busy months ahead?
By Ethan C. Nobles, director of media relations for Arkansas Realtors Association

Historically real estate markets in Arkansas have reported the strongest sales in the summer months.

The Jonesboro area is certainly no exception to the rule and things played out as expected last year. As was expected, May through August proved to be the most active months in Craighead County and three of those months – May, June and August – are the only ones in which over 100 homes were sold. July wasn’t far behind the “100 sales club” as 93 sales were reported in the county that month.

It’s worth pointing out that those four months represented the very clear peak as far as sales activity was concerned. During May through August, an average of 103 was sold every month and that average dropped to 70 units per month during the rest of the year.

Of those nine months that registered an average of 70 units sold, October provided the highest total with 82 sales and February was second with 80 sales. The fewest transactions in Craighead County were reported for November when 44 homes were sold.

The question, of course, is will 2009 deviate from the norm or will sales be strongest once again in the spring and summer months? While we’re not in the crystal ball business here at the Arkansas Realtors Association, there are some encouraging signs that suggest sales will once again be strong during the spring and summer.

Why? For one thing, there’s the aforementioned historical precedent to consider. One of the reasons sales increase in the spring and summer is because families with children tend to plan their moves when school isn’t in session. Plucking Junior out of his school in the middle of the semester is rarely a preferred option, so people tend to move after the school year has ended.

That, of course, means they typically start looking for homes in the spring or late winter and close on them in the summer months.

Also, sales in the Jonesboro area have been on the rise since January when 42 homes were sold. In February, 62 houses were sold in Craighead County and Realtors® reported 87 sales in March. Again, no one is willing to make predictions these days, but it seems relatively safe to conclude that sales have improved consistently this year.

On a related note, average sales prices have improved this year, too. In January, the average sales price was $122,926. In February, the average increased to $140,589 and was $152,834. While we don’t have enough evidence to start talking about a trend heading into the summer months, it’s at least encouraging that there was consistent improvement in both the number of homes sold and average sales prices in the first quarter of the year.

Here’s some more encouraging news – Realtors® have reported that people are influenced by the low mortgage rates and the $8,000 tax credit for first time homebuyers. Mortgage rates are at historic lows and have been very low since November when the Federal Reserve announced the decision to purchase $500 billion in mortgage backed securities held by Fannie Mae and Freddie Mac.

Mortgage backed securities, of course, were deemed unsafe for a time as they were propped up by troubled mortgages. When the Federal Reserve made the decision to purchase those securities, they were regarded as safer by investors. Mortgage interest rates are tied directly to those securities and drop as the popularity of those securities increase.

The Federal Reserve, since November, has had more influence over the mortgage securities market, thus dropping interest rates further.

Of course, the first time homebuyer’s tax credit of up to $8,000 has gotten the attention of potential homeowners, too. A first time homebuyer, under federal law, is someone who hasn’t owned a primary residence in the past three years.

The tax credit is capped at $8,000, meaning an eligible buyer can claim up to 10 percent of the value of the home up to that limit. At any rate, the tax credit comes in the form as cash and can be claimed for homes purchased from Jan. 1 through Nov. 30.

All in all, the real estate market in Craighead County has shown improvement this year. Hopefully, that will continue as we enter the late spring and summer.