Arkansas Home Prices: On the Way Down

January figures released by the Arkansas Realtors Association on Monday show a drop in Benton County home sales below 2006 numbers, a continuation of a 14-month trend, while average prices indicate a decline, hinting at potential changes in the Arkansas housing market.

“We’re getting back to a more normal market,” said Ethan Nobles, a spokesman for the association.

Benton County home buyers purchased 261 homes in January, down 19.69 percent from 325 homes in January 2006. On a statewide level, buyers purchased 1,928 homes, a 2.38 percent drop from 1,975.

Home sales in Benton County have showed a decrease over previous years’ sales since November 2005. Realtors have long defended the figures, noting that 2005 was a record year in the Arkansas mortgage market and that a longer history of sales puts the drop into perspective, Nobles said.

“You’ve got to consider that the housing market has run white-hot for so long,” he said. “Eventually, that changes. ”

Nobles noted that some of the state’s biggest selling markets seem to be springing back, showing gains over previous years. Washington County home sales were at 170 in January 2007, up 8.28 percent from 157 in 2006.

In what can seem like a counterintuitive trend, as Benton County sales have decreased, the average price of homes sold has continued to rise. This month’s figures break that trend.

The January figures show a 5.85 percent drop in average prices of homes, down to $ 186,506 from $ 198,104 in January 2006. This is the first drop in county prices since the association began compiling its statewide report in July 2005. Statewide, average January prices dropped 0.41 percent, down to $ 149,043 from $ 148,435.

Nobles hopes the lower housing prices will increase sales in the county, which seems to be in keeping with a statewide trend.

On the supply side, northwest Arkansas is still dealing with an oversupply of new housing, but the problem seems to be showing early signs of correction as mortgage activity picks up.

The fourth quarter residential Skyline Report, released in February by researchers at the University of Arkansas, showed that the number of complete but unoccupied houses in Washington and Benton counties fell 13.7 percent from 2,956 to 2, 551 in the fourth quarter of 2006, the first decrease in homes entering the market in more than a year.

SOURCE: The Benton County Daily Record