August 2023 – NWA Monthly Market Update

The Real Estate Market had a big Summer here in Northwest Arkansas! With record high prices and low supply, we remained one of the hottest markets in the country.

As we predicted, our Inventory stayed below 4 months of supply, which means we were definitely in a Seller’s Market this Summer. As we get ready for schools to start back up, and for Fall to set in, we are still dealing with low inventory in our market.

In this chart below, you can see the number of Active/Pending Homes in July just slightly above our level from June, similar to our peak numbers from last year at this time. Also, our number of Closed transactions slipped back from last month’s numbers a bit as the summer rush is beginning to die down.

As for Active Homes on the market, we still haven’t recovered fully from the Pandemic drop in inventory. We are now holding about twice the homes on the market as we saw in July of 2021. So, it’s significantly more than what we saw during the height of the buying frenzy and super competitive nature of the market that year. However, we’re still not back to a normal market, as we still have 36% fewer listings than in 2019. But it does appear our market’s inventory is on the rebound, and buyers will continue to see more options to shop.

Most homes are still finding a buyer fairly quickly. At the Mid-to-Lower price points, multiple offer situations are still happening. This is keeping the prices for entry level homes high. However, there is a bit of softening happening at the higher price points, and we’re seeing some price drops starting with properties priced over $400,000.

Our May Average Home Sale Price had skyrocketed all the way up to $437,126! That was an all-time record for our area. Our June number ticked down just slightly to $429,204. Then our July number fell all the way back down to $399,936.

Median price also corrected this month, from $359,000 in June, our July number dropped to $342,500.

I expect this pricing level to continue around $400,000, at least into the Fall. As we see a rebound in inventory, and as interest rates remain high, we will see a more balanced market this Fall and Winter. Prices should normalize and I don’t expect to see new highs for the rest of the year, although slight fluctuations up and down are normal for a market like ours.

Average Prices Per Square Foot held around $200/SqFt this month.

Mortgage Rates have hovered below their peak of around 7% for most of this year, and are now creeping back up, currently at about 6.9%. This is keeping homes unaffordable for many potential buyers, creating a dampening effect on the true pent up demand for homes, especially as Millennials struggle with household formation and growing families. Many analysts foresee rates dropping sometime in 2024, and that will correspond with another wave of buyers jumping back in to the market, creating upward pricing pressure yet again. That’s why we’re recommending buyers take advantage of the opportunities we will see this Fall in order to scoop up a good deal.

What it all Means for You

Our Northwest Arkansas real estate market had a big Summer season, and we’re winding down into the Fall.

Right now, I’m seeing a big window of opportunity for buyers since prices are softening again. If you’ve been thinking about making a move, now might be a good time. You can shop as we slide into a slower market, often with price reductions on larger properties. You’ll have less competition and if rates drop in the coming years, you’ll be able to refinance for increased savings at that time.

If mortgage interest rates fall in the future, there will be another flood of buyers coming into the market and competing for the few homes that are available. In that scenario, prices will jump even higher from current levels. So locking in a good price right now may be a smart bet. Then if you can refinance into a lower rate, you’ll have the best of both worlds.

Our lender partners can fill you in on all your options, including mortgage programs that may allow you to Buy Down your rate.

Also, I’ve put together a program to find “Hidden Inventory, Off Market Homes” for my clients without all the hassle and competition from other buyers.

This has been and will continue to be our #1 Strategy to get you and your family out of your current home and into your dream home.  Let’s see what we can find together!

Just click here to learn all about the “Dream Home Finder” Program!

If you’ve been thinking you’ll wait till next year or later to make your move, I’d like to share a strategy to save you $20,000 to $30,000 and potentially hundreds of dollars off your monthly bills, depending on the equity position you have in your current home. Would that be a conversation worth having? If so, leave me a message below.

To see the strategies we’ve been implementing to sell for the most the market will bear, regardless of the time of year we’re in, Watch my “Pre-Listing Price Accelerator” Guide Here and see How To Maximize Your Home Sale. It will walk you through everything we’ve been doing at the LoneRock Team to get amazing results for our home sellers.