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NWA Market Statistics for September
Fall has officially started, and it’s starting to reflect in the data. The overall sales dollars and total closed transactions are down from last month as we enter the slower months for real estate sales. Prices saw very marginal changes from August. Only a 1.5% increase in median sales price and the price per square foot actually saw a $2/SQFT decrease from last month. Both signs the drastic increases in property values are stabilizing. Median days to sell increased by 7 days from last month 62 days, but this is still historically low for NWA.
For the 5th straight month, the ratio of sales price to the original list price has been 100%...meaning generally speaking, sellers are not having to make concessions on the purchase price to sell their properties. The months of inventory (MOI) held steady at 4 for the 3rd straight month. This is partly due to the 17.1% decrease in new listings being all but matched by the 16.5% increase in expired listings, and new listing only saw a slight change. While we cannot know the number of active buyers in the market, the fact that MOI has not changed means we know the market supply of properties and the buyer demand are changing in direct correlation with each other.
With the ratio of sales price to original list price remaining high and MOI remaining well below 12 months indicates we are still firmly in a seller’s market (to no one’s surprise). Interesting to note, NWA has been in a seller’s market continuously for more than a decade! In fact, only 3 of the last 130 months have even reach 8 months of inventory on the market (no month surpassed 8 in that time frame)…meaning in the last decade we haven’t even approached the general rule-of-thumb “transition point” of 12 MOI; at which point we tend to say the market has shifted more to a buyer’s market. Similarly, the fact that the sales price to original list price ratio has only been below 95% ONCE in the last 130 months (94.8% in Jan 2014) is more proof sellers have largely been in control of the market since before 2013.
That pretty much sums up the important points for the NWA market statistics for September. All in all, it’s as expected for this time of year. If you have any questions about the market, reach out!
With the cyclical nature of real estate sales, we will see the gradual slowing of the market through the fall and winter months. As the final full-month of summer, August still held strong. Generally speaking, August statistics were pretty neutral, in a safe and stable sense. Any signs of major shifts in the market are not evident in the fact that August slightly outperformed July in dollars and sales, and there were only marginal changes in all three of the listings categories (new, active, expired). In fact, no metric saw a double-digit percentage change from the prior month. Total sales dollars was the closest statistic to a double-digit change with an increase of 8.5% over July.
In terms of any 12-month changes, the only double-digit change of significance is total closed sales with a decrease of 12.6%; given the 150 fewer sales than August of 2022. (We don’t consider the 12-month percentage change of months of inventory and days to sell significant, because even a 1-unit change in these metrics yields a double-digit percentage change. Not to mention, both of those market performance indicators are still historically low.)
As has been broadly true for 2023 versus 2022 so far, values are up (median sale price and price per SQFT), but pace (closed transactions) has been slightly down. In fact, only one month of 2023 has surpassed the number of sales for the same month of 2022 (May).
All in all, NWA is humming right along. For a statistic enthusiast, this was actually pretty boring month to talk about, but for the health of a real estate market, it’s a good place to be. If you have any questions about the NWA market or if any of us at Acquire Realty can do to help you on your real estate journey, please reach out!
As I teased in the July Market Statistics update, I dug into the data for Residential New Construction in NWA and found significant changes over the last 10 years (2013 to 2023). In the most broad statement I can make, new construction has *boomed* in NWA over the last decade; with an especially significant jump in activity levels starting in 2021. We’re talking multiple triple-digit percent increases over that time…some metrics saw over a 500% increase! This is all in response to keeping up with demands from population growth in the area, investors scooping up investment properties during historically low interest rates, and existing homeowners scaling-up to larger properties. Just yesterday, I had a meeting with a mortgage broker, and she was telling me how NWA is still 20,000 housing unit short of the supply needed for the projected growth. This is yet another clear indicator new construction trends will continue to be strong.
One quick note, the data for 2023 includes only January to July. None of the numbers mentioned for 2023 are extrapolations or projections of annual numbers; unless it is specifically indicated as “estimated” or “pace for 2023” for the year. This is to say, take the 2023 numbers with a grain of salt knowing they will obviously be different to end the year. To make it easier to digest, I broke the statistics down into 3 main sections: counts, dollars, and county (corresponding to the 3 rows of the graphic); breaking each of those categories down further into a few subcategories. For those who would rather scratch their eyes out than read through a bunch of statistics, stop here and enjoy the graphic. It tells the majority of the story. For those that love the numbers, let’s dive in!
2013 averaged less than 90 new construction properties sold per month. Through July 2023, we average just over 300 sold per month. That’s 3.5 times more than a decade ago. During that time, NWA still averaged less than 200 new construction sold per month until 2021 (230 sold/month in 2021 and 250 sold/month in 2022).
In 2013 new construction made up about 13.5% of all residential sales. As of the end of July of this year, new construction made up 34.2% of all residential sales. Meaning, new construction makes up 2.5 times more of all sales in NWA as it did 10 years ago. New construction went from barely being 1 out of every 8 sales to being 1 in every 3 sales! New construction made up less than 20% of sales up until 2021, when it finally made up 21% (and 25% in 2022).
For 2013, the median sales price of new construction was $222,900. Whereas the median sales price for 2023 through July is $357,175; a 160% increase. Last year was the first time in NWA the median sales price for new construction surpassed the $300K mark; when it set the benchmark of $341,495. In fact, just in the last 2 years, the median sales price has increased a staggering $82K; an increase that prior to 2021 had taken more than a decade to be realized.
Ten years ago, the average price per square foot for new construction was $106/SQFT; a dreamy number now long extinct in NWA. Compare that to through July 2023, the same metric came in at $201/SQFT. That’s an annual inflation rate of about 6.5% per year; well outpacing the 3% to 4% inflation of construction materials during that same 10-year span. However, the majority of this increase (64%) has occurred since 2020. In fact, the average price per square foot was still under $150/SQFT until 2021 ($168/SQFT in 2021 and $196/SQFT in 2022).
2013 had an average just under $22M per month in sales of new construction homes. This year NWA is averaging $123.5M per month. That’s a whopping 564% increase! In fact, this year 1 in every 3 dollars of closed residential real estate in NWA is from new construction. If the pace for 2023 continues, it will be the first year new construction made up more than 30% of total sales dollars. Another couple notable fun-facts are 2022 was the first year new construction total sales surpassed ONE BILLION dollars in NWA; and in just the first 7 months of 2023, NWA has almost matched the total new construction sold for the entire year of 2021! Not surprisingly, 2023 is on pace to set another record year (an active 10+ year streak) for total dollars of new construction at an estimated $1.5 Billion.
Benton County averaged 62 sales per month for new construction in 2013, but as of July, the county is averaging 211 sale per month for 2023; 3.4 times more. There has never been a year when Benton County averaged more than 200 new construction sales per month, but if the current trend continues, 2023 will do just that. Benton County has accounted for between 62%-70% of all new construction sales every year for the last 10 years.
Washington County, always in the economic shadow of Benton County, only averaged 26 sales per month of new construction; which has increased to an average of 95 sales per month in 2023. Still a very respectable 367% growth over the decade. In fact, Washington County had never had a single month with more than 100 closed residential new construction properties until May of THIS YEAR. Each of the last 10 years, Washington County has accounted for between 25% to 36% of all new construction sales.
Depending on the year, approximately 0.2% to 3% of new construction sales listed in the NABOR MLS occurs outside of Benton or Washington counties. But generally speaking, for every 3 new construction houses sold, 2 occur in Benton County, and 1 in Washington County. Or in other words, for every 2 houses built in Benton County only 1 is built in Washington.
As a complete side note, in doing this research I found a listing with a significant error; that skewed the data 5,000% of one month. After providing all information to the MLS about the error, the MLS corrected the listing. If nothing else, I’m thrilled to say this research yielded an actual result (even if I’m the only person that will ever look up the statistic).
Can’t believe it’s already time for another monthly statistics update for NWA…It felt like July flew by! After hitting the record-high in total sales dollars in NWA in June, we saw a 20% drop in total sales for July. Or to put it another way, almost a $100M reduction in sales volume. This tightly corresponds to the 14.5% decrease in the number of closed residential transactions last month.
Outside of those 2 metrics, the other statistics were within a reasonable margin of change expected during the June to July time frame; when the annual sales cycle tends to start slowing. Interesting to note the price per square foot price was up slightly from last month, but the median sales price was down slightly. With the days-to-sell of 52 still being historically very low and the months of inventory of 4 still being well below 12, all signs indicate we are still firmly in a seller’s-market.
On a tangential note, recent reports of real estate in major markets are seeing a more prominent slow down, but these past months have shown NWA continues to have a generally strong, stable market. This is likely due to the consistent population growth to the area. This got us wondering about how the sub-market of residential new construction has changed over time for NWA. We decided to dig through the data. We had expected to make a short blurb about new construction in this statistics update post, but the more we looked into it, the more interesting things we found. Needless to say, this subset of the residential market has seen a significant upward trend. We decided there was too much to say. We intend to make a separate post just about residential new construction in NWA. Consider this a teaser… 😊
With that, we wrap up the discussion of July’s numbers. We think the market will continue to cool as we enter the typical fall/winter months slow down. If you want to know anything else about current market conditions, don’t hesitate to ask!
📣📣 WE DID IT!! 📣📣 NWA set a new RECORD HIGH for residential real estate sold in any single month!! We surpassed the $475M mark in June!
We've made it half way through the year, and generally speaking, the market is still fairly consistent with the activity of last month. Outside of the exciting history-making moment, there’s honestly not much interesting to say about June.
Many metrics saw marginal, or even no change, from May. Expired listings were the only statistic that had a double-digit percentage change from last month. There is no way for me to prove this, but we suspect the 13% increase in expired listings are from listings that started in January and were scheduled to run for a six-month period (a very common listing timeframe/duration). However, given the months of inventory stayed at 3, there are still plenty of buyers out there, so the jump in expired listings does not appear to be a sign of a drastic shift in the market.
The only other thing of note is new listings dropped 18% from a year ago; which I believe is a sign of the number of owners wanting to take advantage of their accrued equity over recent years has started to slow.
All in all, thing seem to be stable. That said, the market is cyclical, and June is historically the “peak” of the annual cycle for real estate sales. We expect July will still have a good showing, but We anticipate the cycle will hold true, and July will have slightly lower numbers than June. We shall see!
The market is still chugging right along!
Home values are still rising. In May, we officially crossed the $350K median sale price threshold. The average price per square foot was up $17/SQFT! That’s the largest single-month change in more than the last 10 years (both by number and by percentage).
With prices up, it’s reasonable to expect total sales volume to be up, but the 32.6% increase from last month was a surprising jump. In fact, May’s total sales volume was only 0.04% off the NWA record high for any month of residential sale. There has only been one month (June 2022) with a higher total sales volume.
Buyers continue to keep pace with supply. Active listings increased by more than 200 (22.4% increase), but the total sale by number also increase 200+ and expired listings increased marginally (1.6% increase); all leading to the number for months of inventory going down (again). Two other indicators the market is still competitive, the median days to sell went down from April, and the ratio of original list price to sale price is back at 100%.
It’s accurate to say May saw even stronger production than April. Historically speaking, June is one of the best preforming months for sales in NWA, so assuming that trend continues, we’d anticipate similar strong numbers in June. We will be watching to see if the buyer’s demand continues to impress.
Want to know anything else about the market? Ask away!