NOVEMBER HOME SALES DOWN IN ARKANSAS

By Amy Riggin/OF THE COMMERCIAL STAFF

Home sales in November fell nearly 35 percent statewide compared to last November — the largest decline of the year — the Arkansas Realtors Association reported recently.

Jefferson County saw a decline of 46.5 percent, with 23 homes sold compared to 43 in November, 2007. Year-to-date sales through November were at 407 homes, a 14.85 percent drop from the same time last year.

In the top five markets in Arkansas — Pulaski, Benton, Washington, Saline and Sebastian counties — Saline County saw the largest decline in home sales, down 41 percent from November 2007 with 87 homes sold last month. A total of 1,397 homes were sold statewide last month, compared to 2,139 in November 2007.

Total home values for the state also fell by nearly 40 percent to about $193.3 million.

The value of new and existing residential units sold in November was $2.2 million in Jefferson County, down 45.3 percent from the same month last year. Year-to-date home values were down nearly 14 percent to about $38.3 million.

The average price of new and existing homes sold in Jefferson County was roughly $96,000, up 2.27 percent from November 2007. The year-to-date average price also was up 1.15 percent to $94,000.

Martha Womack, sales associate for Hometown Realty Services and president of the Southeast Arkansas Home Builders Association, acknowledged that the housing industry has suffered a blow.

“The mortgage industry has taken a huge slap,” she said. “The bailout was put there for a reason ... A lot of bad decisions were made by lenders who were giving mortgages to people who probably shouldn’t have been getting mortgages.”

The biggest problem, in Womack’s view, is the recent increase in 100 percent financing of conventional loans, which means that homeowners don’t have to invest anything to buy their homes. She said other methods should be used to encourage more investment, such as a Federal Housing Administration program that requires buyers to put 3 percent down on homes.

“When you are investing financially in your mortgage, you’re probably going to appreciate the product you have to live in a whole lot more,” Womack said. “That’s the only way we used to do mortgages, so we’re kind of going back to that.”

Another incentive for home buyers now is a new tax credit of $7,500, to be distributed along with a person’s income tax return. It is available for buyers who haven’t purchased a home in the last three years. In two years the buyer has to start paying back the credit, but only at a rate of $500 a year, interest-free.

“What a deal to get and have 17 years to pay it back,” Womack said.

Frank Washington, owner of Washington Construction of Pine Bluff, said his business has felt the slow-down. He has been building homes in the Jefferson County area for about 45 years.

“Three years ago we were building anywhere from 12 to 15 houses a year and now we’re down to four or five,” Washington said. “Three or four years ago it was really booming; You couldn’t build all the houses that you had ordered to build. And now we’re scraping.”

Washington said he thinks that part of the reason for the decline in housing demand is because it is difficult to get home loans.

“The loan industry has cracked down on lending, and that has squeezed some people,” he said. “It’s not as easy to get a home loan now as it was even a year ago.”

Nonetheless, Womack praised lenders in the Pine Bluff area for their conservative practices.

“We have good lenders in Pine Bluff,” she said. “Simmons (First National Bank) and Pine Bluff National Bank and our other financial institutions here, they’re really good about getting qualified buyers.”

And Womack is hopeful that the tide will soon turn.

“Our phones are beginning to ring and interest rates are below 5 percent,” she said. “The housing industry always has peaks and valleys. I think we’re in our valley, but I think we’re going to go back up to that peak.”

Home sales data also was available for Grant County, down 46.7 percent from 15 to 8 homes; Arkansas County, down 16.7 percent from 12 to 10 homes; and Ashley County, which remained the same at 6 homes.