Northwest Arkansas home sales surge 14%
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Despite higher interest rates, more than 5,300 homes sold in Northwest Arkansas during the second half of 2024.
The big picture: The total marks a 14% jump from a year earlier, making it the third-highest half-year number recorded in 20 years by 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 maintain their quality of life.
- Lower- and middle-range wage earners in the area have found it increasingly difficult to buy or rent living space.
Zoom out: Nationwide, a shortage of "affordable" homes means buyers compete for the cheapest ones, pushing up prices, Axios' Emily Peck writes.
By the numbers: The average selling price for a single-family home during the second half of 2024 in Benton County was $449,750, up 7% from a year earlier. It was $402,322 in Washington County, up 4%.
- Those prices are up more than 120% from a decade earlier.
- Newly built homes made up nearly 40% of sales for the second half of the year — 2,058 homes — a record in Skyline's data.
Multifamily vacancies in NWA were at 3.3%. Skyline authors say this was driven by 506 new multifamily units added during the six-month period, with a total of 1,533 new units added during calendar year 2024.
- Average lease rates for multifamily housing rose to $1,075, up nearly 7% year over year.
What they're saying: "Despite the headwinds caused by higher interest rates and the new legislation concerning NAR [the National Association of Realtors] at the end of the summer, the residential market in Northwest Arkansas remained steady throughout the end of 2024," Rob Lambert, real estate agent for Collier & Associates, told Axios.
- "Unfortunately for most families, prices will continue to rise as long as inventory remains low," he added.
Homeowners are opting to stay in their homes to avoid mortgage interest rate increases, which leads to fewer homes being for sale, Mervin Jebaraj, director of the Center for Business and Economic Research (CBER) at the University of Arkansas in Fayetteville, said in a news release. Arvest Bank contracts with CBER to produce the Skyline Report.
- "However, strong population growth is fueling new homes being built, and this is driving growth in overall sales," he said.
Reality check: Nearby smaller cities experiencing rapid growth are facing infrastructure limitations that "may shift the location of future development without some major infrastructure investments," Jebaraj said.
What we're watching: Residential building permits climbed to 3,007 for the six-month period, the highest amount recorded by the report since 2006 and a measure of what the market can expect in the near future.
- Nearly 2,100 of those permits were in Benton County and 930 in Washington County.
Multifamily building permit value — another broad measure of activity — was valued at $523.8 million across 31 projects during the second half of 2024.