New data from the Federal Housing Finance Agency (FHFA) show that house prices in Arkansas continued to decline in the second quarter of 2011. The FHFA All-Transaction Index for Arkansas declined slightly (-0.2%) from the first quarter, leaving the index down 2.5% from the second quarter of 2010. The rate of decline in Arkansas home prices remains below the national average: the national statistics show prices down 1.9% in the second quarter and 4.5% lower than a year earlier.
Home price declines are far from uniform across the state. As shown in the chart below, prices in the Fayetteville metro area have followed a pattern similar to the national average, while prices in Little Rock have only recently shown modest declines.
Source: Federal Housing Finance Agency
In fact, house prices in some of the state’s smaller metro areas have fared even better than in the Little Rock area. In the second quarter of 2011, prices rose in Hot Springs, Pine Bluff and Texarkana. In each of these metro areas, prices are higher than they were a year earlier. In Texarkana, house prices are higher than they were in the last quarter of the recession (2009Q2), although prices in each of the other metro areas have fallen since then. If we consider changes over the past five years, home prices in the Fayetteville and Memphis areas are down sharply, but homes in the state’s other metro areas have maintained their longer-run values.
The National Association of Realtors® (NAR) released statistics on home sales by state yesterday. The seasonally-adjusted data for Arkansas show second quarter sales unchanged from the first quarter and down 17.6%% from the second quarter of 2010. Nationwide, home sales were down 5.4% from the quarter and down 12.7% from the previous year. The year-ago comparisons are not surprising: the second round of home-buyer tax credits expired in 2010:Q2, generating a surge in sales.
The NAR data are consistent with previously released reports from the Arkansas Realtors® Association (ARA). The ARA data have shown home sales rising through the first half of the year, but this is a typical seasonal pattern. As shown in the chart below, seasonally adjusted data reveal fairly stagnant home sales — well below the level of the previous year.
Source: Arkansas Realtors® Association; Seasonally adjusted by the Institute for Economic Advancment
In fact, the NAR data and the ARA data — while based on different samples and methodologies — are showing a very similar pattern when placed on a comparable basis. In the chart below, the ARA data is averaged by quarter and both series are indexed to equal 100 in the first quarter of 2009. Prominent peaks in 2009:Q4 and 2010:Q2 mark the surges associated with tax-credit dates. Both sets of data show a sharp drop-off in 2010:Q3, and slow sales since then.
Sources: National Association of Realtors®, Arkansas Realtors® Association, Institute for Economic Advancement
The latest house price data from the Federal Housing Finance Agency (FHFA) shows that average house prices in Arkansas continued to decline in the first quarter of 2011. The FHFA “All Transactions Indexes,” which incorporate house price information from both home sales and refinancings, showed an average decline for Arkansas of 1.6% in the first quarter of the year. Over the last four quarters, the average value has fallen about 1.9%. These decreases are smaller than the national average: In the first quarter, average prices for the U.S. as a whole fell 2.7%, and are down 3.1% over the past four quarters.
Source: Federal Housing Finance Agency
The statewide average conceals some stark differences among regions of the state. As shown in the figure below, house prices in the Fayetteville-Springdale-Rogers metro area have followed a pattern very close to the U.S. average. Over the past four quarters, prices in Fayetteville are down 4%, and have fallen by 14% over the past five years. In contrast, house prices in central Arkansas are down only 1.1% compared to a year earlier, and are about 4% higher than five years ago.
Source: Federal Housing Finance Agency
The state’s smaller metro areas have generally fared better than the statewide average as well. In the first quarter, prices increased in Texarkana and Jonesboro. Both of these metro areas have generally seen modest but steady price increases throughout the “boom and bust” cycle experienced in most parts of the country. House prices in Hot Springs and Pine Bluff had been rising steadily during the early stages of the housing downturn, but have turned sharply negative in recent quarters. Prices in Fort Smith have also fallen over the past two years, but not as dramatically as in Hot Springs and Pine Bluff.
Source: Federal Housing Finance Agency
A longer-term perspective reveals the stark differences among Arkansas metro areas. House prices in five of the state’s metro areas are higher than they were at the beginning of 2006. Recent declines in Pine Bluff have lowered prices to about the same level as in 2006, while prices in northwest Arkansas are down by 14%–more than the national average decline of 11.8%.
It should be noted that even the relatively large price declines in the Fayetteville-Springdale-Rogers metro area pale in comparison to some of the more severly impacted regions of the country. Over the five year period from 2006:Q1 to 2011:Q1, house prices in California are down by nearly 35%, price declines in Florida and Arizona are close to 40%, and house prices in Nevada have fallen by nearly half: -48.9%.
The latest monthly home sales figures from the Arkansas Realtors® Association (ARA) have appeared to be rather volatile. Compared to the previous year, sales were up 13% in January, down 6% in February, then down 15% in March. These swings prompted Amy Glover Bryant, Director of Communications for the ARA, to characterize the market as “something of a roller coaster ride.” Interpreting the data are complicated by seasonal patterns and the delayed effects of the home-buyer tax credits in 2009 and 2010.
Home sales follow a recurring seaonal pattern, with sales strong during the summer months and slow during the winter. Consequently, month-to-month comparisons of raw sales data are dominated by seasonal effects, with little information about business cycle fluctuations or longer term trends. The appropriate measure for tracking such data is the year-over-year comparison that has recently yeilded such variable readings. To properly interpret year-over-year data, however, it is necessary to keep track of special factors that were influencing the market 12 months ago. For several months now, the Federal government’s home-buyer tax credit programs have been relevant for that evaluation.
As shown in the figure below, year-to-year changes for January, February and March of 2011 are guaged against sales figure for 2010 that lie between the tax-credit expiration dates of November 2009 and April 2010. January is typically the slowest sales month of the year, and last year it was also effected by the slowdown that immediately followed the November 2009 tax credit expiration. Sales began to pick up in February and March as the second tax-credit program ramped up toward a peak in April. These developments have effected year-over-year comparisons just as much (if not more than) the sales figures for 2011.
Source: Arkansas Realtors® Association
Another way to disentangle the seasonal fluctuations from underlying cycles and trends is to use statistical methods to “seasonally adjust” the data. The transformed, seasonally-adjusted data provide an estimate of the sales pace for each month under the counterfactual assumption that home sales are distributed evenly throughout the year. After the purely seasonal components are removed, it is legitimate to make month-to-month comparisons, or to compare different points throughout the year. The figure below shows the Arkansas home sales data, after seasonal adjustment.
Source: Arkansas Realtors® Association. (Seasonally adjusted by the Institute for Economic Advancement.)
After seasonal adjustment, the two sales peaks associated with the end-dates of the home-buyers’ tax credits are clear. Each peak is followed by a sharp drop in sales. Since the expiration of the second program last year, sales languished — but have begun to recover, slowly.
In addition to the monthly data from the ARA, the National Association of Realtors® (NAR) publishes quarterly, seasonally-adjusted sales figures for each state. The methodologies for collecting and processing the data differ between these two sources, so it is interesting to compare their implications. The figure below presents such a comparison, with each series normalized to equal 100 at the start of 2009. Both series show the sales peaks associated with the home buyers’ tax credits, and both indicate a slow, uneven recovery since the drop-off in 2010:Q3. The NAR data show a slight increase in 2011:Q1 compared to the previous quarter, while the ARA data show a slight decrease.
Sources: National Association of Realtors®, Arkansas Realtors® Association, Institute for Economic Advancement.
The trends are not clear enough to make any unambiguous projections. But when it comes to the monthly data releases from the ARA, April 2011 is almost certain to represent a sharp decline from the previous year. Similarly, July 2011 (typically the highest sales month of the year) is almost certain to be higher than July 2010. When those figures are released, however, it will say more about what happened in 2010 than what is happening today.
This morning, the Arkansas Realtors® Association (ARA) released data on Arkansas home sales for December 2010. As illustrated in the chart below, 2010 was an unusual year for home sales. The typical seasonal pattern features a peak around mid-summer (usually in July), with a low point during the winter months (usually in January). In 2010, the summer peak came early–in April. Sales during the summer months were uncharacteristically low.
Source: Arkansas Realtors® Association
The reason for this unusual pattern was the timing of Federal tax credit programs for home buyers. The second round of credits–which were available for first-time and repeat home buyers–expired at the end of April 2010. Typical delays in the closing process meant that some qualifying sales were not officially recorded until May or June, helping to support sales figures for those months. The subsequent collapse in sales during the late summer and autumn of the year is a reflection of the demand that was shifted forward by the tax credit program: Some households that would have purchased later in the year accelerated their plans to take advantage of the incentive program. The sales pattern induced by the timing of the tax credit program is even more apparent when the sales data are seasonally-adjusted, as shown in the figure below:
Sources: Arkansas Realtors® Association, Institute for Economic Advancement*
(The previous sales peak that is evident in the seasonally-adjusted data coincides with the conclusion of the original first-time home-buyers’ tax credit in November 2009.)
The December 2010 figures that were released this morning show that sales continue to recover from their low point in July. The outlook for 2011 depends crucially on how quickly market conditions will return to “normal”–that is, how long it takes for the effects of policy-induced demand shifts to disippate. The fact that seasonally-adjusted sales during the latter part of 2010 steadily improved suggests that the process of adjustment is taking place fairly rapidly. Indeed, the sales figures for December 2010 are only slightly lower (-0.88%) than the previous year.
Overall, sales during 2010 were down 4.8% from the previous year. The home-buyer tax credit appears to have shifted demand from the second half of the year to the first half, with little evidence of an impact on total annual sales. As the tax credit program recedes further into the past, home sales during 2011 should increasingly reflect current market conditions rather than the delayed effects of special policy factors.
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*Seasonally adjusted data for Arkansas home sales were calculated by the Institute for Economic Advancement, using the Census X-12 ARIMA procedure.
The Arkansas Realtors® Association (ARA) released their report on September home sales this morning. The report notes that “home sales in September 2010 remained 21 percent below the state’s September 2009 pace when home-buyers were ramping up in advance of the initial deadline for the tax credit last November.”
Earlier in the week, the National Association of Realtors® (NAR) released data on existing home sales nationwide. The NAR report noted that sales “remain 19.1 percent below the 5.60 million-unit pace in September 2009 when first-time buyers were ramping up in advance of the initial deadline for the tax credit last November.” However, the headline on the NAR report, “September Existing-Home Sales Show Another Strong Gain,” emphasized the change from the previous month. The report highlighted the fact that sales were up 10.0 percent (seasonally adjusted) compared to August.
In comparison to September 2009, the national report and the Arkansas report tell the same story. Sales in 2010 are much lower than they were when a first-time home-buyer’s tax credit was in place. However, when assessing the current state of the market and the near-term outlook, the NAR’s month-to-month comparison provides more timely information.
In order to compare the more recent pattern of Arkansas home sales with the recent national statistics, it is necessary to explicitly take account of seasonal factors. As noted in last month’s post on this topic, home sales follow a highly seasonal pattern. This year, the typical pattern has been distorted by the expiration of the second round of home-buyer tax credits at the end of April. Sales remained relatively strong in May and June as qualifying contracts continue to close, but dropped sharply in July. The report from the NAR highlights recovery from that low point.
The chart below shows seasonally-adjusted home sales for Arkansas. Two methods of seasonal adjustment are illustrated. First, the “Direct” method applies the standard Census X-12 ARIMA procedure to the ARA data for the period January 2007 through December 2009, extrapolating the 2009 seasonal factors forward into 2010. The second method applies the implicit seasonal factors from the NAR data: Specifically, we use the most recent seasonal factors for the NAR’s “South” region, applying them to previous years’ data for Arkansas.
Sources: Arkansas Realtors® Association, National Association of Realtors®, Institute for Economic Advancement
The two methods of seasonal adjustment yeild similar results. Seasonally adjusted sales were declining steadily during 2007 and 2008. They recovered during 2009, but then dropped off after the expiration of the first round of tax credits near the end of the year. Sales surged in March and April, as home-buyers rushed to take advantage of the second round of tax credits, then dropped off sharply to reach a low point in July. This is the same pattern that is evident in the national sales statistics as well.
After hitting a low-point in July of this year, home sales in Arkansas have shown two months of increase. The NAR report touted a 10% increase in September. The corresponding figure for Arkansas is in the range of 15 to 18 percent (depending on the method of seasonal adjustment). Compared to the low point in July, Arkansas home sales were up about 22 percent (using either method of seasonal adjustment). The corresponding figure for nationwide home sales is 17.8 percent.
After making the adjustments necessary to legitimately compare month-to-month sales, the report on Arkansas home sales in September could carry the same headline as the NAR’s national report: September Home Sales Show Another Strong Gain.
The Arkansas Realtors® Association released new information on August home sales this morning. For the month, the data show total sales of 1897 units, down 14.7 percent from August of 2009. However, year-over-year comparisons are not necessarily the most informative guage to use under the current circumstances. A year ago, the first-time home-buyers’ tax credit was helping to boost sales, while the expiration of tax credits in April of this year has contributed to a slump in home sales during the summer of 2010. As shown in Figure 1, home sales usually follow a distinct seasonal pattern, with the highest sales during the summer months (May through August). This year, the rush to take advantage of tax credits pushed the peak to earlier in the year.
Figure 1:Source: Arkansas Realtors® Association
Typically, the peak sales month is July, but August sales also tend to be relatively high. On average over the past three years, August sales have been approximately 4 percent lower than July. In 2010, sales in August were 7.8 percent higher than the previous month. This uncharacteristic pattern suggests that the post-tax-credit hangover hit hardest in July and the market is starting to recover. Reinforcing this conclusion, Figure 2 shows data that have been seasonally adjusted.* The seasonal adjustment procedure smooths out the predictable seasonal fluctuations, leaving only idiosyncratic month-to-month volatility and broad cyclical patterns.
Figure 2:Sources: Arkansas Realtors® Association, Institute for Economic Advancement
In the adjusted data, it is clear that sales improved steadily over the course of 2009 (presumably with support from the original first-time home buyers’ credit). After the expiration of the original tax credit program, sales slowed over the winter months before being boosted by the extended and expanded tax-credit program in the first part of 2010. Both Figure 1 and Figure 2 show that the August sales number represents a slight rebound from the July slump.
Data on the average sales price of Arkansas homes, displayed in Figure 3, show that the slowdown in sales has been accompanied by a rather sharp increase in prices. The average sales price for August was $152,466, up by over 12 percent compared to February 2010. It is very unlikely that this increase represents a rise in the general value of Arkansas houses. Rather, the increase in prices represents a changing mix of homes that are being sold. The home-buyer tax credits tended to favor buyers in the low- to mid-price range. Now that they have expired, a larger proportion of total sales are higher-priced homes. The increase in average sales prices is also supported by a seasonal pattern in which higher-priced homes tend to experience relatively higher sales volume over the summer months.
Figure 3:Source: Arkansas Realtors® Association
The headline of the press release from the Arkansas Realtors® Association emphasized that year-to-date home sales in 2010 were approximately equal to the same period in 2009. Given the recent distortions in the market due to the implementation and expiration of home-buyer tax-credits, this is probably the most reasonable intertemporal comparison to make. In order for annual home sales in 2010 to exceed those of 2009, however, we will have to see further sales recovery in the remaining months of the year.
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*Seasonally adjusted data are computed by applying the Census X12 ARIMA procedure to monthly data for January 2007 through August 2010.
This morning, the Arkansas Realtors® Association (ARA) released home sales statistics for the month of July. As anticipated (see previous post), sales were down sharply from the previous month and were substantially lower than the previous year. Compared to July 2009, Arkansas home sales were down 31.6 percent. As shown in the chart below, home sales during 2010 have followed an unusual seasonal pattern.
Typically, sales peak during the mid-summer months (usually in July), then taper off over the remainder of the year. This year, the peak came early. The reason, of course, was the availability of tax credit for home buyers, which expired at the end of April. To qualify for the credit, a contract needed to be in place before May 1, but the actual closing date could be later. Hence, sales figures for May and June were supported by the lingering effects of the credits. The steep decline in July reported this morning mirrors the pattern we saw in the national data for new and existing home sales, and reflects the fact that most of the contracts that were eligible for tax credits have already been closed.
The big question is how the rest of the year will develop. Temporary subsidies and incentives tend to shift demand from one time period to another. Many of the home sales that took place in the first half of 2010 would have probably occurred later in the year were it not for the tax credit deadline. The key issue is whether there is substantial demand remaining to support the market after the hangover ends. In this regard, forecasts are necessarily uncertain.
Some specific fundamentals suggest that there may be some limited recovery of the market during the fall months: House prices remain somewhat weak and mortgage rates are at historic lows — it’s still a buyer’s market. There will continue to be routine demand for homes associated with relocations. On the other hand, the slow recovery of employment has sapped some strength out of consumer confidence, so there is apprehension about making the kind of long-term commitment that is entailed in buying a house. Since Arkansas has not suffered the magnitude of job losses seen in other parts of the country, and is showing some signs of recovery, we can be hopeful that this will not be a significant damper on housing demand during the remaining months of 2010.
The full report from the ARA (Excel spreadsheet) can be downloaded here.
“the expiration of the home-buyer tax credits is the elephant in the room”
Information on residential real estate markets has dominated the news over the past few days. When it comes to evaluating the housing markets in Arkansas, recent reports from various sources show a consistent picture of recent trends, but the outlook is very uncertain.
Home Sales
The Arkansas Realtors Association (ARA) released statistics this week showing that June home sales were up slightly over the previous year, but down from the previous month. As shown in Chart 1 below, housing sales follow a recurring seasonal pattern, with the summer months tending to have higher sales than winter months. July is often the peak sales months of the year, but so far this year, sales peaked in April and have declined since then.
Chart 1:Source: Arkansas Realtors Association
Disentangling the cyclical and seasonal effects is crucial to understanding recent trends. Chart 2, below, shows seasonally adjusted data that are averaged over calendar quarters to smooth out some of the month-to-month variability (the data are seasonally adjusted using the technique described in a previous article).
Chart 2:Sources: Arkansas Realtors Association, National Association of Realtors
With these refinements, the cyclical pattern of home sales is more evident: After declining throughout 2007 and 2008, sales steadily increased over the course of 2009. The first quarter of 2010 saw a sharp decline, followed by a rebound in the second quarter. Recent data for Arkansas home sales from the National Association of Realtors (NAR), also displayed in Chart 2, confirm the recent quarterly pattern in the adjusted ARA data.
The sharp decline in the first quarter of 2010 can be partly attributed to weather. Sales are usually low in the winter months, and this past winter in Arkansas was particularly ill-suited to house shopping. Sales recovered in the second quarter to about the same pace as in the fourth quarter of 2009.
But when it comes to assessing the outlook for home sales, the expiration of the home-buyer tax credits is the elephant in the room. Sales in the fourth quarter of 2009 were boosted by last-minute purchases under the original tax credit program for first-time buyers that expired at the end of October. Weather might have kept activity low in the first quarter, but the impending deadline for taking advantage of the extended and expanded home-buyer tax credit on April 30 was undoubtedly a factor in the second quarter resurgence.
The recent tax-credit deadline required that a contract be in place by the end of April, but the closing date could be later. As a result, recorded sales in May and June included some transactions that are associated with last-minute contracts to qualify for the credits. The crucial question is whether the second quarter increase reflects sales that would have taken place later in the year in the absence of the tax-credit deadeline — implying that we should expect a sharp decline over the next few months — or whether it reflects a sustainable improvement in market conditions.
Preliminary information suggests that we will see a drop-off in the third quarter. New data on existing home sales and new home sales nationwide showed sharp declines in July. Information on home sales in central Arkansas for July show that Arkansas housing market experienced this downturn as well. For example, sales in Pulaski county were reported to be down 30.2 percent from the previous month and down 31.5 percent from July 2009. When the statewide sales figures for July are released by the ARA next month, they are likely to show a sharp downturn.
Arkansas home sales over the remaining summer months will probably be relatively weak, as the market returns to an equilibrium undistorted by government subsidies. On the other hand, mortgage rates remain low and house prices have fallen (see below), so the market continues to be favorable for buyers. This factor should help sustain sales later in the year.
House Prices
In addition to reports from the ARA and NRA, new data on housing prices were released this week by the Federal Housing Finance Authority (FHFA). Since the housing downturn began in early 2007, the FHFA purchase-only price index has shown a distinctly lower rate of appreciation than the all-transactions index, which includes appraisal data from refinancings. Ultimately, it is the market sales price that matters, so the purchase-only index provides more accurate information on current market conditions. However, refinancings are more likely to be prevalent in areas where houses are retaining their value, so the all-transactions index might give a better indication of long-run home values. [See also, Comment: Differences Among Home-Price Indices]
As shown in Chart 3, below, the two measures of house prices have diverged considerably since the market downturn began, with the purchase-only index showing considerably more variability. Over the past four quarters, the purchase-only index has experienced quarterly ups and downs, but has changed little on net. The all-transactions index has fallen by 2.4 percent.
Chart 3:
Source: Federal Housing Finance Authority
Under either method, house prices in Arkansas have not experienced declines as large as the nationwide average. Over the past four quarters, for example, the FHFA all-transactions index for the U.S. showed a 5 percent decline compared to the 2.4 percent decline in Arkansas.
Chart 4, below, compares the two FHFA house price indexes for Arkansas with the average sales-price data from ARA. The series are normalized to take on a value of 1.0 in the first quarter of 2007, so the data presented in the chart show cumulative price changes since that time.
Sources: Federal Housing Finance Authority, Arkansas Realtors Association, and authors' calculations
Not surprisingly, the average price data from ARA shows some similarity to the FHFA purchase-only index. Both measures are based on prices of actual sales. Both series show a sharp decline in the first quarter of 2010. This drop is associated with the decline in home sales discussed earlier. With fewer homes selling in general, the segment of the market including foreclosures and other distressed sales constituted a larger share of total sales, depressing average prices. With the pickup in market activity in the second quarter, the price spike was also reversed.
Cumulatively, from 2007 through the second quarter of 2010, house prices in Arkansas have decline modestly. All three measures of home prices show prices down over the period, but by magnitudes of only about 1 to 3 percent.
The FHFA also releases all-transactions indexes for metropolitan areas. As shown in the table below, these data show that house price changes vary considerably across Arkansas’ metro areas.
Source: Federal Housing Finance Authority
Northwest Arkansas has experienced the largest and most persistent declines in house prices. Earlier in the decade, the Fayetteville metro area showed the greatest appreciation in the state, so declines more recently serve to offset some of those earlier gains. Hot Springs has recently shown fairly large declines as well, but compared to five years ago, prices are up about 14.6 percent. Data for Jonesboro, Texarkana and Little Rock show that house prices increased in the second quarter, with prices also higher than a year ago. In fact, Jonesboro serves as a counterexample to the experience of Northwest Arkansas: Rather than rising sharply in the early part of the decade and subsequently declining, house prices in Jonesboro have experienced a relatively slow but steady upward trend.
Data covering the end of 2009 continue to roll in. This week, we received new information about home prices from two independent sources.
First, the celebrated S&P/Case-Shiller index was released on February 23, showing that home prices nationwide were up 1.1 percent in the fourth quarter (seasonally adjusted), following a 3.3 percent decline in the third quarter. Over the past four quarters, the Case-Shiller nationwide index registered a decline of 2.5 percent.
While the Case-Shiller index is a good measure of home values nationwide and particularly in the nation’s largest metropolitan areas, its component indices contain no specific information about Arkansas. An alternative is the similarly-constructed set of house price indices produced by the Federal Housing Finance Agency (FHFA). The latest set of estimates from this source was released yesterday (February 25). The FHFA’s purchase-only index (comparable Case-Shiller) showed that house prices nationwide were basically flat in the second half of 2009 (up 0.1 percent in the third quarter and down 0.1 percent in the fourth). For the year, this measure showed house prices down 1.2 percent.
For Arkansas, the FHFA sales only index showed an increase of 0.5 percent in the fourth quarter, and realtive to a year earlier, house prices were up by 1.5 percent. As shown in the chart below, this continues a clear pattern: During the period of rapid price appreciation in the first half of the decade, Arkansas home prices grew more slowly than the nationwide average. Since 2007, price changes in Arkansas have been similarly muted — we haven’t seen the sharp declines that have been evident in other parts of the country.
Source: Federal Housing Finance Agency
The FHFA also produces an alternative “all-transactions” index that includes appraisals from refinancings in addition to sales-price data. By this measure, house prices have recently shown more weakness, with prices down 1.9 percent in Arkansas and down 4.7 percent nationwide (from 2008Q4 to 2009Q4). Note that Arkansas home prices have remained more stable than those in the rest of the country, using either measure.
Whether the purchase-only or all-transactions index is a better measure of home values in general is an open question. [See Comment: Differences Among Home-Price Indices] But by adding data observations from refinancing appraisals, the FHFA is able to construct indexes for smaller geographic areas, including all of the nations Metropolitan Statistical Areas (MSAs). The table below shows how home prices in Arkansas’ MSAs fared during 2009, in comparison to recent years.
Source: Federal Housing Finance Agency
Home prices fell in most of Arkansas MSAs in 2009, but the declines were generally smaller than the U.S. average. The only exception was in the Northwest Arkansas, where prices have followed a pattern similar to the nationwide average over the past few years. Home prices were also down sharply in Hot Springs in 2009, but that figure represents the first annual decline after a series of fairly large increases. Falling house prices in Little Rock and Pine Bluff also represented the first annual declines in the past five years. Jonesboro and Texarkana both experienced modest house-price increases in 2009, and the data show continued strong appreciation in Fort Smith.
In some metro areas around the country–including many of those included in the Case-Shiller index–home prices have fallen sharply over the past two to three years following a period of exorbitant price increases. The FHFA data show considerably more stability in Arkansas, with price declines in 2009 representing only a modest departure from the trend of steady appreciation over time.
