The numbers are in and there’s at least one surprise in the May 2009 housing market report for Arkansas — sales are much improved in northwest Arkansas.

To download a PDF of the latest housing market report from the Arkansas Realtors Association (ARA), just click right here. One area of the state that we at the ARA have been watching closely over the past couple of years is northwest Arkansas. Sales in Benton and Washington counties have been noticeably slower than other parts of the state, but sales were much improved in April and the same is true of May.

Specifically, there were 325 single family, new and existing homes sold in Benton County in May — up a bit from 323 sales in the same month last year. As for Washington County, 188 homes were sold in May 2009 and 2008. The consistent improvement in the number of sales is good news for both counties, but one Realtor up that way wasn’t too surprised.

Springdale Realtor Bob Downum said foreclosures are common in both counties, meaning sales are picking up as investors and families looking for bargains are flocking to the market. Downum said foreclosures have pulled down average prices considerably.

In Washington county, the average sales price was $164,703 — down 8.39 percent from $179,793 in May last year. In Benton County, the average sales price in May was $172,914 — down 2.19 percent from $176,781 a year ago. It’s worth mentioning that the May averages were higher that the year-to-date averages in both counties.

Foreclosures might not be as common in other parts of the state, but the impact of them has appeared in average sales prices throughout Arkansas. In May, the statewide average sales price was $149,984 — an improvement over the year-to-date average of $142,435, but down 2.01 percent from $153,053 in the same month last year.

On a positive not, Downum said inventory levels have declined in northwest Arkansas. In fact, inventory levels have improved throughout Arkansas this year. In March, there were enough homes in inventory to last 12.95 months. In May, the supply dropped to 12.55 months in inventory.

“The inventory is going down,” Downum said. “That’s as big as anything.”

ARA President and Cabot Realtor Bob Walker said he’s noticed prices and inventory levels dropping a bit in central Arkansas, too, but said people should keep another factor in mind when looking at market reports — there aren’t as many new homes on the market as there were a year ago. Construction has slowed, meaning new houses aren’t pumping up inventory levels and the existing homes for sale are generally priced lower than new ones.

“Those drops in prices don’t worry me,” Walker said.

The declines haven’t bothered Local Market Monitor — a real estate forecasting business based in Cary, N.C. Last month, that company issued some reports predicting that three Arkansas metropolitan statistical areas (MSA) are among those expected to perform the best in the nation over the next 12 months in terms of price.

The Little Rock-North Little Rock-Conway MSA has been projected to be one of the top performers in metros with 600,000 or more people.  The Fort Smith, Ark.-Okla. MSA and the Texarkana, Ark.-Texas MSA have been grouped with metros with less than 600,000 people that are predicted to do well over the next 12 months.

Furthermore, Walker said he’s noticed more buyers hitting the market — a welcome change from November through January when sales dropped to surprisingly low levels.

“There’s an awful lot of activity out there,” he said. “I’m seeing contracts coming across my desk at a rapid pace right now. There seems to be some more consumer confidence. … We’re having a really good summer.”

Walker said he believes there are factors other than increasing consumer confidence that are attracting buyers to the market. For one thing, the $8,000 tax credit for first time homebuyers remains popular. Also, rising interest rates have caused some people to buy homes before rates increase more.

Interest rates had been running below 5 percent on a 30-year, fixed-interest mortgage for awhile but they popped up above 5 percent in June.

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