Northwest Arkansas had a record number of residential homes sold in the second half of 2020, according to the latest Arvest Bank Skyline Report.
More than 5,700 homes were sold in Benton and Washington counties in the final six months of last year, easily surpassing the 4,910 homes that were sold in the second half of 2019.
Of the 5,726 homes sold, more than 1,400 were newly built residences.
Another 77 homes were sold in Madison County, which was included in the Skyline Report for the first time. The report, released Tuesday, is sponsored by Arvest Bank; the research is conducted by the Center for Business and Economic Research at the University of Arkansas’ Walton College of Business.
“The residential real estate market in the region is very strong right now, but the balance between supply and demand has certainly tipped in favor of sellers for the time being,” CBER Director Mervin Jebaraj said. “Thankfully, it appears that home builders are seeing the need for more supply and are reacting as the number of new building permits issued hit its highest level since the first half of 2006. Buyers are motivated by low mortgage interest rates, but those low rates are being somewhat offset by accelerating home prices.”
Accompanying record sales was a drop in inventory for the second half of 2020. The report said inventory of homes available for sale dropped 61% to 707; the average sales price for a home in Benton County increased 10.7% to $293,403 while the average Washington County sales price increased 11.8% to $268,987.
The report estimated that there was a 17.6-month supply of available lots in northwest Arkansas subdivisions. The report said there had been more than 12,700 lots approved for construction, which would push the inventory duration to nearly five years at the current rate of absorption.
There were more than 2,700 building permits issued for the three counties in the last half of 2020 with Benton County accounting for 1,574 and Washington County 576.
Vacancy rates in the multifamily market increased slightly to 5% for the region. It had been at 4.8% in the first half of 2020 and was 4.9% in the second half of 2019.
Vacancy rate fell in four of the five largest cities in northwest Arkansas. Bentonville’s vacancy rate jumped to 7.4% from 5% in the first half of 2020.
The report showed a large number of units approved or under construction in the area: 2,200 in Springdale, 3,400 in Bentonville, 4,100 in Fayetteville and 4,200 in Rogers.