This period saw surging home prices, shifting migration patterns, and evolving buyer behaviors.

In short, home prices in 20182023 far outstripped wage gains, creating affordability challenges for typical buyers.

Rollercoaster Sales Volume

Home sales volume experienced a rollercoaster during 20182023.

street in Arkansas

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In the late 2010s, Arkansass housing market was stable with modest growth in sales.

The Cooling Period

However, by 20222023 the market began cooling as interest rates rose sharply.

The Federal Reserves inflation-fighting rate hikes pushed mortgage rates to ~7%, dampening buyer demand.

house Arkansas

Statewide home sales slowed.

Price growth also finally tempered.

By late 2023, prices in some Arkansas markets leveled off or dipped slightly e.g.

home in Arkansas

Many of these newcomers were likely drawn by Arkansass cheaper housing and cost of living compared to pricier regions.

What Types of Properties Are Budget-Conscious Buyers Purchasing?

Arkansas is a very homeowner-oriented, low-density state, and the housing stock reflects that.

Northwest Arkansas houses

These include everything from older starter homes under 1,500 sq.

ft. to newer suburban houses the bread and butter of the market for middle-income buyers.

Limited Market for Condos and Townhomes

Condos and townhomes represent only a tiny slice of Arkansass purchases.

investing in a house

Most Arkansans, if they can afford to buy, opt for a house with a yard.

Manufactured homes are popular in rural and small-town Arkansas as an affordable path to homeownership.

Property Size and Feature Trade-offs

Property size and features that buyers chose also reflected budget trade-offs.

Fixer-uppers and older homes became more acceptable to buyers who were priced out of brand-new homes.

A key theme of the late 2010s and especially 20202021 was upsizing.

With historically low interest rates and pandemic-era lifestyle shifts, many Arkansas buyers sought to upgrade to larger homes.

For example, a family in Little Rock earning under $250K might have sold a 1,500 sq.

ft. house and purchased a 2,500 sq.

ft. home in a newer subdivision to gain extra bedrooms and an office for remote work.

Many buyers stretched their budgets knowing the monthly payments were manageable at low interest rates.

Downsizing Dynamics

Conversely, downsizing became a secondary trend, primarily among older Arkansans.

Others relocated to be closer to family or healthcare facilities.

Many older homeowners opted to age in place.

Intrastate Migration Patterns

Relocation within the state also played a role.

One clear pattern was movement toward Northwest Arkansas, the states economic powerhouse.

The FayettevilleSpringdaleRogers area (including Bentonville) saw strong job growth (e.g.

Nationally, 20202021 saw many city dwellers move to less dense areas.

However, given Arkansas cities are not very large or dense to begin with, this trend was modest.

Nationally, vacation-home sales surged in 2020 and 2021 (U.S. vacation home mortgage applications hit record highs).

Arkansas, with its lakes, rivers, and mountains, attracted some second-home interest during that boom.

However, this trend cooled significantly by 20222023.

In Arkansas, that meant the pandemic-era flurry of lake house purchases subsided.

Only the more affluent (above our $250k income cutoff) continued to actively buy vacation properties.

Regional Differences: Urban vs. NWA experienced a housing boom of unprecedented scale for Arkansas standards.

From the late 2010s through 2022, this region saw double-digit annual price gains and record sales.

Buyers in NWA increasingly included transplants from out of state and higher-income professionals, which pushed prices up.

By 2023 the average sale price in NWA exceeded $400K, far above the states average.

From 2018 to 2023, many Delta counties continued to lose residents, meaning less homebuying demand.

Home prices in these areas remained very low (often the median home values are under $100,000).

Additionally, vacant housing and low sales volume characterize these counties.

Little Rock, North Little Rock, Conway, Benton/Bryant these areas had steady, moderate growth in 20182023.

The region also saw some in-state migration (folks from rural south Arkansas moving to the capital region).

Inventory in 202021 got tight here too, and multiple-offer situations were common for nice homes under $300K.

These scenic areas (e.g.

around Mountain Home or Eureka Springs) saw upticks in homebuying from people seeking a rural lifestyle.

Lake and vacation home markets (Greers Ferry Lake, Bull Shoals, etc.)

The Urban-Rural Price Gap

One persistent regional factor is urban vs. rural price gaps.

This gap widened over the 20182023 period.

In the late 2000s, home sales and prices in Arkansas slumped.

Through the early 2010s, the states housing market was relatively sluggish and price growth was slow.

Stability vs.

Volatility

In contrast, 20182023 was a period of boom and then shock.

But the COVID-driven housing surge in 20202021 has no real analogue in the prior decade.

Construction and Inventory Changes

Another difference is construction and inventory.

Fast forward to 20202023: the combination of underbuilt supply and sudden high demand led to severe inventory shortages.

Buyer Profile Shifts

Additionally, the profile of buyers shifted.

These segments, though smaller, influenced the housing trends that owner-occupants faced.

Investor activity surged in the Arkansas market over this period.

The trend in Arkansas mirrored the broader Sun Belt, where investors remained very active despite rising interest rates.

In Arkansas, this meant entry-level houses in metro areas or rental properties in college towns were snapped up.

Vacation home buyers as mentioned had a much smaller but noteworthy effect.

During the 20202021 boom, the Ozarks and other recreational areas in Arkansas saw a bump in vacation-home purchases.

This included both in-state residents buying second cabins and out-of-state buyers discovering Arkansas.

However, this was a short-lived phenomenon.