The number of homes sold in northwest Arkansas dropped 8.8% in the first half of 2023 compared to the second half of 2022, according to the Arvest Bank Skyline Report.
The report, released last week, said that 4,422 homes were sold in Washington, Benton and Madison counties. That was a decrease from 4,774 sold in the second half of 2022 and from 4,848 a year ago.
The Skyline Report is sponsored by Arvest Bank with research conducted by the Center for Business and Economic Research at the University of Arkansas’ Walton College of Business.
“The northwest Arkansas residential real estate market has been so red hot over the past decade as steady and increased demand for housing has created almost a perpetual seller’s market with the average price of purchased homes more than doubling in the past decade,” said Mervin Jebaraj, the director of the CBER. “Now the interest rate increases have slowed the pace of price increases to single digits and the number of home sales has declined as both buyers and sellers are worried about the impact of high interest rates and still-high home prices.”
The average price of a home in the area continued to rise. In Benton County, the average sales price was $423,564, up from more than 5% from the second half of 2022 and more than 77% from five years ago.
In Washington County, the average home sold for $392,306, up 4.3% from the second half of 2022 and 67% from five years ago.
There were 2,309 home building permits in the first half of 2023, an increase from 2,117 in the second half of 2022 but down from 2,892 in the first half of 2022. The report said there were 1,591 homes for sale in the first half of 2023, down slightly from 1,618 in the second half of 2022.
The multifamily vacancy rates for the region rose to 2.2% from 1.6% the previous half year and a slight increase from 2.3% in the first half of 2022. The average monthly rental lease rose to $952.17 from $926.55 in the second half of 2022.
The report said there were $263.1 million in multifamily building permits in the first half of 2023, down from $333.2 million in the first half of 2022. Rogers has approximately 6,900 multifamily units in development or under construction, while Fayetteville and Bentonville each have approximately 4,600 units.
“Even with so many new apartments coming into the market, the vacancy rate continues to be extremely low,” Jebaraj said. “In essence, vacancy rates this low are, as I said of the previous report, functionally zero. Of the 972 new units that became leasable during the first half of the year, only 322 had not been leased by the end of the reporting period. And the average price for an apartment home continues to rise — increasing double digits year-over-year to over $950 per month.”