Mar 15, 2023 - Real Estate

Northwest Arkansas home sales slowed in second half of 2022

Average selling price for a home in NWA
Data: Arvest Skyline Report; Note: Data for H2 2019 and H1 2020 were not provided; Chart: Axios Visuals

Home sales are slowing and prices show some signs of leveling off in Northwest Arkansas.

  • Yes, but: Rent continues to climb.

Driving the news: The biannual single-family and multifamily residential Skyline Report for the second half of 2022 was released to the media Tuesday.

  • The number of homes sold in NWA dropped nearly 21% during that time, compared to the first half of last year.

The big picture: Even with the Fed's recent interest-rate hikes intended to curb inflation, consumers are still spending on goods and services.

  • But real estate — typically a family's largest expense — has slowed since mid-2022 as mortgage rates increase the overall cost of owning a home.

Threat level: NWA's multifamily vacancy rates are at a record low — 1.6%, down from 2.3% in the first half of last year, according to the report. Rent is at an all-time average high of $926, up 7.6% from $860 in June.

Why it matters: Housing prices and rent amounts largely dictate who can afford to live in Northwest Arkansas and the wages they need to maintain a reasonable quality of life. In recent years, lower- and middle-range wage earners have found it increasingly difficult to buy a home or rent living space in NWA.

By the numbers: The average sales price for a single-family home during the second half of the year in Benton County was $401,875, down about 0.5%. It was $376,924 in Washington County, up 3.6%.

  • Inventory was higher, with 1,618 homes listed for sale in NWA at the end of December, up from 584 a year earlier.
  • There were 2,115 residential building permits — a broad measure of how much construction is underway — issued in the last half of 2022, down from nearly 2,900 six months earlier.
  • Multifamily vacancies got even tighter in the period, led by Fayetteville with only a 1% rate. Springdale (1.5%), Bentonville (2.3%), Rogers (2.4%) and Siloam Springs (5%) followed.
  • Multifamily building-permit value — another broad measure of activity — was $333 million, down from $371 million as of June 30.

What's next: Skyline data on the commercial real estate market is due out in April.

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