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Little Rock, AR: Real Estate Market & Trends 2016

Published on Tuesday - November 15, 2016

The Little Rock real estate market remains an unpolished diamond in 2016. The first-half of the year witnessed very little traction in terms of home prices and appreciation rates, as prices for Little Rock real estate underwhelmed in comparison to the national average. Nonetheless, home prices in the second quarter continued to grow relative to last year. The Little Rock housing market also saw improvements in home affordability during the first-half. The capital of Arkansas is now among the most affordable areas in the country, benefitting a trifecta of renters, homeowners and investors alike. That said, the Little Rock real estate market should experience minimal but steady growth in the second-half of 2016.

Little Rock, AR Real Estate Market Statistics:

Little Rock real estate investments

Home appreciation has unfortunately not been Little Rock’s strong suit. One-year and three-year appreciation rates for Little Rock real estate settled at 0.8 percent and -2.4 percent during the second quarter, whereas the national average reached 4.9 percent and 17.8 percent respectively. For Little Rock real estate investors and homeowners, price trends in the last three years have undercut the steady post-recession price trend. However, when one door closes, another opens, and that includes investor opportunities. For those considering Little Rock real estate investments, the following outlines appreciation gains in previous years:

  • Homes purchased in the Little Rock, AR housing market one year ago have appreciated, on average, by $3,405. The national average was $14,963 over the same period.
  • Homes purchased in the Little Rock, AR housing market three years ago have appreciated, on average, by $4,086. The national average was $46,878 over the same period.
  • Homes purchased in the Little Rock, AR housing market five years ago have appreciated, on average, by $20,109. The national average was $82,353 over the same period.
  • Homes purchased in the Little Rock, AR housing market seven years ago have appreciated, on average, by $20,883. The national average was $77,054 over the same period.
  • Homes purchased in the Little Rock, AR housing market nine years ago have appreciated, on average, by $24,607. The national average was $31,126 over the same period.

Total equity gains for Little Rock real estate has yet to surpass the national average in the last nine years, with only homes purchased in 2005 doing so. However, while Little Rock real estate investors and homeowners pay down principle, price appreciation in the last three years has helped to build equity. Although not as significant as the rest of the country, the good news is that Little Rock real estate continues to grow, however minuscule that may be. On the flip side, investment opportunities could begin to churn in the next few years.

Another important factor in analyzing real estate markets are foreclosures. According to RealtyTrac, the month of October saw 357 properties in the Little Rock real estate market in some stage of foreclosure. Despite being low in comparison to other markets, that number represents a 51 percent increase from the previous month, and 11 percent from the same time last year. REO properties were also on the rise during the second quarter. The Little Rock real estate market saw bank owned properties rise 40 percent more than the previous month, and 31.3 percent from the previous year.

Little Rock, AR Real Estate Market Summary:

Little Rock housing market

  • Current Median Home Price: $140,700
  • 1-Year Appreciation Rate: 0.8%
  • 3-Year Appreciation Rate: -2.4%
  • Unemployment Rate: 3.7%
  • 1-Year Job Growth Rate: 2.3%
  • Population: 197,357
  • Median Household Income: $46,409

Little Rock, AR Real Estate Market (2016) — Q2 Updates:

Little Rock real estate investors

Despite lagging home prices and meager appreciation gains, the Little Rock real estate market is moving in the right direction. The median home price for Little Rock real estate grew to $140,700 during the second quarter, compared to the national average of $239,167. Although minimal, one-year appreciation rates crossed into positive territory, rising to 0.8 percent in Q2. Thankfully, the Little Rock real estate market has other factors working in its favor.

One component enhancing Little Rock real estate is the local economy. Employment has held up and on an upward trend, while unemployment in Little Rock is better than the national average and improving. The second quarter saw an unemployment rate of 3.9 percent, compared to the rest of the rest at 4.9 percent. Furthermore, one-year job growth reached 2.3 percent, wheres as the national average saw new jobs grow at a rate of 1.9 percent. In comparison to other markets, local employment growth is strong and should continue in the second-half of 2016.

Home affordability is another element working in Little Rock’s favor. Homeowners during the second quarter paid seven percent of their income to mortgage payments, whereas the national average paid more than double at 15.8 percent. The Little Rock housing market boosts one of the more affordable rental communities in the country, providing long-term benefits for investors while offering short-term appeal for rentals. New housing construction is expected to play an important role in home affordability in the coming years. The current level of new construction in Little Rock is 3.4 percent above the long-term average, while single-family housing permits extended to 7.7 percent, compared to the national average of 10.6 percent. Construction is on the rise relative to last year, which suggest that local inventory may have stabilized.

As the most populous city in Arkansas, Little Rock is expected to see expanded growth in the next 12 months. The National Association of Realtors (NAR) anticipates the Little Rock real estate market to grow by 3.9 percent, as compared to the national average of 3.6 percent. Although significant ground needs to be made up by the Little Rock real estate market, it appears better days are ahead.

*The information contained herein was pulled from third party sites. Although this information was found from sources believed to be reliable, FortuneBuilders Inc. makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. Any reliance on this information is at your own risk. All information presented should be independently verified. FortuneBuilders Inc. assumes no liability for any damages whatsoever, including any direct, indirect, punitive, exemplary, incidental, special, or consequential damages arising out of or in any way connected with your use of the information presented.

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