Known as the “Natural State,” Arkansas offers both residents and tourists alike a number of outdoor recreation opportunities. But Arkansas also has an economy that has evolved to meet today’s demands. Six Fortune 500 companies call the state home, including the world’s leading retailer Walmart. CNBC ranks Arkansas as the 20th best state in the nation for doing business due to Arkansas having the second lowest cost of doing business and the eleventh best workforce. And according to our research, Arkansas turned out to be one of the most affordable state to live in. So with that being said, let’s delve into the outlook for the 2015 Housing Market in Arkansas Real Estate.
New data from the Arkansas Realtors Association shows that May of this year was a very strong month. Home sales were up 11.5% compared to May of last year. Total sales were the highest single month sales since the summer of 2007. These numbers suggest an improving Arkansas real estate market. This was most evident in the Northwest counties of the state. Agents in the area report selling over 7,000 homes last year, marking the region’s best totals since 2006. The total was up nearly 6% from the previous year. Analyst Paul Bynum of MountData.com classified last year as the third best year for the region. But housing market predictions look good across the state much as they do nationwide.
Co-owner of an Arkansas based Coldwell Banker franchise George Faucette believes that 2015 will finish stronger than last year, citing that the brisk job growth will likely result in increased demand for housing. Recent data backs up his claim. According to the Arkansas Home Sales Report the first half of 2015 was strong for the 4 largest markets in the state. The number of homes sold is up 7%, and the value of homes sold is up almost 13%. Kathy Deck, director of the Center of Business and Economic Research at the University of Arkansas says that these numbers are proof that economic expansion continues through the state.
Influencing Factors for the 2015 Arkansas Real Estate Market
- Zillow has the home value index for the Arkansas real estate market at $114,000. This is a 3% increase in the past year and housing market predictions have this number rising another 3.2% in the next year. Arkansas is showing slow but steady growth along with the rest of the country.
- According to data accumulated from rental websites like Trulia, Zillow, and Craigslist Arkansas has a median rent price of $850. This is lower than the national average making the state an affordable place to live.
- Homeowner delinquent on mortgage rates in Arkansas are 3.9%. This is lower than the national average of 6%. Homes with negative equity are on par with the national average of 15.4%. Arkansas residents are buying homes that they can afford given their personal and household income.
- Homes spend an average of 106 days listed on Zillow. This is close to the national average.
Best Places to Live in Arkansas
According to Zillow Little Rock AR has a home value median of $125,300. This is down nearly 1% from a year ago, but forecasts have it increasing by 2% in the next year. The median rent price is $875. Unfortunately future forecasts for a positive turnaround do little to convince those aware of the market in the recent past. Little Rock AR real estate has not been very stable in past years and foreclosures will be a factor that influences home values for years to come. The city has 8.5 foreclosures per 1,000 and 15.5% of homes have negative equity, both higher than the national average. Even on Zillow’s rival real estate site Trulia Little Rock has a less than healthy real estate market. Trulia has Little Rock’s median sales price 3.2% less than a year ago, and the number of homes sales as decreasing by a whopping 25%. So what does Little Rock offer to keep real estate investors optimistic?
Little Rock has a household income average that is around $5,000 more than the state average and a family income that is nearly $10,000. Not only is Little Rock the capital of the Arkansas, it is also a major cultural and economic hub for the state. It houses several art venues and offers many outdoor activities. And the capital also offers several employment opportunities. Major employers such as Blue Cross/Blue Shield, Kroger, L’Oreal Paris, and Timex impact the local economy, and one of the largest employers in the state -The University of Arkansas for Medical Sciences- and its healthcare partners are centered in Little Rock. Some of the world’s most recognizable non-profit organizations in the world, like the Clinton Foundation, FamilyLife, and the Winthrop Rockefeller Foundation, are headquartered here as well. Little Rock’s housing market might not be the best recently but there is much potential in the state’s capital.
On the opposite end of the housing market is the Fort Smith AR real estate. Home values in the city average around $102,900, up 4.1% in the past year and forecasts have this number rising another 2.7% by this time next year. Median home value prices in Fort Smith have been rising since November of 2012 when they were $92,300. And it is buyers market. In February of this year the average list price was $135,000 but the average sale price was $123,000. This is a decrease of $12,000 below the original list price. Buyers have room in negotiations to bring down the final purchase price. Not only are homes affordable to buy, but they are affordable to rent as well. The average rental price is only $600. And because people can afford what they are buying, foreclosures aren’t an issue in the city; only .3 homes are foreclosed per 1,000!
As stated earlier the northwest region of the state saw record real estate sales. One reason for this is the strength of the Bentonville AR real estate. Bentonville saw a 10% sales increase. The city reported $272 million in sales last year, up $25 million from the previous year. The Walmart Home Office is headquartered in Bentonville, and the retail giant is a visible fixture in the city. The large number of satellite stores means that Bentonville is home to a large number of transplants from around the United States. This has impacted the culture and economy of the city in a very positive way. Lindsey & Associates agent Nicki Rogers says older properties in and near downtown Bentonville are extremely hot real estate properties. List prices on these properties are high but still go under contract immediately upon listing.
Fayetteville AR real estate went the opposite direction of neighboring Bentonville. Fayetteville posted a 2% drop in sales while the total volume of sales remained relatively flat. Despite these numbers local agent Tami Fagan of Crye-Leike claims that last year was a good year. “I don’t see anything really holding back sales in 2015.” And there is data to support her claims. Zillow has a home value index of $168,000 for all homes in Fayetteville. This is up $8,000 from this time in 2013. And the median sale price for all homes in the city is $173,940. So while homes sales and appreciation rates have dropped recently they are still relatively high. And more importantly, the percentage of homeowners that are delinquent on their mortgage is 1.2% compared to the national average of 6%. The Fayetteville real estate market is fairly strong.
Hot Springs AR real estate has done well recently, with appreciation rates rising nearly 5% in the past year and 2.5% in the last quarter. Homes in Hot Springs are affordable with a median house value of $111,036. Single-family homes are the most common, accounting for roughly 60% of the city’s housing. According to Neighborhoodscout.com the Hot Springs housing market is not only some of the best Arkansas real estate but it is one of the top real estate appreciation rates in the nation this last quarter. Hot Springs’ appreciation rate is higher than 80% of the state’s other real estate markets. The city contains a large number of various government entities, and the Hot Springs National Park is one of the oldest federal reserves in the nation. It also has a storied history. The hot spring water was believed to contain medicinal properties by Native Americans and was a subject of legend among numerous native tribes. The city has also been home to everyone from notorious gangster Al Capone to former President Bill Clinton.