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What is going on in Arkansas?
Dated: October 30 2023
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Here is the state of the Arkansas Housing Market: (keep in mind NWA is it's own world)
Median Home Value: $149,120
1-Year Appreciation Rate: +10.4%
Average Days On Market: 102
Median Rent Price: $851
Price-To-Rent Ratio: 14.60
Unemployment Rate: 4.4% (latest estimate by the Bureau Of Labor Statistics)
Population: 3,017,804 (latest estimate by the U.S. Census Bureau)
Median Household Income: $47,597 (latest estimate by the U.S. Census Bureau)
Arkansas Median Home Prices
The median home price in Arkansas is approximately $149,120. To put things into perspective, the median home value across the United States is $293,349, according to Zillow’s Home Value Index. The 96.7% difference between the two can be primarily attributed to the last year. While home values have appreciated in both regions for the better part of a decade, the median home value in the U.S. has increased 15.0% in the last year. Over the same period of time, real estate in Arkansas increased a more modest 10.4%.
There is no doubt that Arkansas’ appreciation rates have trailed behind the national real estate market in recent history. It is also worth noting, however, that median home values in the United States have fared better since the latest recession. Since the Arkansas real estate market bottomed out around April 2012, prices have increased 44.7%. Real estate prices across the United States, on the other hand, averaged increases somewhere in the neighborhood of 79.9%.
Despite nearly a decade's worth of appreciation, it looks as if the Arkansas real estate market still has room for growth. As one of the more affordable states to buy in, demand will remain supported by affordability. However, in addition to relative affordability, new indicators created in the wake of the pandemic will facilitate future price increases. In particular, the state's lack of available inventory isn't nearly enough to keep up with new demand. In the last year alone, demand has increased because of lower interest rates and lower unemployment rates, so much so, in fact, that supply can't keep up. The resulting competition will drive prices higher for the foreseeable future, most likely at a rate faster than was seen over the last year.
Arkansas Median Rent Prices
Arkansas’ home prices share a distinct correlation with every housing indicator, and rent prices are certainly no exception. You can very easily attribute Arkansas' higher rental prices to the state’s latest bought of appreciation. If for nothing else, higher home values are preventing a large population of prospective buyers from actually committing to a purchase, if not pricing them out of the market altogether.
In other words, there’s a large contingent of people that want to buy but can’t, which lends itself to another issue: the same supply and demand crisis facing would-be buyers is impacting renters. Since more people are priced out of the buying market, we see more renters than average competing over fewer available properties. As a result, landlords have found themselves in a position of power in Arkansas and increased their asking rates.
According to the latest data released by Apartment List, the median rent in Arkansas has increased 7.9% in the last year and now sits around $851. The latest increase has resulted in the following prices for individual unit sizes:
Studio: $617
1 Bedroom: $647
2 Bedroom: $822
3 Bedroom: $1,012
4 Bedroom: $1,213
Comparatively, the national average rent price is $1,219, or 43.2% higher than Arkansas'. The difference is noticeable, and appreciation forecasts suggest the discrepancy will only grow for the foreseeable future.
Arkansas Foreclosure Trends & Statistics
According to Attom Data Solutions’ Midyear 2021 U.S. Foreclosure Market Report, a total of 65,082 U.S. properties received a foreclosure filing (default notices, scheduled auctions, or bank repossessions) in the first six months of the year. “That figure is down 61 percent from the same time period a year ago and down 78 percent from the same time period two years ago,” according to the report.
Foreclosures are down on a national level for one reason: Over the last year, forbearance programs and government aid prevented many distressed homeowners from defaulting on their loans. Foreclosures in Arkansas are no exception, as filings are down about 53.0% over the first six months of 2021 from the same point in the previous year. In all, Arkansas saw a total of 350 properties file for foreclosure from January to June. At that rate, only 0.03% of the state's housing units are considered distressed.
However, it needs to be noted that the lull in foreclosure activity isn't expected to last much longer. As government assistance runs out, distressed homeowners will be forced to come current on their mortgages, leaving many no other option than to file for foreclosure. As a result, preemptive Arkansas real estate investors will want to start lining financing up for the second part of 2021. Over the next year, in fact, foreclosures are expected to increase, and prepared investors may be able to step in and help distressed homeowners avoid bankruptcy.
Joseph Lucero
My passions (deep sincere connections with others that are open to life, dance and movement, Pilates, hot and cold therapy and breath work). My life started near the beach in Santa Cruz, California....
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