We’ve got some shocking data in our NWA Market Report recapping the month of May. Our average sale prices broke last summer’s All-Time Record of $413,779 and shot all the way up to $437,126. When I pulled MLS data earlier this week, I was truly shocked. Not only did it crush that previous record by over 5%, but it soared past last month’s Sale Prices by 9%!
Let’s back up and show you how we got there.
As we come into our Summer Selling Season, we’re still seeing strong buyer demand and lower available inventory.
We still have more homes Pending (Under Contract) than the number of Active homes in the market. And as we have been forecasting, that has resulted in our Months of Supply staying below 4 months of inventory. This means we are officially back in a Seller’s Market.
Our Closed transaction numbers jumped quite a bit, as predicted, because all those Pending homes throughout our Spring market are now starting to close. In the chart below you can see the number of Active/Pending Homes climbing to a level just slightly above our peak numbers from last year. This means we will have a few more homes in the market this year than we had last year. However, I still expect the number of closings to climb as more New Construction homes are completed and Closed this Summer.
Also, most homes are finding a buyer fairly quickly. At the Mid-to-Lower price points, we’re seeing multiple offer situations back in full force. All this is keeping Median Days on Market relatively low, with our May number coming in at 60 days.
Now, I’ve been predicting Northwest Arkansas Home Prices to break records and go well above $400,000 this Summer. But even I was surprised by the huge increase we saw in May. I’ve never seen the Average Price jump by 9% in one month! That’s unprecedented.
In April, the average sale price was $402,677, which kept pace with the March average of $402,658. Then our May number skyrocketed all the way up to $437,126!
Median price also jumped up quite a bit from $339,830 in April to $363,800 in May. This is also the highest Median Price on record, clobbering last summer’s previous record of $344,722.
I expect this pricing trend to continue, with prices rising throughout the next several months (although slight fluctuations are normal.) With this break to the high side, our sideways trend of the last year has given way to a new higher level of home prices across our region. I’d say these high prices we’ve been maintaining since last summer will now act as a floor to prices when we go into our winter downcycle, solidifying Average Sale Prices around $400,000 (or even higher going forward.)
After a full year of Mortgage Rates over 5%, Buyers are finally settling in to the new reality, and going ahead with their purchases. Despite The Federal Reserve continuing to raise its Federal Funds Rate for banks over the last several months, Mortgage Rates have hovered below their peak of around 7% and are now at about 6.8%.
Average Prices Per Square Foot climbed this month, now generally around $200/SqFt.
What it all Means for You
Our Northwest Arkansas real estate market is heading into a big Summer season.
Right now, I’m seeing a big window of opportunity, especially for sellers since prices are on the rise again. If you’ve been thinking about selling, now might be a good time to consider putting real plans in place to cash out on that equity.
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, Watch my “Pre-Listing Price Accelerator” Guide Here and see How To Maximize Your Home Sale. It will walk you through everything I’ve been doing to get amazing results for my home sellers.
Buyers will soon be facing a challenging market again. We’re already seeing Multiple Offers back in the norm. In fact one of my recent listings locked in at 4% over List Price with very favorable terms to the seller. It’s odd to see so much competition, even with these higher interest rates, but that’s the current reality of our market.
If mortgage interest rates fall in the future, there will be an even bigger flood of buyers coming into the market and competing for the few homes that are available. In that scenario, prices will jump even higher. So locking in a good price right now may be a smart bet. And if interest rates happen to go lower in the future, a refinance is always a possibility.
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!