2023 – The Year of Extremely Volatile Interest Rates

Jan 3, 2024

It was seemingly the story the entire year. Rates hit their highest in about two months, go just over 8%, give or take, and are currently in the 6’s with buy-down options into the high 5’s with good credit. Simply put- the cost of ownership has risen. Homeowners insurance nationwide has risen about 20%, and the counties reassessed your home value. Everyone saw increases on those so donโ€™t be shocked if your escrow account is low; youโ€™ll be getting a notice very soon with your new payment.

๐™ƒ๐™š๐™ง๐™š ๐™ฌ๐™š ๐™œ๐™ค, ๐™ฉ๐™ž๐™ข๐™š ๐™›๐™ค๐™ง ๐™ฉ๐™๐™š ๐™‰๐™๐™ˆ๐˜ฝ๐™€๐™๐™Ž.

๐’๐ข๐ง๐ ๐ฅ๐ž-๐Ÿ๐š๐ฆ๐ข๐ฅ๐ฒ ๐ก๐จ๐ฆ๐ž ๐ฌ๐š๐ฅ๐ž๐ฌ ๐จ๐ฏ๐ž๐ซ ๐Ÿ ๐ฆ๐ข๐ฅ๐ฅ๐ข๐จ๐ง ๐๐จ๐ฅ๐ฅ๐š๐ซ๐ฌ- ๐Ÿ๐Ÿ”๐Ÿ• this year. 2022 had 253. The average accepted sales price this year is 99%, down from the 102% average accepted price last year.

The ๐“๐Ž๐ ๐“๐‡๐‘๐„๐„ Most Expensive Single-Family Sales:

1. The castle. Yes, that one. The Dromberg finally sold. 4.8 million. ๐ˆ๐ญ ๐ฐ๐š๐ฌ ๐จ๐ซ๐ข๐ ๐ข๐ง๐š๐ฅ๐ฅ๐ฒ ๐ฅ๐ข๐ฌ๐ญ๐ž๐ ๐ข๐ง ๐’๐ž๐ฉ๐ญ๐ž๐ฆ๐›๐ž๐ซ ๐จ๐Ÿ ๐Ÿ๐ŸŽ๐Ÿ๐Ÿ•, yes, 2017 for 8.6 million. It was actively listed for 2,356 days during that time.

2. A stunning 8,000 sq ft home lake property on Beaver Lake. It took nearly a year to sell and closed at 4.2 million with an original listing price of 6.95 million.

3. A highly unique 7,000-plus-square-foot home on Dead Horse Mountain with 165 acres, complete with a race track and shops for 4.25 million.

๐˜ผ๐™ซ๐™š๐™ง๐™–๐™œ๐™š ๐™จ๐™–๐™ก๐™š/๐™ข๐™š๐™™๐™ž๐™–๐™ฃ ๐™จ๐™–๐™ก๐™š ๐™›๐™ง๐™ค๐™ข 2023 compared to 2022. 2022 ๐™ฃ๐™ช๐™ข๐™—๐™š๐™ง๐™จ ๐™ฉ๐™ค ๐™ฉ๐™๐™š ๐™ง๐™ž๐™œ๐™๐™ฉ ๐™ฉ๐™ค ๐™˜๐™ค๐™ข๐™ฅ๐™–๐™ง๐™š ๐™ž๐™ฃ ๐™ฅ๐™–๐™ง๐™š๐™ฃ๐™ฉ๐™๐™š๐™จ๐™ž๐™จ are strictly single-family homes. No condos/multi-family etc included.

Bella Vista- 379k average, 349k median (362/340)

Bentonville- 524k average, 450 median. (504/420)

Cave Springs- 552k average, 520 median. (484, 475)

Centerton- 382k average, 335 median. (380/330)

Rogers- 486k average, 375 median. (457/399)

Lowell- 423k average, 350 median. (334/298)

Springdale- 378k average, 339 median. (360/315)

Fayetteville- 452k average, 372 median. (421/355)

๐€๐‹๐‹ ๐š๐ฏ๐ž๐ซ๐š๐ ๐ž ๐ฉ๐ซ๐ข๐œ๐ž๐ฌ ๐ฐ๐ž๐ซ๐ž ๐ฎ๐ฉ ๐›๐ฎ๐ญ ๐ง๐จ๐ญ ๐ง๐ž๐š๐ซ๐ฅ๐ฒ ๐š๐ฌ ๐ฆ๐ฎ๐œ๐ก ๐š๐ฌ ๐ญ๐ก๐ž ๐ฒ๐ž๐š๐ซ๐ฌ ๐ฉ๐ซ๐ข๐จ๐ซ. Our market is pretty resilient when you consider rates doubled and prices still went up. 40% of homeowners own their home outright, and a vast majority have mortgages under 5%. Itโ€™s something crazy high, like 80% or so. Good inventory is low due to that, which makes perfect sense.

Below are the transaction counts for the above in 23 vs 22. Itโ€™ll make some sense of the paragraph you hopefully just read

Bella Vista- – ๐Ÿ,๐Ÿ๐Ÿ๐Ÿ–/2022 1,200 ๐Ÿ”.๐Ÿ–% ๐๐ž๐œ๐ซ๐ž๐š๐ฌ๐ž

Bentonville- ๐Ÿ,๐Ÿ’๐Ÿ‘๐ŸŽ/2022 1,390 ๐Ÿ.๐Ÿ–% IอŸNอŸCอŸRอŸEอŸAอŸSอŸEอŸ

Cave Springs- ๐Ÿ๐Ÿ’๐Ÿ”/2022. 142

Centerton- ๐Ÿ•๐Ÿ’๐Ÿ‘/2022. 917 ๐Ÿ๐Ÿ—% ๐๐ž๐œ๐ซ๐ž๐š๐ฌ๐ž

Rogers- ๐Ÿ,๐ŸŽ๐Ÿ’๐Ÿ‘2022 1244 ๐Ÿ๐Ÿ”% ๐๐ž๐œ๐ซ๐ž๐š๐ฌ๐ž

Lowell- ๐Ÿ๐Ÿ“๐Ÿ•/2022 398 ๐Ÿ”๐ŸŽ.๐Ÿ“% ๐๐ž๐œ๐ซ๐ž๐š๐ฌ๐ž

Springdale- ๐Ÿ—๐ŸŽ๐Ÿ“/2022 1,138 ๐Ÿ๐ŸŽ% ๐๐ž๐œ๐ซ๐ž๐š๐ฌ๐ž

Fayetteville- ๐Ÿ,๐Ÿ“๐Ÿ“๐Ÿ’/ 2022 1,647 ๐Ÿ“.๐Ÿ”% ๐๐ž๐œ๐ซ๐ž๐š๐ฌ๐ž

With rates on a somewhat recent steady decline the last couple of months, I think 2024 could be a bit wild personally if they continue to drop. It’s hard to predict but there are a ton of people who were simply priced way out when rates hit over 8%. The good news for buyers with decently higher rates than last year is it’s hard to make an investment property cash flow with a regular investor down payment. Investors and investment companies were brutally hard to compete with when rates were in the 2,3’s and 4’s. Investment rates are also higher than the owner-occupied rates you often see publicly shared. Your competition today is not an investor but it’s another regular buyer. With limited good inventory, it’s still a sellers market with roughly 2.5 months of supply. Concessions are a bit easier to come by, which is a welcome sight.

 

Researched and Written by: Chase White- Northwest Arkansas REALTORยฎ