Arkansas Real Estate Market: What to Expect in 2024 and 2025?

The current median home sale price of $258,100 is rising slowly at just 4.1% YoY. Moreover, homes have been sitting on the market for 41 days. This indicates that the real estate market in the Natural State is now slightly less competitive.

Additionally, 3,557 homes were sold in July 2024, up from 3,276 in the previous year. Despite the competitive nature of the market, recent developments, such as the NAR settlement have caused some hesitation among sellers, leading to concerns about selling prices and agents’ compensation.

The NAR settlement has removed the buyers’ agent compensation from the MLS. This may drive down home prices further. As a result, buyers will have improved affordability along with low mortgage rates.

Here are some tips for you to sustain in Arkansas’s housing market:

• If You Are a Home Buyer: With an inventory of 14K properties and the potential for further price drops, now is a good time to buy your new home. The low interest rates at 6.12%-6.50% are also in your favor. Consider negotiating for seller concessions to further benefit from the purchase.
• If You Are a Home Seller: The correction in the home prices is long overdue. In the wake of the NAR settlement, home prices may drop a little more. If you’re a seller, you can still make profits on home sale before prices potentially drop.

So, How Is the Real Estate Market in Arkansas?

Balanced!

The number of homes for sale increased by 23.9% in July 2024 compared to the previous year. This is the 11th consecutive month the housing market has witnessed such growth. Single-family homes for sale are up by 22.8%, and condos by 79.3%.

• Median Days on Market: The median days on market for homes for sale is 41 days, up by 8 days YoY. This trend suggests a cooling demand in the Arkansas real estate market.
• Housing Inventory and Supply: As a buyer, you have more options now as the housing inventory is up by 23.9%. There are 14K homes for sale in Arkansas, with an average supply of 2 months.
• Average Home Prices: The median home price in Arkansas is $258,100. But, it is expected to decrease due to a rise in inventory in the latter half of 2024. The sale-to-list price ratio is 97.4%, dropping by 0.41 pt YoY.
• Home Sales: As per July 2024 data, home sales increased by 8.6% YoY! Only 3,557 homes were sold, compared to 3,276 last year.
• Average Rent Prices: The median rent for all property types is $1,375 with a $10 YoY decline.

Why Is Arkansas a Seller’s Market Now?

Arkansas housing market is very competitive and the buyers need to act fast in order to compete. Homes have been on the market for a median of 41 days in July, 2024. Let’s look at some more facts:

• Fewer Days on the Market: Homes are spending very few days on the market. This is visible in metro cities like Cave Springs, Highfill, and Lowell, where the average days on market are between 3 to 9 days.
• Fewer Months of Supply: Arkansas has a constant 3 months of supply. Fewer months of supply indicate a seller’s market.
• Highly Competitive Markets: Lowell and Highfill cities are very competitive and scored 83 and 87 in Redfin’s Compete Score. Cities with high compete score witness multiple offers on many homes.

Arkansas Real Estate Market Predictions

Here are the predictions for Arkansas’s housing market in the remaining months of 2024 and 2025:

1. Number of Home Buyers Will Increase: As inventory grows and homes stay on the market, more home shoppers are expected to re-enter the market.
2. Interest Rates are Expected to Drop: In August, 2024, mortgage interest rates in Arkansas hit 6.69% for a 30-year fixed mortgage. NAR predicts the national average interest rate to drop to 6.3% by year-end. This may impact state wise rates to drop as well.
3. Home Prices Will Increase: Housing demand in Arkansas is more than its supply. Homes for sale are increasing at 23.9% YoY. This combined with low interest rates will create more competition among buyers. Consequently, prices may rise in future.
4. New Home Constructions Will Shoot Up: As per Indiana Building Permits Survey, 7,498 new private housing units were authorized, in July, 2024. Arkansas’s housing market’s high demand will be served with the new constructions.
5. iBuyers Will Continue to Make Lowball Offers: iBuyers like Opendoor and Offerpad, which once offered 104.1% of market value in 2021, now offer around 70%. Such lowball offers to sellers will increase opportunities for individual buyers.

Bonus Predictions: Buyer Broker Commissions Will Be Zero!

In a shocking turn of events, the NAR settlement has completely eliminated buyer agent fees from the MLS. Let’s understand its impact:

1. Buyer Agents Will Be Affected: With buyers now responsible for directly paying their agents, many may choose to find their homes on their own. This may very soon render buyer agents obsolete.
2. Seller Concession Will Increase: Without the obligation to pay buyer agent commissions, sellers might see increased requests for seller concessions and offline transactions. Additionally, builders are offering significant concessions to attract buyers, further influencing the market dynamics.
3. Builders Will Compete More: Home builders are persuading buyers to buy new construction homes with mortgage buydowns worth $30K!
4. Sellers May Offer Fees for Services: Sellers may offer at least 1%-2% fees to the buyer agents in order to sell their homes quickly. Increasing competition from builders may also cause sellers to pay extra fees to buyer agents.

Is the Housing Market in Arkansas Going to Crash?

A housing market crash in Arkansas is unlikely. Arkansas housing market has high activity with increasing number of homes sold by 8.6% year over year.

Metro cities like Russellville (36.8%) and Sherwood (21.9%) have fastest growing sale price.

The job market remains robust, with an unemployment rate of just 3.3%. Additionally, the cost of living in Arkansas is 8% lower than the national average. This affordability makes a housing market crash in Arkansas unlikely.

2024: Is It a Buyers’ or Sellers’ Market Now?

The housing market is expected to lean more in favor of the buyers in the latter half of 2024. Home prices are rising slowly, and the number of homes for sale has increased rapidly by 23.9% YoY. Buyers now have more choices.

With mortgage rates around 6.69%, buyers also have more purchasing power. Consequently, more homeowners are likely to list their homes on Arkansas MLS. The 13.8% increase in new active home listings in Arkansas has brought back home shoppers.

So, whether you are looking for a condo or a single-family primary home, you will find your dream home in the coming months.

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Disclaimer: This article is for informational purposes only. It does not constitute an offer, solicitation of an offer, or any advice or recommendation. Houzeo doesn’t provide any legal or financial advice. The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Houzeo Corp., its affiliates, or its employees. However, the author does not make any representation or warranty, express or implied, as to the information’s accuracy or completeness, nor does the author recommend that the attached information serve as the basis of any investment decision.

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