Category: Real Estate/Housing

FHFA House Prices – 2015:Q4

By , February 25, 2016 4:08 PM

New data from the Federal Housing Finance Agency (FHFA) show continuing appreciation of Arkansas house prices.  As illustrated in the figure below, the FHFA Expanded-Data Index for Arkansas increased in each quarter of 2015.  In the fourth quarter, the index was up 1.1% from the previous quarter, and 3.2% higher than the previous year.  The index for the U.S. — recovering from a significantly sharper decline of 2007-2011 — was up 1.3% for the quarter and 5.6% for the year.

Source:  Federal Housing Finance Agency

Source: Federal Housing Finance Agency

The expanded data indexes are only available at the state level, but the FHFA publishes All-Transactions indexes that cover metropolitan areas as well.  The table below summarizes recent house-price changes in Arkansas’ eight metro areas.  In the fourth quarter, prices were down in Little Rock, Pine Bluff and Texarkana.  For the year, prices were down only slightly in Texarkana, but were higher in all other metro areas (as well as the non-metropolitan portions of the state).

Source:  Federal Housing Finance Agency; Seasonal Adjustment by the Institute for Economic Advancement.

Source: Federal Housing Finance Agency; Seasonal Adjustment by the Institute for Economic Advancement.

House prices in Northwest Arkansas have shown the most rapid appreciation over the past five years, but are recovering from the largest house-price declines in state during the 2007-2011 period.  In fact, the figure below illustrates that most of the state’s metro and non-metro areas suffered only modest declines during the nationwide housing price collapse, and all have shown at least modest appreciation over the most recent two- to five-year period.

Source: Federal Housing Finance Agency; Seasonal Adjustment by the Institute for Economic Advancement.

Source: Federal Housing Finance Agency; Seasonal Adjustment by the Institute for Economic Advancement.

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Arkansas Home Sales – November 2015

By , February 4, 2016 4:45 PM

The Arkansas Realtors® Association released their penultimate monthly report for 2015 this morning, showing a total of 2104 homes sold in Arkansas during November.  Home sales typically drop off sharply toward the end of the calendar year, and this year is no exception.  Nevertheless, November’s total was up 4.3% from the previous year.

Source: Arkansas Realtors® Association

Source: Arkansas Realtors® Association

December is always a relatively slow month as well, so the cumulative year-to-date totals reported today provide a good indication of how the year will turn out.  For the first 11 months of the year, home sales were up 9.2% compared to the same period in 2014.

As shown in the chart below, seasonally adjusted data reveal that November’s home sales were somewhat below the recent growth trend.  However, a single month slowdown provides little reason to expect that the steady growth we’ve seen over the past 3 years will abate.  In a forecast presented in early November, we anticipated that 2015 sales growth would end up at close to 9%, and projected a year of double-digit growth for 2016.

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

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

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Arkansas Home Sales – July 2015

By , September 10, 2015 10:56 AM

The latest monthly report from the Arkansas Realtors® Association shows a continuing uptrend in home sales around the state.   Sales of new and existing homes in July were up 9.9% compared to the previous year.  This followed a year-over-year increase of 15% in June.  Typically, the peak sales month of the year occurs in June, July or August.  Given the strength of the June report, it would not have been surprising to see a slight drop-off in July.  However, sales of 3,161 homes in July managed to exceed the 3,113 figure for June.  Cumulatively, over the first 7 months of the year, home sales are up 10.3% compared to 2014.

Source: Arkansas Realtors® Association

Source: Arkansas Realtors® Association

Seasonally adjusted data shown in the chart below clearly show the upward trend in home sales over the past 3 years.  The early phase of the recovery may have been driven, in part, by demand overhang from the recession and its aftermath.  Over the past 1-1/2 years, on the other hand, we’ve seen a pick up in job growth that has undoubtedly helped to spur increasing home sales.  Another factor behind this summer’s strength in real estate markets is the outlook for interest rates.  Mortgage rates remain near historic lows, but it is anticipated that the Federal Reserve will begin raising rates soon — perhaps as soon as next week.  Some of this summer’s home sales activity might be related to home buyers seeking to finalize their new home purchases before higher mortgage rates materialize.

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

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

The strength in home sales has been concentrated in the larger metropolitan-area markets.  Northwest Arkansas sales increases have been particularly robust:  Washington and Benton Counties combined showed a year-over-year increase of 20.6% in July.  Among the ten highest-sales counties in the state (table below), there are a handful in which July sales were below a year ago.  However, all ten show increases in year-to-date sales.

Source: Arkansas Realtors® Association

Source: Arkansas Realtors® Association

 

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Arkansas House Prices – 2015:Q2

By , September 4, 2015 11:09 AM

Recently-released data from the Federal Housing Finance Agency (FHFA) show that Arkansas house prices continued an upward trend during the second quarter of 2015.  Statewide, the FHFA “expanded data” index increased by 1.0% from the first quarter, and was up 2.9% from a year earlier (seasonally adjusted).  By comparison, the national index was up 1.5% quarter-to-quarter, and up 6.2% year-over-year.

Source:   Federal Housing Finance Agency

Source: Federal Housing Finance Agency

Around the state, metro-area house prices (as measured by all-transactions indexes) were generally up — with the notable exception of Fort Smith.  Volatility in the Fort Smith index masks a longer-term stability, with prices basically flat compared to five years ago.  Among other metro areas, year-over-year increases ranged from 1.7% in Little Rock to 4.9% in Jonesboro.

Source:  Federal Housing Finance Agency

Source: Federal Housing Finance Agency

Over the past five years, the metro areas with the most rapid rates of appreciation were Fayetteville and Jonesboro, both up 8.5%.  Since reaching a low point in 2011:Q2, house prices in Fayetteville have increased by 14.3%, recovering over half of the losses experienced from the beginning of 2007 through 2011:Q2.  As shown in the chart below, house price changes have varied considerably around the state since the housing market boom peaked around the beginning of 2007.  Prices remain 5% to 10% lower in Fayetteville and Memphis, but are up 10% to 15% in Jonesboro and Texarkana.  As measured by the all-transactions index, the statewide average of house prices is up slightly from 2007 (+0.5%).

Source:  Federal Housing Finance Agency

Source: Federal Housing Finance Agency

 

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Arkansas Home Sales – May 2015

By , July 14, 2015 12:15 PM

New data from the Arkansas Realtors® Association indicates that May was a very strong month for home sales, up 11.5% compared to May 2014.  Total sales for the month were 2,579, the highest single-month of sales since the summer of 2007.  Home sales are typically highest in the summer months (June-July-August), so the May figures suggest a 2015 housing market that is continuing to improve dramatically, with strong momentum going into the summer months.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

After removing the typical seasonal variation in home sales, the following chart shows an extended uptrend in sales that has prevailed over the past 3 years.  Relative to the trend, May is clearly a strong month.  However, it follows some weakness over the recent winter months, which were affected by some unusually harsh weather conditions that might have delayed some transactions.  As is usually the case, the next two or three months will be important for gauging annual sales totals.

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

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

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Arkansas House Prices – 2015:Q1

By , May 26, 2015 4:51 PM

The Federal Housing Finance Agency released new data on home prices this morning.  According to the FHFA’s “Expanded Data Indexes,” house prices in Arkansas declined slightly in the first quarter of 2015, falling by 0.4% from the fourth quarter of 2014.  Compared to a year ago, house prices in Arkansas were up 1.7%.  Nationwide, house prices were up 1.4% for the quarter, and were 5.8% higher than a year before.  Since hitting a trough in the second quarter of 2011, prices have increased by 11.5% in Arkansas and 22.2% nationwide.  The slower rate of appreciation in Arkansas reflects the fact that house prices declined be less then the rest of the nation during the price collapse of 2007-2011.

Source:  Federal Housing Finance Agency

Source: Federal Housing Finance Agency

The Expanded data indexes are compiled using data from actual sales prices gathered from FannieMae, FreddieMac, FHA and County Property Recorder sources.  For metropolitan areas, FHFA publishes a set of “All-Transactions Indexes” that are based on actual sales prices along with appraisal values from refinancing.  As shown in the chart and table below, home prices in the various metro areas of Arkansas have displayed widely differing patterns.  Fayetteville and Memphis experienced price declines from 2007 to 2011 that were consistent with nationwide averages, but prices in both of those metro areas have shown significant recovery since then.  At the other extreme, prices in Texarkana, Jonesboro, Fort Smith and Little Rock showed little downward movement during the nationwide decline, and have experienced net positive appreciation since 2007.

Source:  Federal Housing Finance Agency.  Seasonal adjustment by the Institute for Economic Advancement.

Source: Federal Housing Finance Agency. Seasonal adjustment by the Institute for Economic Advancement.

In the first quarter of 2015, home prices were higher in 5 of 8 metro areas, with declines in Fayetteville, Pine Bluff, and Texarkana.  Pine Bluff was the only metro area to have experienced a decline compared to the first quarter of 2014.  Over the 5 years since 2010:Q1, house prices have fallen 6.4% in Pine Bluff and 0.7% in Hot Springs, but are up in the state’s other metro areas.  The highest rate of appreciation has been in Jonesboro, where prices are 8.2% higher than they were five 5 years go.

Source:  Federal Housing Finance Agency.  Seasonal adjustment by the Institute for Economic Advancement.

Source: Federal Housing Finance Agency. Seasonal adjustment by the Institute for Economic Advancement.

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Arkansas Home Sales – March 2015

By , May 20, 2015 3:28 PM

New data from the Arkansas Realtors® Association show another strong month for Arkansas real estate markets, with home sales up 15.8% in March compared to the previous year.  Sales of 2,526 homes represented the highest March sales total since 2007.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

Following year-over-year gains in both January and February, total home sales for the first quarter of the year were up by 10.2% compared to the first quarter of 2014.  As shown in the figure below, seasonally adjusted home sales are continuing to follow a steadily rising trend.  The pace of sales has now recovered to well-above the peaks in 2009 and 2010 that were artificially inflated by federal home-buyers’ tax credits.

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

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

Home sales were up among all of the largest counties in the state, with year-over-year gains particularly notable in Craighead County and Sebastian County.    The combined year-over-year increases for the Northwest Arkansas counties of Benton and Washington were 13.8% for March and 11.7% for the first quarter.   The combined totals for four Central Arkansas counties (Pulaski, Faulkner, Saline, and Lonoke) showed increases of 20.4% for the month and 8.5% for the quarter.

Source: Arkansas Realtors® Association

Source: Arkansas Realtors® Association

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Arkansas Home Sales – January 2015

By , March 10, 2015 3:54 PM

New data from the Arkansas Realtors® Association (ARA) show that home sales in January 2015 were up 5.1% from the previous year.  As shown in the figure below, January is typically the slowest sales month of the year, so it is not possible to conclude too much from the one month’s sales figures.   Nevertheless, the sales total of 1,678 homes reported is the highest sales total for the month of January since 2007.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

Weather is often a factor for home sales during the winter months.  A year ago, January was a particularly wintery month, whereas weather conditions have been more harsh this year in February.  Hence, the year-over-year comparison for January might be more favorable than the figures will be for February.

Setting aside seasonal fluctuations, it is clear that Arkansas home sales have been on an increasing trend for the past two years.  Using the statistical technique of seasonal adjustment, the chart below eliminates the predictable seasonal swings, leaving only the trend and monthly variability.  From this perspective, the January sales total is right in line with recent sales trend.

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 House Prices – 2014:Q4

By , March 9, 2015 4:53 PM

The latest house price data from the Federal Housing Finance Agency (FHFA) showed continuing appreciation at the end of 2014.  According to the FHFA Expanded-Data Indexes, Arkansas house prices rose 0.6% in the fourth quarter (seasonally adjusted), and were up 3.0% for the year.  This compares to a quarterly increase of 1.3% nationwide, and a 6.0% annually.  As shown in the accompanying chart, the slower pace of house price appreciation in Arkansas is largely attributable to the fact that the drop in house prices from 2007-2011 was not as pronounced in Arkansas as in many parts of the country, so the rebound is not as rapid.  The fourth quarter figure for Arkansas shows house prices approximately 3.3% below their levels in the second quarter of 2007.  This is roughly consistent with the latest data from an alternative source of home-price data, CoreLogic®, which shows house prices being 3.8% below their previous cyclical peak in mid 2007.

Source:  Federal Housing Finance Agency

Source: Federal Housing Finance Agency

Patterns of house price changes differ dramatically around the state.  The chart below shows house price indexes for Arkansas metro areas, relative to the first quarter of 2007.  Only Fayetteville and Memphis showed house price declines from 2007-2011 that were comparable to the national average.  Other metro areas in the state experienced much more muted declines (or no decline at all).  Hence, several metro areas in the state have experienced net appreciation over that past 7 years.

Source:  Federal Housing Finance Agency;  seasonally adjusted by the Institute for Economic Advancement

Source: Federal Housing Finance Agency; seasonally adjusted by the Institute for Economic Advancement

The table below summarizes house price changes in Arkansas metro areas over the past 5 years.  Of the eight metro areas that include parts of Arkansas, only Hot Springs and Pine Bluff have shown recent declines.  Over the past two years, metro area which has exhibited the largest house price increases is Fayetteville, where house prices declined the most during the nationwide house-price decline.  A similar situation holds in Memphis, where the declines during 2007-2011 were larger than in other parts of Arkansas, but a significant rebound in prices has taken place in the past two years.   Texarkana is an unusual case:  Recent house price increases in Texarkana have been larger than in several of the other metro areas in the state, but there was never any significant house price declines recorded in Texarkana during the housing bust.  So over the past 5 years, house prices in Texarkana have increases more than any other metro area in the state.

Source:  Federal Housing Finance Agency;  seasonally adjusted by the Institute for Economic Advancement

Source: Federal Housing Finance Agency; seasonally adjusted by the Institute for Economic Advancement

 

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Arkansas Home Sales – 2014

By , February 20, 2015 2:51 PM

The final home sales report for 2014 from the Arkansas Realtors® Association showed December home sales at 2,107, up by 6.8% from December 2013. For the year as a whole, sales were 28,453, up 4.5% from the previous year.  As shown in the figure below, December is typically one of the slower months of the year for home sales so the monthly total contributes less to the annual total than do the summer months.  Nevertheless, the data for December 2014 show a slight uptick from the previous month.

Source:  Arkansas Realtors® Association

Source: Arkansas Realtors® Association

After smoothing out recurring seasonal fluctuations, however, the seasonally-adjusted data in the next figure show that December was actually a bit weaker than the trend that prevailed during 2014.  That is, the uptick in the raw data was smaller than would be expected for a typical December given the previous trend.  Overall though, the one-month downtick in the seasonally-adjusted series is not unusual and does not necessarily indicate any sign of a sustained slowdown.

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

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

In fact, month-to-month fluctuations in the home sales data are common.  The home sales figures are based on closing dates, and there can be considerable variability in the accounting — particularly when weekends fall near the end or beginning of the month.  Moreover, the data are often revised when home sales are entered into the MLS database after the housing report has been issued.  So it is useful to look at the data after smoothing out seasonal fluctuations AND month-to-month variability.  The quarterly figure below makes both adjustments.  When considering the fourth quarter of 2014 as a whole, home sales continued to follow an increasing trend.

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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