includes prices from home sales that were financed through the federal enterprises Fannie Mae and Freddie Mac.  The All-Transactions Index also incorporates appraisals associated with refinancing.  Finally, the Expanded Index incorporates information from county recorders’ offices, capturing home sales that were not financed through the government housing enterprises.

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Arkansas Home Sales – 2017:Q2

By , August 14, 2017 5:17 PM

The latest data from the Arkansas Realtors® Association show continued growth in home sales over the first half of 2017.  The monthly report for June 2017 reported a sales increase of 5.9% compared to the previous June, with year-to-date totals up 6.2%.  The growth rate is down somewhat from the double-digit rates that have driven the market over the past four years.  However, the slowdown is not surprising given the extent to which sales have recovered from the pre-recession housing market crash.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

As shown in the figure below, home sales so far in 2017 exceed the sales pace of early 2006, before housing sales began collapsing in 2007.  After seasonal adjustment, it is also clear that the post-2013 rising trend in sales is ongoing.

Source:  Arkansas Realtors® Association; Seasonally adjusted by the Arkansas Economic Development Institute

Source: Arkansas Realtors® Association; Seasonally adjusted by the Arkansas Economic Development Institute

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Arkansas House Prices – 2017:Q2

By , May 24, 2017 5:40 PM

Arkansas house prices continue to trend upward, but at a slower pace than the national average.  According to the latest Expanded Data indexes from the Federal Housing Finance agency, Arkansas house prices rose 1.2% in the first quarter of 2017.  Over the most recent four quarters, Arkansas house prices were up 4.2%.  Over the same period, the national average for house prices increase by 6.7%

Source: Federal Housing Finance Agency

Source: Federal Housing Finance Agency (FHFA)

The comparatively rapid pace of house prices nationwide reflects a rebound effects in the areas where prices declined the most during the market crash of 2007-11.  As shown in the following figure, that pattern holds true for the metro areas that cover parts of Arkansas.  House prices declined by over 12% in Memphis and by nearly 20% in Fayetteville from 2007 to 2011.  Those two metro areas have also seen the most rapid home-price appreciation since 2012.  Having experienced little depreciation during the period of housing price declines, Jonesboro and Texarkana have seen the highest rates of cumulative price increase since 2007.

Source: Federal Housing Finance Agency (FHFA).  Seasonal Adjustment by the Institute for Economic Advanacement

Source: Federal Housing Finance Agency (FHFA). Seasonal Adjustment by the Institute for Economic Advancement

In the most recent quarter, house prices were up in all of Arkansas’ metro areas except Little Rock, where prices are reported to have fallen by 1.0%.  Prices were down over the quarter in non-metropolitan regions of he state.  Over the past year, prices have risen most rapidly in Fort Smith and Fayetteville, and have risen most slowly in Pine Bluff and Little Rock.

Federal Housing Finance Agency (FHFA). Seasonal Adjustment by the Institute for Economic Advancement

Federal Housing Finance Agency (FHFA). Seasonal Adjustment by the Institute for Economic Advancement

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Arkansas Home Sales – December 2016

By , February 7, 2017 1:48 PM

The Arkansas Realtors® Association has released home sales information for December 2016, completing the data for calendar year 2016.  Sales for the month totaled 2,731, up 8.3% from the previous December.  Total sales for the year were 34,033, up 8.1% from 2015.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

The rising trend in home sales has now run more than four full years.  As shown in the chart below, quarterly seasonally-adjusted data display robust growth since at least the beginning of 2013.  Seasonally adjusted sales in the fourth quarter of 2016 were 8,870, breaking through the pre-recession sales level of approximately 8,500/quarter.

Source:  Arkansas Realtors® Association; Seasonally adjusted by the Institute for Economic Advancement

Source: Arkansas Realtors® Association; Seasonally adjusted by the Institute for Economic Advancement

Last November, our forecast for home sales in 2016 was 33,600, so the final figures for the year slightly outpaced expectations.  Sales in 2017 are expected to continue their robust growth, with our forecast calling for over 36,000 home sales and a year-over-year growth rate of 8.4%.  This outlook is conditioned on a continued slow pace of rising interest rates.  If the Federal Reserve raises rates more aggressively than presently expected, a slowdown in home sales might take hold before the end of 2017.

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Arkansas Home Sales – November 2016

By , January 18, 2017 4:19 PM

The Arkansas Realtors® Association announced this morning that home sales in November 2016 were up 24.4% compared to November 2015.  As shown in the figure below, home sales typically slow during the final three months of the year, with November often showing a sharp drop-off compared to October.  In 2016, the October-November decline was only 5.9%, compared to an average of over 20% in the previous three years.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

After seasonal adjustment, the November sales total represented one of the strongest months of the year:  The seasonally-adjusted monthly total of 2890 homes translated to an annual sales pace of nearly 35,000.  More importantly, the November statistic is in line with an ongoing growth trend that has prevailed for nearly four years now.  With only one month left to be reported in the calendar year, the year-to-date figures show an increase of 9.9% compared to the same period in 2015.

Source:  Arkansas Realtors® Association; Seasonally adjusted by the Institute for Economic Advancement

Source: Arkansas Realtors® Association; Seasonally adjusted by the Institute for Economic Advancement

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Arkansas Home Sales – September 2016

By , November 11, 2016 3:19 PM

According to newly released data from the Arkansas Realtors® Association, home sales across the state totaled 3,010 in September — up 6.5% from September of 2015.  This increase comes on the heels of a year-over-year increase of 15.2% in August.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

With the peak summer months now behind us, it is now inevitable that home sales growth will be significantly positive for the fourth consecutive year.  For the first three quarters of 2016, home sales 6.5% higher than the same period a year earlier.  As shown in the figure below, seasonally-adjusted home sales have been following a clear upward trend since late 2012, and are on track to make 2016 the highest sales volume since before the housing market collapse in 2007.

Source:  Arkansas Realtors® Association; Seasonally adjusted by the Institute for Economic Advancement

Source: Arkansas Realtors® Association; Seasonally adjusted by the Institute for Economic Advancement

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Arkansas Home Sales – June 2016

By , July 28, 2016 4:44 PM

According to the Arkansas Realtors® Association, Arkansas home sales in June were up 7.9% from the previous year.  This represents the 22nd consecutive month of positive year-over-year changes.  The average growth rate over that 22-month period has been 10.2%.  The sales total for June was down slightly from the previous month, but the two-month total was the highest May-June combination since 2006.  Year-to-date sales were up 12.0% from the first six months of the previous year.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

Quarterly seasonally-adjusted data smooth out the seasonal fluctuations and some of the month to month volatility.  As shown in the figure below, home sales in 2016 have reached a pace about equal to 2006, prior to the onset of both the collapse of the national real-estate bubble and the onset of recession.

Source:  Arkansas Realtors® Association; Seasonally adjusted by the Arkansas Institute for Economic Advancement

Source: Arkansas Realtors® Association; Seasonally adjusted by the Arkansas Institute for Economic Advancement

 

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Arkansas Home Sales – March 2016

By , April 28, 2016 10:55 AM

The Arkansas Realtors® Association announced this morning that home sales in March totaled 2,770 — an increase of 9.7% from March of 2015.  The latest figures extend a string of year-over-year increases that has now lasted 19 consecutive months.  The average growth rate over those 19 months has been 10.2%.  As shown in the figure below, March sales are typically part of the upswing from a slow winter season to a strong summer.  This years total for March, however, is close to peak summer month sales in 2013 and 2014.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

The longer-run upward trend in home sales is highlighted in the following figure, which shows seasonally adjusted sales by quarter.  The trends suggest that home sales in 2016 are likely to be close to the robust pre-recession pace.  In fact, if we extrapolate the first quarter’s seasonally adjusted sales pace through the remainder of 2016 (no further growth other than seasonal variation), home sales for the year would be around 32,640 — close to the record-high 33,896 reported in 2006.  If trend growth continues, the annual total could be even higher.

Source:  Arkansas Realtors® Association; Seasonally adjusted by the Institute for Economic Advancement

Source: Arkansas Realtors® Association; Seasonally adjusted by the Institute for Economic Advancement

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Arkansas Home Sales – January 2016

By , March 23, 2016 3:52 PM

The Arkansas Realtors® Association this morning announced monthly sales figures for January 2016.  January is typically the lowest sales month of the year, so the monthly total will ultimately account for a relatively small share of total sales for the year.  Nevertheless, as shown in the figure below, January sales are often a harbinger of how the year will turn out.  In 2016, January sales of 1,831 were 9.1% higher than a year earlier. It was the highest January sales total since 2007.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

The relatively mild winter we experienced in Arkansas may have contributed to unusually strong January sales.  Seasonal factors aside, however, the January sales figure is consistent with the trend of increasing home sales that has prevailed since at least the beginning of 2013 (see figure below).  Even if seasonally adjusted monthly sales figures leveled-off at the January pace for the remainder of 2016, total sales for the year would exceed 2015 by approximately 4%.

Source:  Arkansas Realtors® Association; Seasonally adjusted by the Institute for Economic Advancement

Source: Arkansas Realtors® Association; Seasonally adjusted by the Institute for Economic Advancement

Among the largest counties in the state, sales were consistently robust.  The only county in the top five to experience a decline in sales from January 2015 to January 2016 was Washington County.  Yet that small decline (-3.8%) was measured from a unusually strong 2015 base.  In 2015, home sales in Washington county were up nearly 30% from the previous year, so the cumulative increase from January 2014 to January 2016 was 24.5%.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

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Arkansas Home Sales – December 2015

By , March 10, 2016 3:34 PM

The latest data from the Arkansas Realtors® Association shows a year-end surge in home sales.  Compared to the previous year, home sales were up 19.6% in December.  There is often a year-end uptick in home sales, but the most recent increase was far larger than usual.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

For two reasons, however, this measured increase is probably overstating the trend rate of growth.  First, the previous December was relatively weak, so this December’s growth rate is calculated from a low base.  Second, the timing vagaries of closing dates on real-estate transactions can sometimes result situations where transactions that might have concluded in November were carried over into December — that is, there is often some month-to-month randomness.  The seasonally adjusted data shown below–which strips away some of the predictable seasonal variation — suggest this might have been the case at the end of 2015.   It is November’s relative weakness that stands out as the deviation from the prevailing trend.

ARA_1215_SA

Source: Arkansas Realtors® Association; Seasonal adjustment by the Institute for Economic Advancement.

Another way to look past the monthly variability is to consider quarterly-averages.  Year-over-year growth for the entire fourth quarter of 2015 was up 11.6% from the previous year, up slightly from the 10.2% growth rate of the first three quarters of the year.

Source: Arkansas Realtors® Association; Seasonal adjustment by the Institute for Economic Advancement.

Source: Arkansas Realtors® Association; Seasonal adjustment by the Institute for Economic Advancement.

Total sales for the year topped 30,000 for the first time since 2007, and were 10.6% higher than the total for 2014.  The outlook for 2016 is for continued sales growth, as improving economic conditions and an ongoing environment of relatively low mortgage rates continues (for now).

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