May 07 2009
Arkansas housing market report for March 2009
Apparently, the National Association of Realtors (NAR) is on to something — a lot of people purchasing homes are first time homebuyers and are picking up properties in lower price ranges.
The March 2009 housing market report for Arkansas (click the link to download your own copy in Excel) issued this morning by the Arkansas Realtors Association reveals at least two things. The rate of decline in sales in March slowed down a bit and average prices continued to decline.
The March report shows that there were 1,752 single family, residential homes sold in that month — down 20.2 percent from sales in March 2008 but a bit of an improvement over the 22.8 percent decline in sales reported through March. Furthermore, the sales in March topped the 1,532 homes sold in February (for a copy of the February report, click here ).
The NAR says that close to half of all people purchasing homes are first time homebuyers and Arkansas Realtors are reporting increased activity among people in that category, too. According to both the NAR and Arkansas Realtors, first time homebuyers are attracted to the market because of both the first time homebuyers tax credit and low mortgage rates.
Mortgage interest rates are at an historic low and have been for most of the year. As for the tax credit, people who haven’t purchased a home in the past three years are eligible to receive up to $8,000 in cash through the IRS on their 2009 income tax returns. A first time homebuyer, according to the IRS, is anyone who hasn’t owned a primary residence in the past three years. The credit applies to homes purchased from Jan. 1 through Nov. 30.
The March average sales price of $139,154 represents a decline of 6.9 percent from the $148,633 average a year ago, but that comes as no surprise. There has been downward pressure on prices for close to two years and a lot of those first time homebuyers are shopping in the lower price ranges. Additionally, there are still a few foreclosures dragging down average sales prices and some new homes being offered up at low prices in order to attract buyers.
A number of Arkansas real estate agents have mentioned that we’ll know the housing market is on the road to recovery when we see more activity at those lower price ranges. While it’s too early to say for sure whether we’ve got enough activity to spark a recovery, the March housing market report is encouraging.
