Data from the Federal Housing Finance Agency shows that home prices in Arkansas rose modestly during 2013. From the fourth quarter of 2012 through the fourth quarter of 2013, the FHFA Expanded Data Index shows an appreciation rate of 0.2% (seasonally adjusted). The comparable rate of appreciation for the entire nation was 7.8%. All of the gain in Arkansas home prices was attributable to an increase in the first quarter of the year (+1.3%). Prices declined 0.9% percent in the fourth quarter, following modest declines in the second and third quarters.
The relatively slow rate of appreciation in Arkansas is not surprising. During the house price collapse of 2007-2011, prices in Arkansas did not fall nearly as far or as fast as the national average — hence, we are experiencing a smaller bounce-back.
The state-wide average performance of house prices gives a general view of residential real estate prices in Arkansas, but it also masks some differences across regions. As shown in the table and chart below, house price performance has varied considerably among the state’s metropolitan areas. The Fayetteville metro area saw the largest increase in house prices over the year (and over the most recent 2-year period) as its market recovered from the steepest price decline in the state during the 2007-11 decline. House prices in Texarkana were down slightly for the year, but that change represents only a modest setback in an otherwise increasing trend. Fort Smith and Hot Springs saw the largest 1-year declines, and prices in both of those metro areas are down over the most recent 5-year span. Nevertheless their cumulative declines since the beginning of 2007 are smaller than either Fayetteville or Memphis. (In fact, from 2007:Q1 through 2013:Q4, house prices in Fort Smith are down only 0.1%.) House prices in Memphis declined by over 12% during the 2007-11 downturn, and have yet to show any significant improvement.
Recently released statistics on home prices from CoreLogic®, a data and analytics company, corroborate some of the trends seen in the FHFA data. For example, the CoreLogic figures show a much slower rate of appreciation in Arkansas than for the national average. In fact, the full-sample CoreLogic numbers show a decline in Arkansas home prices during 2013. After netting out distressed sales*, however, home prices were up 3.2% from December 2012 through December 2013. The CoreLogic statistics also show relative weakness in Fort Smith and Hot Springs — as do the FHFA data. Net of distressed sales, however, prices in Fort Smith were rising faster than the statewide average. Increasing prices in Texarkana confirm that the short-term weakness suggested by the FHFA data is likely a data anomaly, and not a sign of a trend reversal.
* Distressed sales include properties that have been through foreclosure and those that are exchanged in “short-sales” (in lieu of foreclosure).