Mar 20, 2024 - News

Skyline Report: Northwest Arkansas home sales and prices dip

Data: Arvest Skyline Report; Chart: Axios Visuals
Data: Arvest Skyline Report; Chart: Axios Visuals

Northwest Arkansas home sales slowed in the second half of 2023, as area homeowners avoided moving and paying higher interest rates.

  • The number of homes sold was down 2% from a year earlier and prices dipped slightly, according to the biannual residential Arvest Skyline Report released Tuesday.

Why it matters: Housing prices and rents in part determine who can afford to live in NWA and the wages they need to earn to maintain quality of life.

Lower- and middle-range wage earners in NWA have found it increasingly difficult to buy or rent living space.

The big picture: Nationwide, this is the least affordable housing market for first-time buyers in more than four decades, Axios' Emily Peck writes.

  • The monthly payment for a typical mortgage rose to 40% of a buyer's household income last year, the highest rate since the 1980s.

By the numbers: The average selling price for a single-family home during the second half of 2023 in Benton County was $420,144, down nearly 0.6% from six months earlier. It was $386,695 in Washington County, down 1.4%.

  • Yes, but: Those prices are up 123% in Benton County and 110% in Washington County from a decade earlier.

Caveat: Nearly 40% of the 4,674 NWA homes sold in the second half of the year were new construction. On average in the NWA market, a new home sold for $399,782, the report states.

  • Inventory for available existing homes jumped nearly 263% — from 584 at the end of 2021 to more than 2,100 at the end of 2023.

Multifamily vacancies in NWA rose slightly to 3.1% at the end of the year from 2.2% in mid-2023. Skyline authors say this was largely due to 1,700 new units at 10 apartment complexes becoming available.

  • Stunning stat: Average rent prices topped $1,005 per month in NWA, up 27% from just the beginning of 2022.

What they're saying: "As the region continues to grow [in] population, a coordinated approach to redevelopment among the four big cities would go a long way towards solving many of the housing issues and disruptions from unplanned growth we are experiencing," Mervin Jebaraj, director of the Center for Business and Economic Research at the University of Arkansas in Fayetteville, said in a news release.

What we're watching:
2,534 residential building permits — a broad measure of how much construction is underway — were issued in the second half of 2023, up from 2,309 at the end of June.

  • Multifamily building-permit value — another broad measure of activity — was $256.4 million at 19 different apartment complexes during the second half of last year.

The bottom line: Though initiatives are underway to build more attainable housing and educate investors about options, measures are limited and relief for lower-income workers is likely still years away.

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