In August, California-based, RealtyTrac, named Arkansas’s housing market as one of the best for “good health and building real estate wealth.” But what does that mean for your potential investment, and what can a local real estate consultant tell you about the current market?
The population centers of the state—Central Arkansas, the Fort Smith area, Jonesboro/Northeast Arkansas and Northwest Arkansas—are primed for the strongest investment opportunities. Those seeking information about the housing market from a local consulting firm can gain access to a broad range of detailed data including a buy/sell analysis, highest and best use studies, and market selection assistance. Real estate experts at consulting firms work with investors to formulate buy-sell decisions, analyze development or redevelopment options, and form long-term portfolio strategies.
Arkansas real estate consulting firms, such as Ferstl Valuation Services, assist and advise investors, and to do so, a general overview of the housing market is a good starting point. Let’s take a look at Arkansas’s current market.
Home Sales and Prices
The Arkansas Economist has declared that the state’s housing market is in full recovery mode. Data provided by the Arkansas Realtors Association supports the contention as housing sales for September posted an 18.4% year-over-year increase. It marks the third consecutive month that year-over-year home sales volume has recorded gains of 18% or more.
Home sales transactions for the past month dropped from the peak activity level reached during the summer, which is standard for September sales activity. However, total sales represent the most for the month of September since 2009 and the best performance for a September month since 2006. Real estate consulting firms routinely evaluate data, such as housing starts and home sales activity to provide clients another layer of analysis and a better feel for the marketplace.
The regional differences in home sales activities are just as diverse as the state’s landscape. While Little Rock experienced a 2% year-over-year increase, sales in Fayetteville decreased 17.4%, and Fort Smith declined 24.5%, according to data provided by the real estate website Trulia.
Arkansas home prices, which peaked in early 2007, did not have the same level of decline as the rest of the U.S. Currently, price gains lag behind the national average. Values are 5.6% off peak prices compared to the national average of 17.6%, according to the Federal Housing Finance Agency. Since the second quarter of 2011, home prices have risen 9.5%.
State’s Economic Conditions
The nation’s economic recovery from the Great Recession (December 2007 – June 2009) has been weak, but growth has been even slower in Arkansas. At a recent economic conference, Michael Pakko, the chief economist for the Institute for Economic Advancement at the University of Arkansas at Little Rock, describes the Arkansas economy as being “on the high side of a slow growth scenario.”
Pakko projects a moderate rate of growth for the economy over the next few years, with 2.6% growth in 2013, 2.7% in 2014 and 3% in 2015. He expects personal income, which grew 5.3% in 2012, to grow 2% in 2013, 4.1% in 2014 and 4.5% in 2015.
Putting It All Together
Real estate markets are drastically different from state to state and city to city. Without understanding which figures from all the available data are most relevant to your investment plans, you could be making a true real estate investment blunder. While a broad overview of market’s climate can give some insight, an expert from a local consulting firm can provide the detailed, critical information necessary to making wise investments. From demographic reviews and market studies, to full due diligence investigations, contact the experienced Arkansas real estate consulting professionals at Ferstl Valuation Services for assistance with your next real estate endeavor.