Arkansas home sales start the year up 6.7%

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Home sales in Arkansas were up 6.7 percent in January compared with January last year, the Arkansas Realtors Association said.

There were 2,073 homes sold in January in the 43 counties surveyed, 130 more than January 2017.

"It looks like a pretty strong start for the year," Michael Pakko, chief economist at the Arkansas Economic Development Institute at the University of Arkansas at Little Rock, said Friday.

Typically, fewer homes are sold in January than other months of the year, Pakko said. For the past four years, January has accounted for only about 5.5 percent of homes sold during the year, he said.

But for the past few years, whatever happens in January has carried on for the rest of the year, Pakko said.

For example, sales in January 2014 were up 8.7 percent and sales for 2014 finished up 4.5 percent; sales in January 2015 rose by 5.1 percent and 2015 finished 10.6 percent up; sales for January 2016 grew 9.1 percent and gained 11.6 percent for 2016; and in January 2017, sales were up 7.8 percent and rose 5.1 percent for all of 2017.

"It's a pattern that seems to be true over the past four or five years, at least," Pakko said.

Another pattern is that January home-sales growth has declined for the past three years, said Mervin Jebaraj, director of the Center for Business and Economic Research at the University of Arkansas, Fayetteville.

Benton County led the state in the number of homes sold in January with 349. Pulaski County was next at 309 homes sold and Washington County followed with 218.

Home sales in Northwest Arkansas are still growing but at a slower pace, Jebaraj said. Building permits for new-home construction also are growing slower, he noted.

"It's all related to the fact that there are not as many desirable lots available," Jebaraj said. "There's plenty of land in Northwest Arkansas to build homes on but all of that land is not close to the parks [and trails and other amenities] that the cities have invested a lot of money developing."

Three counties had significant percentage growth rates in January.

Garland County had almost 55 percent annual growth in homes sold, Craighead County grew by about 46 percent and Crawford County had 34 percent annual growth.

"I would say that's pretty indicative of strong conditions [in those three counties]," Pakko said.

In 2017, there were 35,755 homes sold in Arkansas, a 5.1 percent increase over 2016 and a record high for home sales in Arkansas going back to at least 2006, the earliest the Realtors association has supplied data, Pakko said.

"That predates the [financial] crisis," Pakko said. The recession lasted from December 2007 to June 2009.

This should be a strong year for home sales unless interest rates begin to tick up, Pakko said. He said he doesn't expect any tapering off in sales until next year at the earliest.

Business on 03/17/2018

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