State’s Home Sales Plummet (As Reported by the Morning News)

Last updated Tuesday, February 10, 2009 5:44 PM CST in Business

By Kim Souza

THE MORNING NEWS

SPRINGDALE — Home sales across the state continued to decline in December, capping off the worst year in nearly a decade, according to a report released by the Arkansas Realtors Association.

Statewide there were 25,012 homes sold last year, down 18.16 percent from the previous year and off 25.29 percent from the market’s best year of 2005. Average home prices across the state dipped 1.98 percent to $149,055, according to the report.

Local economists have attributed the declining home sales to tighter borrowing requirements from lenders and weaker consumer confidence relating to falling home prices and worries about future job losses.

Agents and brokers who saw their commissions shrink by more than $67 million last year remain optimistic that better days are ahead.

Harold Crye, co-owner of Crye-Leike Real Estate, believes the market is bouncing along the bottom of the trough. He said he expects sales to improve in the second half of this year after government stimulus plans begin to calm consumer fears.

Benton and Washington counties reported the steepest market decline in terms of both number of sales and prices. These counties rank No. 2 and No. 3 respectively, in terms of market size. Together Benton and Washington counties comprised 21 percent of the state’s total real estate sales last year, clearly impacting the state’s overall results.

The report indicated Benton County’s average home prices slid 5.25 percent in 2008 to $181,597, while Washington County reported a 2.29 percent dip in average prices in the same period. But not all the counties showed declines. Average home prices in Cleburne County actually jumped 2.96 percent, to $168,689, the fifth-highest in the state. Prices in Garland County and the Hot Springs market also held steady, increasing 0.77 percent to $174,550 in 2008.

The state’s largest market — Pulaski County — reported its total home sales fell roughly 21 percent in 2008, while home prices dropped 2.18 percent to $171,679.