The Little Rock real estate market has had a hard time maintaining the same pace as its national counterpart. Whereas median home values across the United States have increased for the better part of a decade, real estate in Little Rock has had to overcome a few more additional obstacles. Due largely, in part, to an economy that still has plenty of ground to make up from the last recession, Little Rock real estate trends are on the right path, but not exactly where many people would have liked to have seen them at this point in the year. Nonetheless, things appear to be heading in the right direction. Things are looking up for the whole Little Rock real estate market, and there may be no better time to invest in the area than now.
Little Rock Real Estate Market Overview
Median Home Value: $141,500
1-Year Appreciation Rate: +1.4%
Median Home Value (1-Year Forecast): +0.8%
Average Days On Market: 76
Median Rent Price: $995
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Median Home Price Little Rock
The median home value in the Little Rock real estate market is $141,500, according to Zillow’s Home Value Index. Despite being higher than pre-recession levels, however, median home values in Little Rock are considerably lower than the national average. At $231,000, the median home value in the United States is approximately $89,500 more than the median home value in Little Rock.
The disparity in price becomes more apparent over the course of the last decade. Real estate in Little Rock has appreciated at a modest rate of 15.9% since the market bottomed out in January 2012. Over the same period of time, the median home value in the United States appreciated at a rate of 55.0%. In the last year (alone), median home values across the United States increased nearly three times more than in Little Rock—4.8% and 1.4%, respectively. Not surprisingly, the trend looks like it’ll continue into next year, as Little Rock appears unable to keep up the pace set by national trends. Real estate in Little Rock is expected to appreciate over the next 12 months, albeit at a more modest pace than the rest of the country.
Little Rock real estate trends haven’t been able to keep up with the rest fo the country, but that’s not necessarily a bad thing for local investors. In fact, while many cities across the country have priced prospective buyers out of the market, Little Rock remains incredibly affordable. The city’s low cost of living should actually stimulate more housing activity, which bodes well for local investors.
Little Rock Foreclosure Statistics
The low cost of living associated with the Little Rock real estate market has mitigated the foreclosure risk for most homeowners. That’s not to say Little Rock is completely void of distressed homes, but rather that the distribution of foreclosures is relatively low. According to RealtyTrac, Little Rock is home to somewhere in the neighborhood of 124 foreclosures; that’s approximately one in every 3,895 homes, or a rate of 2.5%.
Foreclosures in Little Rock have declined year-over-year. Despite a slight uptick from August to September, the number of properties that received a foreclosure filing in Little Rock was 36% lower than the same time last year.
While Little Rock real estate trends have drastically reduced the number of foreclosures across the city, real estate investors will be happy to hear that there are still isolated pockets of distressed assets. While Little Rock’s economy has made gradual improvements for years, some counties inherently boast more distressed properties than others. The following counties have the highest distributions of foreclosures in Little Rock:
72209: 1 in every 1,983 homes is currently distressed
72210: 1 in every 2,527 homes is currently distressed
72207: 1 in every 2,806 homes is currently distressed
72206: 1 in every 3,863 homes is currently distressed
72223: 1 in every 4,842 homes is currently distressed
Little Rock Real Estate Investing
Little Rock real estate investors, not unlike investors across the country, place an emphasis on the acquisition of distressed homes. Motivated sellers are often the best source of deals with attractive profit margins. That said, there’s one type of distressed property Little Rock real estate investors should pay special considerations to: auction homes. If for nothing else, auction homes make up the largest pool of distressed properties in the Little Rock real estate market.
Of the distressed homes identified by RealtyTrac, 64.0% are expected to be placed up for auction. Therefore, Investors should look into local auctions to increase their odds of finding attractive deals. Outside of auctions, however, investors may also want to look at bank-owned homes. Repossessed assets currently owned by their loan originators represent a great opportunity, and currently make up about 36.0% of Little Rock’s distressed inventory.
Of course, knowing where to find real estate deals in Little Rock is only part of the equation. Once investors secure deals, they need to know what to do with them, which begs the question: Which exit strategies are working the best for Little Rock real estate investors? The answer is simple: all of them. However, short-term strategies appear to be more promising than their long-term counterparts at the moment. Rental properties remain a viable option for Little Rock real estate investors to consider, but rehabs are currently more conducive to success when placed in context with today’s economic indicators. The city’s affordability has increased buying demand.
Little Rock Real Estate Market Summary
The Little Rock real estate market has turned a corner. After years of trailing the national economy, things are starting to get better. While there is still plenty of ground to make up, however, the latest progress has helped the local real estate market. Improving economic conditions, in association with incredibly affordable housing options, have worked together to stimulate the Little Rock real estate market. As a result, everyone is expected to benefit: buyers, sellers and investors.
Have you thought about investing in the Little Rock real estate market? If so, what are you waiting for? We would love to know your thoughts on real estate in Little Rock in the comments below.
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