Northwest Arkansas (NWA) continues outperforming the national averages, even as the market slows. We took a NWA Look at the number of closed transactions and active inventory for the past 10 years ( 2014-2024).
Transaction Trends: NWA vs. National
Nationally, existing home sales have slowed significantly. According to the National Association of Realtors® (NAR), the annual pace of home sales has dropped over 20% from pre-pandemic highs, primarily due to rising mortgage rates and affordability concerns. Investor activity has also cooled as higher borrowing costs and elevated home prices compress rental cap rates.
Despite a modest decline of 0.77% from 2019’s peak of 9,759 closed transactions in Northwest Arkansas, the year-to-date 9,683 closed transactions for 2024 remain 3.8% above 2018 levels. NWA’s ability to outperform pre-pandemic averages is due to its affordability, steady population growth, and the demand for primary residences.
Inventory and Sales Trends
Northwest Arkansas has seen shifts in inventory and sales over the past decade:
- 2014–2019:
Active inventory averaged 3,725 listings annually, with a high of 4,092 in 2015.
Closed sales steadily increased year over year, reaching 9,759 in 2019.
- 2020–2021:
Inventory dropped significantly during the pandemic, hitting a low of 2,897 in 2021 as demand surged nationally.
That same year, closed transactions peaked at 11,264.
- 2022–2024:
Inventory began to recover, reaching 3,575 in 2024. While this is 3.3% higher than 2019, it remains 4% below pre-pandemic averages, indicating ongoing supply constraints.
Why Are Transactions Below 2019 Levels?
The primary factor driving the slight dip is affordability. Mortgage rates hovering around 7% have priced out some buyers, particularly first-time home buyers and investors. Unlike in 2019, when lower interest rates fueled both primary and investment property purchases, today’s higher costs mean investors face lower cap rates after accounting for expenses.
For instance, a property purchased with a 30% down payment at a 7% interest rate often sees net returns below expectations unless it’s a long-term investment. Additionally, fewer high-cap-rate rental properties are available due to rising property prices and operational costs.
Primary buyers who purchase homes to live in rather than rent continue to drive the demand, reflecting NWA’s strong appeal as a relocation destination.
What Makes NWA Stand Out?
NWA continues to attract buyers due to several factors:
- Affordability: The median home price in NWA remains competitive, at approximately $369,700, significantly lower than the national median of $418,700 (NAR Q3 2024).
- Thriving Economy: Home to Fortune 500 companies like Walmart, J.B. Hunt, and Tyson Foods, the region offers abundant job opportunities across various industries.
- Lifestyle Appeal: Buyers relocating to NWA often cite access to outdoor spaces, safer neighborhoods, and a quieter lifestyle as key motivators.
With the decline of remote work opportunities post-pandemic, Kelley Cullen, Relocation Director and Executive Broker with Collier & Associates, predicts that an increasing number of team members and associates will relocate in pursuit of job opportunities.
While the number of transactions in 2024 may not surpass 2019 levels, we expect the closed transaction volume to be above 2018. NWA’s affordability, job market, and quality of life continue to attract buyers, even as national trends present challenges. With NWA projected to reach a population of 1 million by 2050, we remain a hot spot in the national housing market, offering primary buyers and investors opportunities.
Are you looking to relocate to or within Northwest Arkansas? Contact the NWALook crew, and we will connect you with a local Real Estate Expert.
Citations: www.NAR.com, https://fred.stlouisfed.org/ ,www.Realtor.com, www.Census.gov,
Desiree Stock
(479) 409-4241
Executive Broker
Collier & Associates
Sponsored By: Black Oak Builders
Mitchell and Kelley Humbard facilitate building homes with other like-minded people who are wanting to get into investments but don’t know where to start. Mitchell and Kelley believe in good communication, taking calculated risks, quality products, family time, and working hard for the things you want in life. The Humbard's look forward to meeting you!
This article is provided for informational purposes only and is not intended as professional advice. The information contained herein is based on sources and information deemed reliable but is not guaranteed to be accurate, complete, or applicable to every situation. NWALook and any associated parties assume no liability for any errors or omissions in the content of this article or any actions taken based on the information provided. By reading this article, you agree to hold NWALook and any affiliates harmless from any and all claims, liabilities, or damages arising from or related to your use of the information provided.
NWA Real Estate Market Update
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