Northwest Arkansas Home Prices and Market Report – February 2009
March 4th, 2009 categories: Market Conditions
February saw the ratification of the stimulus package by President Obama and a deepening of the recession with the national unemployment rate rising to 7.6% in January, up from 7.2% in December of 2008. Arkansas’ unemployment stood at 5.7% in December 2008. These factors, along with the continuing housing market issues caused sales prices in northwest Arkansas to drop in February. Read below for a detailed analysis of home prices in Northwest Arkansas.
Northwest Arkansas Home Prices and Full Market Report
The total number of homes on the market in Northwest Arkansas went down from 5518 in January to 5423 in February. Mostly because the number of sold and pending properties went up dramatically. This is both because there are more foreclosures on the market and because sales tend to cycle up in February. This increase in pendings and solds is definitely a good sign that absorption rates should get lower in the coming months. The average sale price in Benton and Washington counties was a whopping $137,521. Again, this number is skewed significantly lower because of the high rate of foreclosure sales in our area right now. You can begin to understand what I mean when you see the difference in the price per square foot ($/sq.ft.) of Current homes at $110.22 vs. the sold price per square foot (Sold $/sq.ft.) for Sold homes at a mere $75.40. Check out January’s Numbers for reference.
Here are the February numbers broken down by major city:
Bentonville has the lowest inventory around with 542 homes available to purchase but also has the highest days on market for Sold properties. Note that the Sale Price to List Price ratio hovers between 95% and 97% for each town in Northwest Arkansas. It is easy to tell the cities with the high rates of foreclosure sales from the difference between the average list price of current properties and the average sale price of sold properties.
Check out the graphs below that I will be adding to with each new month of data.
Northwest Arkansas Pendings, Solds, and Expireds by Month for 2009
Current Inventories in each Northwest Arkansas City by Month
Average Days on Market by City
The average days on market are calculated using sold, not current, properties. The reasoning behind this is that only sold properties are a good measure of days on market because they have been priced correctly in the market to sell. Again, this number is somewhat skewed by the mix of normal properties for sale, and foreclosures that are selling.
Absorption Rates by Price Range
The absorption rate is the number of homes on the market at the end of the month, divided by the average number of home sales in that price range over the past three months. I personally feel that a three month average for homes sold give a very accurate indicator of current absorption rates. Many economists and analysts will tell you to average the previous twelve months of sales data but when markets are changing as fast as today’s markets are…you have to go with a shorter period to make the data relevant.
As you can plainly see…absorption rates for more affordable housing are much lower than the higher price ranges. Make sure and take this into account when pricing your property for sale. The higher the absorption rate…the more aggressive you must price your property to get it sold in a timely manor.
These numbers will continue to enlighten us over the next few months as our graphs fill out further. Compare these numbers with those of other months in 2008 and 2009 in our market conditions category.
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