Rusty Armstrong

The residential sales trends for the Little Rock, Arkansas area continue to move every slowly in a positive direction in most all areas at the end September. Homes that are in good condition and price right are selling in a reasonable time.. Supply continues to move slowly down ward and sales move upward slowly which has been a trend over the last few months.The absorption rate remains under six months for the total area and of the eleven areas monitored all but four had an average days on market of under 90 days. The areas with the longest absorption rate continue to be West Pulaski County and the Chenal area, along with the Jacksonville are both with a eight to nine month supply of homes on the market. Both these areas continue to see improvement on earlier months numbers.

Looking at how the market is doing by price range shows two different markets. In prices from $100,000 to $400,000 absorption rate is under five months and above $400,000 it is just under 14 months. Some factors causing this gap are financing for loans over $415,000 is getting better but is still at a higher rate and more difficult to get than loans under that amount. First Time Buyer Tax Credit continues to help make sales good below the $250,000. Time will tell how the market is affected if the tax credit is not extended past the November 30 end date.

The Arkansas REALTORS Association report of September 14th shows that the average list price on homes continues to slide slightly and the number of homes listed has increased over last month but are still below the highs reached this year. Here in Central Arkansas the list price number has remained level for a few months and so has the listing inventory. In their post about this report the REALTORS point out the importance the First Time Buyer Tax Credit has had on these numbers and the market. The most active price range has been around $150,000 and below, which is the prime first time buyer market. Our reports on Absorption Rates in the Little Rock area shows positive trends in the Little Rock area for average days on the market.

The Market Absorption Rate continues to move down at the end of August in almost all areas. Out of the eleven areas that are followed in the Little Rock area all but 4 have a listing inventory of under six months and a average days on market of 90 days are less. West Pulaski county, which includes the Chenal area, remains the area with the biggest inventory but this area may have improved the most over the last few months. It has gone from an absorption rate of over a year to now a little under ten months. These trends have been slow but consistent positive trends each month. Low rates, first time buyer tax credit and good value in homes continue to push these trends.

The trend of increase sales in the Little Rock area in a 6 month period continues for the second month at the end of July. Sales were up 17% over the 6 month period ending in June. Sales were up in every market area. The number of properties for sale also continued to increase but only by a 7% rate which is much smaller than the 30% increase last month. The Chenal area which early in this year was very slow and had a very high absorption rate of over a year has improved over the last few months. It now has an absorption rate of just under 10 months. Over half of the areas have an absorption rate of at or under 6 months. This means an average days on the market of around 90 day, which is not a bad market at all. In fact only west Pulaski County, Chenal, and Jacksonville areas have an average days on the marke of over 120 days.

Hopefully we will see these trends continue. Positives continue to be low interest rates on conforming loan, first time buyer tax credit, and a better market of jumbo loans. With these in place and no unforeseen changes these trends should continue.

The market for homes selling in Little Rock most active areas show increases in the number of sales for 6 months in all areas that are followed except for the Jacksonville which was down. The areas of Little Rock without Cabot and Jacksonville increased by 11%. There was also an increase of number of listings that are on the market for sale, up 31%. So even though sales were up the Absorption Rate and Average Days on the market increased in all areas accept for the Chenal and west Pulaski County area which decrease. Even with this decrease this area remains with the highest Absorption Rate but still good news for that market.

What does this mean for buyers and sellers in our area? I think it shows that buyers are becoming more confident and are becoming more active. The number of homes on the market increasing is because of a lot of factors probably. Seller's seeing more sales are more confident to put homes on market, employment changes in our market, and a normal time of year when listings increase are all factors that may have contributed to the increase in listings. The trend had been down for active listings till this month. If this is a trend or just a one month adjustment will need to be followed at the end of July.

Absorption Rate Through June 2009