Market Trends Explained

Article by Ethan Nobles of the Arkansas Realtors Association.

Since the first of the year, we've heard a lot about housing markets being down around the nation.
Here in Arkansas, we've seen slowing sales. There's no point in denying that, in most markets, sales are down when compared with 2006 numbers. Through September, there were 23,622 homes sold by Realtors in the state, down 8.47 percent from 25, 809 houses sold in the first nine months of 2006.
There are a couple of things to keep in mind when talking about homes sales in Arkansas. First of all, we're coming off about 7 years of unprecedented sales and 2006 was the second best year on record in terms of sales in Arkansas.
Meanwhile, home prices have continued to appreciate across the state. Through September, the average price of a new or existing home was $154,175, up 1.57 percent from $151,796 through the first nine months of 2006.
In short, sales are down a bit, but average prices are increasing. In other words, we're seeing a return to a normal market in Arkansas. That might be good news for buyers who have been at a disadvantage for years.
Currently, sellers tend to be more wiling to negotiate than they were a couple years ago when all one had to do was list a home and wait for offers. And, those offers did come pretty quickly-so quickly, in fact, that sellers started to view the atypical market they enjoyed through last year as typical.
In Arkansas, a normal housing market is marked by slow, steady growth in terms of both sales and average prices. Average prices are still rising a bit here in the Natural State and we're still seeing houses move at a healthy rate. They may not be selling as quickly as they were a couple of years ago, but they're still selling.
Now, we've got a situation where sellers find themselves in the position of competing a bit more to attract buyers than they have in the past few years. We're seeing sellers and builders throw in more incentives, such as remodeling allowances, home warranties and amenities such as privacy fences in hopes of getting buyers to give their homes a second look.
Here at the Arkansas Realtors Association, we keep a close watch on markets around the state and have found something that should be of comfort to sellers. A home might sit on the market for a bit longer than it did a couple of years ago, but sellers do generally get their list prices.
This is important to point out because some national real estate experts are encouraging buyers to take advantage of "desperate" sellers and make offers to buy homes for substantially less than fair market value. There's no reason for sellers to be so desperate in Arkansas that they'll take any offer that is presented.
In short, that home might not sell as quickly as it did in the banner year such as 2005, but history suggests that it will sell. A patient seller in today's market may well get the price he wants for his home, so long as that price is reasonable.

Why overpricing and soliciting "offers" doesn't work

Many sellers feel they must list their property higher than the market analysis so they will have "room to negotiate." While it is true that some buyers may want to make lowball offers, the buyers who really want your house will pay fair market price. Also, buyers have access to a lot of the information we Realtors have access to, so they are better informed about the market value when they decide to make an offer on your home. And, last but not least, a well priced property can result in multiple offers, even in this market, and that is the true test of market value.

*If your home IS NOT being shown, it means that the buyers think that your price is too high and they are choosing to look at other homes.

*If your home IS being shown, but you are not getting any offers, it means that the buyers are finding nicer homes for the money. Your asking price is too high.

*If your home is in the running, but the buyers buy something else, or if the buyers view your home for a second time, but they buy something else, it means that your home isn't priced competitively and you are helping the competition sell their home.

Written by: Rusty Armstrong, Broker, ERA Armstrong Team