Arkansas Real Estate Market Outlook

Arkansas had a less rough year when the financial crisis hit the state. It has been noted that potential buyers has to pass a now tougher mortgage screening process to qualify for a loan. This resulted to dwindling home sales since 2008. RealtyOutlook predicts that the softening in purchases will prolong through this year even if the state has not over constructed homes unlike other states.

Jonesboro prides itself for having a number of educational institutions as well as manufacturing and trade industries. The positive impact was seen in the growth of communities during the peak of the real estate market a few years back but foreclosed homes piled one after another that overwhelmed the city’s home values. Because of this, home prices will be down by a dismal 11 percent through the year.

Fayetteville is home to the University of Arkansas. Generally, rental income from students provides the city strong backing even during property crises. Yet in a deplorable result, Fayetteville has not followed suit when house values scaled dramatically. Such extreme prices caused lower demand that too many houses currently on the market reversed the price trend. For this, we set our forecast for home values to fall by 10.9 percent.

Little Rock, once the hotbed of startups, has seen fewer new businesses last year amidst the diversity in its businesses. Tight credit markets have limited firms from breaking in the market or expanding. As such, home purchases will be lower in 2009 with home values dropping by 6 percent.

Fort Smith, best known for its abundance of manufacturing plants in the area, has not had any better figures in home sales either. For two years now, buyers remain unresponsive even at bargain prices. Though this may be the case, the second largest city in the state is poised for a modest deflation of 8.6 percent compared to other cities.

Hot Springs also experienced a slowdown in home sales when only a relative few buyers picked up second homes because of tighter credit. Single family homes used to be the hot commodity but excessive loan grants to risky borrowers tragically deflated home values. This year, home prices are expected to go down by 7.9 percent even more.