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Arkansas Home Sales in 2012 – Zero Growth

The Arkansas Realtors® Association (ARA) released new home sales data yesterday, covering the final two months of 2012.  November sales were up 6.6% from the previous year, while December sales were down 6.2%.  For the two-month average, home sales were essentially flat (+0.1%) compared to the same period in 2011.  The chart below shows that Arkansas home sales in 2012 were a repeat of the 2011 experience:  a typical seasonal pattern with no apparent change in trend.  In fact, the annual figures from the ARA show that sales in 2012 were down 1.1% for the year as a whole.

Source: Arkansas Realtors® Association

After seasonally adjusting the data to statistically remove recurring annual patterns, the flat-line for Arkansas home sales becomes even more evident.  In the figures below, seasonally-adjusted data are displayed for the monthly sales data and for quarterly totals.  Both charts illustrate the absence of any discernible trend over the past two years.

Sources: Arkansas Realtors® Association, Institute for Economic Advancement
Sources: Arkansas Realtors® Association, Institute for Economic Advancement

The release of sales data for November and December was, in some sense, anticlimactic — the final two months are typically among the slowest sales months of the year, so there was little chance of a substantial year-end surprise.  Sales during the peak summer months of 2012 had already shown that annual totals would be little-changed from the previous year.

Looking ahead to 2013, there are reasons to be cautiously optimistic:  Financing rates remain at all-time lows, home prices have appear to have bottomed-out, and general economic conditions continue to improve (albeit slowly).  Foreclosures and distressed sales will continue to be a negative factor, since foreclosures add to available inventory and tend to put downward pressure on prices.  Nevertheless, this is likely to be less of a drag on home sales over time as the pace of foreclosure activity continues to slow.  Overall, our forecast for home sales in 2013 remains a modest increase of about 6%.

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