Home sales improve from first quarter of 2008, but still slow
Posted on Thursday, August 21, 2008
More houses were purchased and occupied in the second quarter of this year than the first, but the Arvest Bank Second Quarter Residential Skyline Report shows that new construction numbers continued to reflect the slowdown in supply to the marketplace.
About 900 homes in Northwest Arkansas were occupied during the second quarter of 2008, about 102 more than last quarter. Washington County saw a 15. 5 percent decrease in the amount of unoccupied homes from last quarter and a cumulative decrease of 30. 3 percent during the last 12 months. Overall, there are still 1, 566 unoccupied homes in Northwest Arkansas, down from 1, 889 last quarter. Meanwhile, construction of new homes is still slow.
"We've continued on a trend that is significantly slowing construction activ- ity," said Kathy Deck, director of the University of Arkansas' Center for Business and Economic Research. "We're far down below peak values of new construction."
There are some positive facts in the report. Building permits are still being issued, despite slowing down from 744 issued in Northwest Arkansas last quarter to 416 issued this quarter. Rogers accounted for the most permits in Benton County as 70 permits were issued for new homes in that city. Bentonville issued 64 permits. Fayetteville had the most in Washington County with 113 issued permits, and Springdale followed with 40. Building permits serve as a good indicator of future growth as obtaining permits is one of the beginning steps in the construction process Homes are still being purchased but at a comparatively slow rate. According to the report, existing home sales declined 25 percent this quarter from the second quarter of 2007 as 1, 307 existing homes were sold in Benton and Washington counties. The average price per square foot fell 6. 2 percent in Benton County to $ 89. 26 and was down 2. 9 percent in Washington County to $ 96. 15 during the last 12 months. The existing home market reflects national and regional trends.
Deck said the abundance of empty houses has been a dampening force on the price appreciation for existing, non-new houses.
Deck said there doesn't seem to be an end in sight for the slower market and that the solution to correct the market is more job growth in Northwest Arkansas.
"I sound like a broken record, but it's all about job growth - strong job growth," she said.
She said more jobs grow a population, which fills empty houses.
The Skyline Report is a quarterly analysis of the real estate market in Benton and Washington counties. The report is funded by Arvest Bank and conducted by the Center for Business and Economic Research in the UA's Sam M. Walton College of Business. Skyline researchers use data from local governments, property managers, visual inspections and the business media.
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