Let’s take a quick snapshot of today’s market compared to where we have been. Reviewing inventory, average days on the market, price per square foot, price appreciation, and with a forward look at residential new construction permits.
Beginning with the number of active residential listings in Northwest Arkansas in November 2022, it was 3,168, and in November 2023, there were 3,365, a 6% increase. While inventory is up, the number of closed sales is almost identical: 691 closed in November 2022 and 690 closed sales in November 2023.
Regarding average days on the market, we saw an increase of 8 days compared to last year. This is in line with the national increase of days on the market. Keep in mind that the average days on the market were 93 days just ten years ago, in 2013.
In regards to price per square foot (sqft), we have experienced a 9% increase in sqft from $195 to $213 per sqft. Washington County’s Median sales price had a 3% increase from $324,900 to $335,000. Benton County outperformed Washington County by a 5% increase, with a median sales price of $347,000 to $365,000.
A great way to forecast is by looking at building permits. NWA experienced a 5% decrease compared to the same year-to-date time period in 2022. Although there seems to be a recent bright spot on the horizon, there was a 30% increase in October. We will continue to track this to see if it will be a continued trend moving forward. Considering our low inventory levels, this is a hopeful positive sign going into 2024.
The Northwest Arkansas market continues to outperform national standards. However, we have faced challenges this year and will continue to face similar challenges going into early 2024. These challenges will present themselves as low inventory numbers keeping prices elevated, interest rates still hovering around 7%, and first-time home buyers meeting greater lender requirements than in the past. While these challenges may continue to exist early in 2024. All indications show interest rates will continue to decline slightly, which will inevitably help unlock the inventory that has kept sellers stuck in 2023 while increasing inventory with a more balanced market in 2024.
Sources:
Census.gov
Northwest Arkansas Board of Realtors
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