Arkansas Residential Sales Prove Contagious

The coronavirus itself is contributing to the 2020 momentum by spreading residential discontent among homeowners who wearied of their living quarters under the work-from-home model.

That’s the report from some of the largest residential markets in the state, a one-two effect reflected by sales data. Despite the hassles of marketing a home under a cloud of heightened health concern, double-digit increases abounded in central Arkansas during January-July in 2019-20. (See Single-Family Home Sales chart below.)

Countywide home sales were up 34% in Lonoke, where Cabot is the dominant market; 30% in Saline, led by the tandem cities of Bryant and Benton; 20.7% in Pulaski, where residents are scattered across Little Rock, North Little Rock, Maumelle, Sherwood and Jacksonville; and 17.4% in Faulkner, largely fueled by Conway.

“2020 is obviously a unique and very different year,” said Tom Baxley, co-owner and managing broker of Baxley-Penfield-Moudy Realtors in Bryant. “There was a lot of self-evaluation by housebound folks who started reflecting on their housing situation.

“People with time on their hands became motivated to fix up their houses. With that, they put their houses on the market to sell. All of that helped drive the market.”

Stoked by a dose of coronavirus-induced restlessness, buyers often are shopping for bigger accommodations with special consideration given to more home office space and more elbow room for the kids and distance learning demands.

“People are looking for different situations because of working at home, without a doubt,” said Brandon Long, executive broker at the Bentonville office of Weichert Realtors-The Griffin Co. and co-owner of the Springdale firm. “They want more space in general to replace a home office that may work for one but not for two at the same time.”

Motivated Market

Residential sales in the Benton County market, home to Bentonville, Rogers and Siloam Springs, are particularly robust.

The average sale price of homes in the county crept upward almost weekly to $275,583 by the end of July, and the tally of homes sold through the first seven months of the year hit a whopping 4,349. That is a 9.6% increase compared with 2019.

Brandon Long

“Sellers putting their houses on the market are serious, and buyers are serious,” Long said. “Motivation is high because of COVID-19. People are going to the extra trouble of opening their houses to prospective buyers during the pandemic, and people are going to the extra trouble to look at houses.

“Sellers are listing their homes at the top end of what they believe their property is worth, and they’re often getting their asking price and then some. I’ve never seen so many contracts doing away with the appraisal requirement.”

In the current seller’s market, some buyers have demonstrated a willingness to waive the standard “subject to appraisal” provision on purchase offers in hopes of gaining a competitive edge over rivals.

These hungry buyers are sometimes digging into their wallets to pay the extra money beyond the appraised value to secure mortgage financing and close on a deal.

“A home is an interesting thing because we all need shelter, but it is an investment, and if you live there long enough, paying a premium will take care of itself,” Baxley said. “You can make it up over time as the mortgage is paid down and the property appreciates if you don’t pay too much.”

Heading Northwest

Home sales this year started off strong in northwest Arkansas and have largely tracked at a feverish pace. In the Washington County market, dominated by Fayetteville and Springdale, January-July sales this year surpassed the seven-month tally in 2019 by 6.2%.

“For us, we have not seen any negative effects with COVID whatsoever,” said Jody Hendrix, principal broker and co-owner of Keller Williams Market Pro Realty in Fayetteville. There was a momentary lag in the spring early in the outbreak, but that was a blip on the radar. The next thing you knew we had a huge tailwind from low interest rates.”

That scenario played out in other prominent Arkansas markets, too.

January-July homes sales in Sebastian County, powered by Fort Smith and Greenwood, climbed 11.8% over the same period in 2019.

Craighead County, with its housing epicenter in Jonesboro, recorded a 7.8% increase on the same timeline along with Hot Springs-led Garland County, which grew by 6.6%.

“Our inventory is the lowest it’s been, which is really good if you’re a seller,” said Kevin Kercheval, owner and executive broker of Coldwell Banker Village Communities in Jonesboro. “The flip side is you’ll probably pay more for your new house, but helping that is borrowing money is cheap.”

Shrinking Inventory

With house sales flying, buyers are presented fewer choices as the roster of listings has dwindled as the year has progressed. That has ramped up the competition as well.

“The biggest thing I can tell you is that there is a shortage of inventory, and that is driving this sense of urgency on the part of buyers,” Jody Hendrix said. “It’s incredibly common to have multiple offers on a house.”

He noted the frenzy of prospective buyers who responded when a Fayetteville home went on the market for around $120,000 earlier this year. The new listing was greeted with a flurry of 39 offers.

Hendrix said that some would-be buyers, bruised by losing out to competitors on earlier bid attempts, have adopted an additional tactic to try to land a house.

They have resorted to writing letters with personal asides about how much their kids love the backyard and more to try to win over a homeowner to please sell to their family.

“There’s almost a hint of desperation out there,” Hendrix said. “Many homes are selling for more than the listing price. If you’re trying to buy a house, it’s tough. Across multiple price points, there are less than 30 days of inventory.”

He noted that northwest Arkansas listings, dominated by houses in Benton and Washington counties, totaled 1,386 on Sept. 8. “I’m used to seeing 3,500 to 4,000,” Hendrix said. “That’s crazy low. That’s nuts.”

In Saline County, Tom Baxley said the sweet spot range of $150,000-$250,000 for a home remains ever popular.

“That’s an affordable market for more people, but all of the price ranges are hopping,” he said. “Coming up with inventory has been the real challenge.”

‘Be Ready to Step Up’

Baxley noted that the hot market helped form a five-home chain of sales scheduled to close later this month. Buying and selling contingencies among the various parties started with a first-time home purchase of $195,000.

The series of Saline County transactions topped out with a $450,000 residence. Mixed in with the string of moving-up buyers are empty nesters taking advantage of the seller’s market to downsize.

Tracy Tidwell

Tracy Tidwell, executive broker at ERA Team Real Estate in Conway, said the declining inventory in the market makes move-in ready houses even more desirable.

“If anything hits the market under $150,000 and up to $175,000, there are multiple offers within hours if the house is in good condition,” Tidwell said. “Now that’s moving into the $200,000s with multiple offers at $250,000 if the house is updated.

“Buyers need to be preapproved, ready to make a decision, have done their homework and be ready to step up to the plate. If it’s a good deal for somebody else, it’s a good deal for you.”

Single-Family Home Sales
Ranked by average days on market before a house is sold, January–July 2020

FAULKNER

	2018	2019	2020
Sold	990	935	1,098
Price	$155,000	$165,000	$179,900
SF	$1,855	$1,904	$1,920
Price	$172,811	$189,153	$199,911
Per SF	$92	$97	$102
DOM*	44	49	39

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SALINE

	2018	2019	2020
Sold	1,192	1,084	1,410
Price	$167,000	$167,425	$182,500
SF	1,978	1,942	2,016
Price	$196,123	$192,837	$214,399
Per SF	$96	$96	$103
DOM*	53	53	40

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LONOKE

	2018	2019	2020
Sold	739	652	874
Price	$144,900	$151,450	$160,000
SF	1,807	1,816	1,831
Price	$159,077	$167,006	$175,675
Per SF	$86	$90	$94
DOM*	50	57	44

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PULASKI

	2018	2019	2020
Sold	3,304	2,794	3,525
Price	$165,000	$165,587	$177,900
SF	2,012	2,008	2,039
Price	$203,133	$204,685	$215,754
Per SF	$94	$94	$100
DOM*	56	55	47

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GARLAND

	2018	2019	2020
Sold	978	992	1,058
Price	$157,000	$156,500	$169,700
SF	1,946	1,963	1,974
Price	$195,127	$195,680	$213,823
Per SF	$96	$95	$108
DOM*	96	72	64

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CRAIGHEAD

	2018	2019	2020
Sold	909	984	1,061
Price	$154,000	$156,100	$165,000
SF	-	-	-
Price	$177,043	$181,986	$191,552
Per SF	-	-	-
DOM*	94	94	90

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WASHINGTON

	2018	2019	2020
Sold	2,192	2,264	2,405
Price	$187,900	$200,795	$215,000
SF	1,996	1,975	1,991
Price	$229,780	$237,574	$251,014
Per SF	$115.12	$120.29	$126.07
DOM*	107	95	93

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BENTON

	2018	2019	2020
Sold	3,722	3,968	4,349
Price	$196,313	$214,900	$234,000
SF	2,110	2,128	2,165
Price	$238,1115	$251,616	$275,583
Per SF	$112.85	$118.33	$127.29
DOM*	103	99	94

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SEBASTIAN

	2018	2019	2020
Sold	956	938	1,049
Price	$129,950	$140,700	$139,500
SF	1,908	1,965	1,860
Price	$156,988	$169,790	$161,147
Per SF	$82.28	$86.41	$86.64
DOM*	104	110	102

Sources: Cooperative Arkansas Realtors Multiple Listing Services, Northwest Arkansas MLS Matrix, Fort Smith MLS Matrix and Northeast Arkansas Board of Realtors.