Arkansas Economic Development Institute

Arkansas Home Prices in 2013

By , February 27, 2014 3:28 PM

Data from the Federal Housing Finance Agency shows that home prices in Arkansas rose modestly during 2013.  From the fourth quarter of 2012 through the fourth quarter of 2013, the FHFA Expanded Data Index shows an appreciation rate of 0.2% (seasonally adjusted).  The comparable rate of appreciation for the entire nation was 7.8%.  All of the gain in Arkansas home prices was attributable to an increase in the first quarter of the  year (+1.3%).  Prices declined 0.9% percent in the fourth quarter, following modest declines in the second and third quarters.

Source:  Federal Housing Finance Agency

Source: Federal Housing Finance Agency

The relatively slow rate of appreciation in Arkansas is not surprising.  During the house price collapse of 2007-2011, prices in Arkansas did not fall nearly as far or as fast as the national average — hence, we are experiencing a smaller bounce-back.

The state-wide average performance of house prices gives a general view of residential real estate prices in Arkansas, but it also masks some differences across regions.  As shown in the table and chart below, house price performance has varied considerably among the state’s metropolitan areas.  The Fayetteville metro area saw the largest increase in house prices over the year (and over the most recent 2-year period) as its market recovered from the steepest price decline in the state during the 2007-11 decline.  House prices in Texarkana were down slightly for the year, but that change represents only a modest setback in an otherwise increasing trend.  Fort Smith and Hot Springs saw the largest 1-year declines, and prices in both of those metro areas are down over the most recent 5-year span.  Nevertheless their cumulative declines since the beginning of 2007 are smaller than either Fayetteville or Memphis.  (In fact, from 2007:Q1 through 2013:Q4, house prices in Fort Smith are down only 0.1%.)  House prices in Memphis declined by over 12% during the 2007-11 downturn, and have yet to show any significant improvement.

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

 

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

Recently released statistics on home prices from CoreLogic®, a data and analytics company, corroborate some of the trends seen in the FHFA data.  For example, the CoreLogic figures show a much slower rate of appreciation in Arkansas than for the national average.  In fact, the full-sample CoreLogic numbers show a decline in Arkansas home prices during 2013.  After netting out distressed sales*, however, home prices were up 3.2% from December 2012 through December 2013.  The CoreLogic statistics also show relative weakness in Fort Smith and Hot Springs — as do the FHFA data.  Net of distressed sales, however, prices in Fort Smith were rising faster than the statewide average.  Increasing prices in Texarkana confirm that the short-term weakness suggested by the FHFA data is likely a data anomaly, and not a sign of a trend reversal.

Source:  CoreLogic®

Source: CoreLogic®

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* Distressed sales include properties that have been through foreclosure and those that are exchanged in “short-sales” (in lieu of foreclosure).

 

Arkansas Taxable Sales – 2013:Q4 (Preliminary*)

By , February 11, 2014 2:30 PM

Preliminary data on Arkansas Taxable Sales (ATS) show a slight decline in the fourth quarter of 2013 — down 0.2% from the previous quarter (seasonally adjusted).  The fourth quarter decline followed a 0.7% contraction in the third quarter.   Expenditures on gasoline fell by 7.5% in the fourth quarter, primarily as a result of lower prices.  Accordingly, Arkansas Taxable Sales Including Gasoline (ATSIG) declined by 0.5% compared to the previous quarter.  Over the four quarters from 2012:Q4 to 2013:Q4, the net increase in ATS was 2.1%.  Including gasoline, the year-over-year gain was only 1.1%.

Sources: Department of Finance and Administration, Oil Price Information Service, Institute for Economic Advancement

Sources: Department of Finance and Administration, Oil Price Information Service, Institute for Economic Advancement

Sources: Department of Finance and Administration, Oil Price Information Service, Institute for Economic Advancement

Sources: Department of Finance and Administration, Oil Price Information Service, Institute for Economic Advancement

For the year as a whole, ATSIG was 2.5% higher than the previous year — matching the rate of increase from 2011-2012.  Following a 7.4% decline during the recession year of 2009, taxable sales had shown a rebound of 5.2% in 2010.   The slower growth in subsequent three years has barely exceeded the rate of CPI inflation.  (Annual CPI increases were 3.1% in 2011, 2.1% in 2012, and 1.5% in 2013.)

ATSIG-2013

Sources: Department of Finance and Administration, Oil Price Information Service, Institute for Economic Advancement

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Arkansas Taxable Sales (ATS) is calculated by the Institute for Economic Advancement to serve as a timely proxy for Arkansas retail sales. The series is derived from sales and use tax data, adjusting for the relative timing of tax collections and underlying sales, changes in tax laws, and seasonal patterns in the data.  Arkansas Taxable Sales Including Gasoline (ATSIG) incorporates data on the state motor fuel tax and gasoline prices from the Oil Price Information Service.

A spreadsheet of the data is available here: Arkansas Taxable Sales 2013:Q4(P) (Excel file)

* Data are preliminary until the release of the DFA report, Arkansas Fiscal Notes for January 2014, and will be updated when information becomes available.

Metro Area Employment and Unemployment – December 2013

By , February 6, 2014 2:52 PM

Yesterday’s news release from the Bureau of Labor Statistics summarized unemployment in the nation’s metropolitan areas as follows:  “Unemployment rates were lower in December than a year earlier in 339 of the 372 metropolitan areas, higher in 25 areas, and unchanged in 8 areas.”  In Arkansas, the counts were far less favorable.  Compared to December 2012, unemployment rates were lower in only half of Arkansas’ metro areas — and by fairly small magnitudes.  Unemployment rates were up in three metro areas, and up sharply in Pine Bluff and Texarkana.  The rate in Little Rock was unchanged.

Source:  Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

Source: Bureau of Labor Statistics, Local Area Unemployment Statistics (LAUS)

Smoothed seasonally adjusted estimates show that the most recent month-to-month changes were more favorable.  From November to December, unemployment rates declined in four of the state’s metro areas, were unchanged three, and ticked up by 0.1% in Fort Smith.

Source:  Bureau of Labor Statistics, Smoothed Seasonally Adjusted Metropolitan Area Estimates

Source: Bureau of Labor Statistics, Smoothed Seasonally Adjusted Metropolitan Area Estimates

Over time, the smoothed seasonally adjusted estimates show that progress toward lower unemployment stalled, at best (e.g. Fayetteville, Jonesboro, Little Rock) and has reversed in other areas (Pine Bluff, Memphis, Hot Springs, Texarkana).  Overall, the state’s unemployment rate has been stuck in the range of 7% to 7.5% for the past two years.

Source: Bureau of Labor Statistics, Smoothed Seasonally Adjusted Metropolitan Area Estimates

Source: Bureau of Labor Statistics, Smoothed Seasonally Adjusted Metropolitan Area Estimates

Payroll Data
The latest data from the payroll survey show similarly stagnant trends — at least for most of the state’s metro areas.  From November to December, payroll employment declined in Fort Smith, Jonesboro, and Texarkana.  Hot Springs showed a strong month-to-month increase, but was down 0.8% from the previous year.  Pine Bluff and Texarkana also showed year-over-year declines.

Source:  Bureau of Labor Statistics, Current Employment Statistics

Source: Bureau of Labor Statistics, Current Employment Statistics

Since the onset of the 2008-09 recession, 3 of the state’s 8 metro areas have recovered to the point of having positive net job growth:  Jonesboro, Fayetteville, and Little Rock.  The remaining Arkansas metro areas (along with the statewide total) remain below employment levels of December 2007.  The chart below shows that patterns of employment growth around the state have been varied.  While Fayetteville, Jonesboro and Little Rock have followed consistent recovery paths since the end of the recession, other areas have recovered more recently (e.g.  Fort Smith, Hot Springs, Memphis).  After an initial recovery phase, employment in Texarkana has been declining since early 2011.  Pine Bluff has been on a downtrend throughout the recession and recovery periods.

Source:  Bureau of Labor Statistics, Current Employment Statistics

Source: Bureau of Labor Statistics, Current Employment Statistics

Household/Payroll Divergence
We have noted that the payroll and household surveys have been providing conflicting signals for statewide employment.  This is also true at the metro-level.  The following chart shows that the household measure of employment has been consistently under-reporting employment growth relative to the payroll measure.  Although the magnitudes of the growth rates differ, both surveys show the similar relative performances among the state’s metro areas.  Upcoming revisions (particularly to the payroll figures) might help reconcile the discrepancies between the two measures of employment.

Source:  Bureau of Labor Statistics

Source: Bureau of Labor Statistics

 

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