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Is Little Rock The Best Market For Real Estate Investment In 2019?

Little Rock Arkansas Real Estate Market Conditions 2019

Little Rock, Arkansas is home to roughly 200,000 people. However, the Little Rock Arkansas real estate market is more than just Little Rock itself. The broader metro area, including North Little Rock and Conway, encompasses around 700,000 people. The Little Rock Arkansas real estate market, when you include the suburbs, is the largest metro area in the state. Let’s look at ten reasons to invest in the Little Rock housing market.

Little Rock Arkansas Real Estate Market

Pic Credits: Pixabay.com | Photo by Mindy Ambeau

Little Rock Arkansas Real Estate Market Forecast 2019

On Zillow, the median home value in Little Rock is $140,200. Little Rock Arkansas real estate trends show us that the home values have gone up 1.9% over the past year. The Little Rock Arkansas real estate forecast they will rise 2.1% in 2019. The real estate appreciation in Little Rock can further increase by 6.4% in the next 24 months and by 9.6% in the next 36 months.

little rock arkansas real estate forecast

The median list price per square foot in Little Rock is $104, which is higher than the Little Rock-North Little Rock-Conway Metro average of $99. The median price of homes currently listed in Little Rock is $199,000 while the median price of homes that sold is $143,000. The median rent price in Little Rock is $1,050, which is higher than the Little Rock-North Little Rock-Conway Metro median of $1,000.

Little Rock Arkansas Real Estate Market Forecast 2019

Graph Credits: Zillow.com

Little Rock Arkansas Real Estate Market Trends 2018

Little Rock Arkansas real estate market trends indicate a decrease of $10,400 (-6%) in median home sales a -4% drop in median rent per month over the past year. As per Trulia, the average price per square foot for this same period rose to $98, up from $98. The median sales price for homes in Little Rock for Jul 18 to Oct 17 was $171,600 based on 626 home sales. Average price per square foot for Little Rock was $98, an increase of 0% compared to the same period last year. The median rent per month for apartments in Little Rock for Sep 22 to Oct 22 was $1,050. Currently, the real estate market in Little Rock can be described as buyers market, which is an ideal time for home buyers to get in on prime real estate. A buyers market indicates that more homes are currently for sale than are being purchased, making the market competitive.

Little Rock Arkansas Real Estate Trends 2018

Graph Courtesy: Trulia.com

Little Rock Arkansas Real Estate Market Summary

  • Median Sales Price: $171,600 (On Trulia)
  • Price Per Sqft: $98
  • Median Rent Per Month: $1,050
  • Median Household Income: $43,181
  • Home Owners: 63%
  • Single Residents: 40%
  • Median Age: 38
  • College Educated: 63%

Below is the real time market data of Little Rock (Wed Dec 12 2018) By Altos Research. This week the median list price for Little Rock, AR has been $234,499 with the market action index hovering around 28. This is about the same as last month’s market action index of 28. Inventory has held steady at or around 1128. Index above 30 implies Seller’s Market conditions. Below 30, conditions favor the buyer. The market has shown some evidence of slowing recently. Both prices and inventory levels are relatively unchanged in recent weeks.

little rock ar housing market trend

Chart Credits – Altos Research®

Trulia has 1,101 resale and new homes in Little Rock lined up for you, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.

Real Estate Market Trends for Little Rock AR

Graph Credits: Trulia.com

Little Rock consists of 30 neighborhoods. There are 1,648 homes for sale, ranging from $1.8K to $6.8M on Realtor.com. In October 2018 the housing market in Little Rock, AR is a buyer’s market, which means there are roughly more active homes for sale than there are buyers. Buyer’s markets are generally more advantageous for buyers rather than sellers. The median list price of homes in Little Rock, AR was $199K, trending up 7.6% year-over-year. The median listing price per square foot was $101. The median sale price was $232K. Homes in Little Rock, AR sold for 5.06% below asking price on average in October 2018

Little Rock AR Housing Market Trends

Graph Credits: Realtor.com®

There are 88 schools in Little Rock, AR. There are 34 elementary schools, 7 middle schools, 6 high schools and 41 private & charter schools. There are 1,648 homes for sale in Little Rock, AR, 78 of which were newly listed within the last week. Additionally, there are 317 rentals on Realtor.com, with a range of $100 to $875K per month.

As per Neighborhoodscout.com, single-family detached homes are the single most common housing type in Little Rock, accounting for 63.33% of the city’s housing units. Other types of housing that are prevalent in Little Rock include large apartment complexes or high rise apartments ( 26.28%), duplexes, homes converted to apartments or other small apartment buildings ( 6.44%), and a few mobile homes or trailers ( 2.44%). The most prevalent building size and type in Little Rock are three and four bedroom dwellings, chiefly found in single-family detached homes. The city has a mixture of owners and renters, with 55.10% owning and 44.90% renting.

On Movoto, the median list price in Little Rock is $229,900. The median list price in Little Rock was less than 1% change from November to December. Little Rock’s home resale inventories is 1,096, which increased 0 percent since November 2018. The median list price per square foot in Little Rock is $107. November 2018 was $106.
Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in December.

Little Rock Arkansas Housing Market Trends

Graph Courtesy: Movoto.com

Little Rock Arkansas Foreclosures And Bank Owned Properties

Foreclosures will be a factor impacting home values in the next several years. As per Zillow, in Little Rock 2.7 homes are foreclosed (per 10,000). This is greater than the national value of 1.2. The percent of delinquent mortgages in Little Rock is 1.5%, which is higher than the national value of 1.1%. With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth. The percent of Little Rock homeowners underwater on their mortgage is 11.5%, which is higher than Little Rock-North Little Rock-Conway Metro at 10.9%.

On RealtyTrac, there are currently 207 properties in Little Rock, AR that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale in Little Rock, AR on RealtyTrac is 1,173. In October, the number of properties that received a foreclosure filing in Little Rock, AR was 87% higher than the previous month and 55% higher than the same time last year. Home sales for September 2018 were down 100% compared with the previous month, and down 100% compared with a year ago. The median sales price of a non-distressed home was $0. The median sales price of a foreclosure home in Little Rock, AR was $0, or 0% higher than non-distressed home sales.

Little Rock Arkansas Home Prices And Appreciation Rates

Real estate appreciation rates in Little Rock have tracked to near the national average over the last ten years, with the annual appreciation rate averaging 0.62% during the period. Over the last year, Little Rock appreciation rates have trailed the rest of the nation. In the last twelve months, Little Rock’s appreciation rate has been 1.54%, which is lower than appreciation rates in most communities in America. Predictions for the next year show that home values in Little Rock are expected to increase by two percent, which isn’t surprising as the past three years have shown appreciation of home values in the area.  In the latest quarter, NeighborhoodScout’s data show that house appreciation rates in Little Rock were at 2.12%, which equates to an annual appreciation rate of 8.74%. Prospective buyers will be happy to know that homes purchased in Little Rock only one year ago have gained in value by $9,379, on average. While the national average was over $15,000 during this period, the difference in initial price and cost of living compensates for this variation.

10 Highest Appreciating Little Rock Neighborhoods Since 2000: By Neigborhoodscout.com

There are 30 neighborhoods in Little Rock. Heights has a median listing price of $639.9K, making it the most expensive neighborhood. Oak Forest is the most affordable neighborhood, with a median listing price of $65K. These are the 10 neighborhoods in Cape Coral with the highest appreciation rates since 2000. For more information you can visit their site.

  1. City Center
  2. U of Arkansas for Medical Sciences / W Markham St
  3. Pulaski / Pulaski Heights
  4. E 9th St / College St
  5. Lee Ave / N Van Buren St
  6. Ampersand St / N Pierce St
  7. Philander Smith College / W 16th St
  8. E Roosevelt Rd / Bond Ave
  9. Evergreen Dr / N Mississippi St
  10. Hot Springs Junction

10 Reasons To Buy Investment Properties In Little Rock Arkansas

Should you buy investment properties in Little Rock, AR? We’ll focus on practical reasons investors would appreciate instead of generic platitudes like, “They are diverse, they have a great night scene, and look at all this history.” Here are the top 10 reasons to invest in the Little Rock Arkansas real estate market.

1. The Strong Job Market

Population growth has been twice the national average in the Little Rock housing market, and job growth has been even faster. This is bringing many people to the metro area though construction hasn’t kept up. This explains why home prices should rise at over 5% a year for the new few years, higher than the inflation rate and local wages.

2. The Affordable Real Estate

The median home price in the Little Rock housing market is $140,000. Another point in favor of the Little Rock real Arkansas estate market is the sheer number of opportunities for investors to find deals. The national mortgage delinquency rate is 1.1%, while it is 1.5% in Little Rock. In the U.S., about 8.2% of homes have negative equity, but that rate is 11.5% in the Little Rock housing market. You can find many two bedroom starter homes for $50,000-$70,000 in downtown perfect for retirees and single parents.

3. The Low Price to Rent Ratio

The Little Rock Arkansas real estate market offers affordable homes to buyers, coming in at around $100 per square foot. It also offers solid price to rent ratios for those who want to invest in single family homes. The median rent in the Little Rock metro area is about $1000, more for single family homes. You’ll easily get a 1% RV ratio. Note that the ideal RV ratio is 0.7% or better, while 0.5% is the minimum landlords can tolerate.

4. The Proportionally Large Rental Market

A variety of factors can result in a city having a larger than average proportion of renters, and the Little Rock housing market has several. The student population is a factor, and we’ll address that in detail later in this article. This is partially due to the relatively limited supply of housing and, though real estate is somewhat cheap, wages are proportionally lower, so many cannot afford to buy.

For example, the particularly large population of older disabled people and wave of young workers filling retail jobs are left to rent if and when their condition improves. On top of that is the military market. We’ll discuss that in detail later on. All of this means the rental market consists of nearly 40% of residents despite the relatively low cost of rent and real estate. Interestingly, more than 40% of those in the suburbs rent, too, for a number of reasons.

5. The Low Taxes for Real Estate

The Little Rock Arkansas real estate market is, in part, a great place to invest due to Arkansas’ low property taxes. The state has the third highest combined state-local sales tax rate, but that doesn’t matter to investors in the Little Rock housing market that don’t live there. The state’s personal income tax rate is higher than surrounding states, but the taxes are low in comparison to the national average and don’t matter much if you’re an out-of-state investor.

6. It is Landlord Friendly

Southern states are, in general, landlord friendly. According to RentCafe, Arkansas is more landlord friendly than neighboring states like Oklahoma, Louisiana and Tennessee. For example, Arkansas is unique for allowing landlords to press criminal charges against a tenant who refuses to vacate. In Arkansas, a tenant can be evicted immediately if five days late on rent. Landlords don’t have to give notice to raise rent. Tenants cannot withhold rent due to various complaints and must wait for landlord to fix things or have permission to fix it themselves. There are limits on security deposits only if you own more than 5 rental properties.

7. The Proportionally Large Student Market

Little Rock is the capital of Arkansas. Any state capital will host major universities, making them ideal for landlords who want to cater to a student population without investing in a dedicated college town. Little Rock is home to two universities in the University of Arkansas system. The University of Arkansas for Medical Sciences medical school has attracted more than two thousand students from around the country. On top of that, two smaller schools, Philander Smith College and Arkansas Baptist College, are located in the city.

8. The Massive Military Rental Market

A local military base can be a goldmine for real estate investors. Little Rock Air Force Base is located roughly 20 miles northeast of Little Rock. This massive military base is the fourth largest employer in the state, and it brings thousands of renters to the Little Rock housing market. The military base itself employs around 30,000 people.

9. It Is Attracting Retirees

Snowbirds cannot necessarily afford homes in Florida anymore, while Arizona’s summer heat and real estate valuation swings are more headache than they’re worth. The Little Rock Arkansas real estate market is seeing a minor boost from the influx of retirees to the area. They don’t just have fully staffed hospitals but a medical school. The area has affordable homes, a decent quality of life and low cost of living.

Downtown Little Rock is quite walkable, though the rest of the city requires owning a car in order to get around. That’s why Where to Retire listed Little Rock as one of its top eight cities for retirees. Military veterans are sometimes attracted to the area where they once lived and the abundant VA services here relative to the rest of the state.

10. The Development Opportunities

We could say that Little Rock is a great place to invest because it is showing up on national publication’s lists of top places to live. For example, Little Rock hit 8th out of ten top cities in Nerd Wallet’s 177 cities with more than 150,000 residents; that ranking drew on 2016 Census data. Little Rock hit number one on Kiplinger’s “10 Great Places to Live” list and 7th on their “Best Value City” list.

However, investors ideally want to buy properties to rehab and sell when a market is on the upswing or build new where they know there will be demand. Little Rock is seeing planned new development and redevelopment that investors can literally build off of. The suburbs of Little Rock are seeing development of virgin forestland. The city is actively encouraging redevelopment in downtown Little Rock, as well.

Little Rock Arkansas Real Estate Investment: Summary

If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate. You must also learn from successful real estate investors who have retired early on in their lives by investing in some of the hottest real estate markets. The strong US real estate market shows no signs of slowing, and is slated to remain among the world’s top performers in 2019. The Little Rock Arkansas real estate market offers long term value and slow growth, several large permanent populations of renters and excellent financial numbers. You can’t afford to overlook the opportunity the Little Rock housing market offers.

Little Rock Arkansas Housing Market

Pic Credits: Pixabay.com

Why is Little Rock Arkansas one of the best markets for real estate investment?

  • Newly refurbished properties w/ tenants.
  • Properties starting at $79,000.
  • Median home cost is $114,100.
  • Cost of living 10.9% lower then US avg.
  • Very low unemployment at ~4%.
  • 10-year projected job growth of 32%!
  • #1 Place to Live in the United States (Kiplinger July 2013)

Where To Buy Investment Properties In 2019?

Apart from the real estate market like Little Rock Arkansas,  you can go for the Cape Coral real estate market of fast job growth, diverse economy and market stability. The Cape Coral real estate market offers strong yields and nearly certain growth in property values without the wild swings and degree of risk Miami real estate market has. The inevitable upswing will yield a significant return on investment in the Cape Coral housing market. If you do want to fix and flip, the aftermath of a hurricane is a great time to buy. And unlike the Atlantic coast, Cape Coral isn’t hit with hurricanes as often. That means the Cape Coral housing market will come with lower insurance costs than Miami, too.

Pay scales in Cape Coral haven’t kept up with the double digit rent increases. That is in part because the large student market isn’t very sensitive to rent increases, and it is in part because they provide cheap labor that keeps wages from going up. The movement of Fort Myers residents to the relatively affordable area, too, drives up rents.

Another city that we suggest is the Boise, Idaho. The Boise real estate market has been on fire in 2018. The 2019 forecast for Boise real estate market is that it is going to be a hot investment destination for new real estate investors. One of the attractions of the Boise real estate market is the sheer number of affordable large single family homes. You could find a four bedroom home for around $200,000, roughly $100,000 below the national average, several years ago. With increasing demand, homes are still a deal at around $250,000.

Boise has very low taxes, especially compared to the West Coast. The progressive income tax tops out at 7.4%, while the sales tax is about 6%. You pay less for utilities and car insurance, too. For investors, the average 1% property tax rate is a bargain, especially when you factor in the low cost of housing. The average property tax bill is around $2300. The national average is 1.2% of the home’s assessed value and an annual property tax bill of $3000, though in places like New Jersey and New York, it could surpass $10,000.

Let us know which real estate markets you consider best for real estate investing! If you need an expert investment advise, you can fill up the form given here. One of our investment specialists will get in touch with you. Norada Real Estate Investments helps take the guesswork out of real estate investing. We can help you succeed by minimizing risk and maximizing profitability of your real estate investments.

*Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified.


Little Rock Arkansas Real Estate Market References:

Demographics
https://en.wikipedia.org/wiki/Little_Rock,_Arkansas

College market
https://en.wikipedia.org/wiki/Little_Rock,_Arkansas

Large suburban rental percent
https://www.niche.com/places-to-live/little-rock-pulaski-ar/

Landlord friendly
https://sparkrental.com/arkansas-rental-laws-guide                                https://www.rentcafe.com/blog/renting/states-best-worst-laws-renters

Taxes                                                                                                              https://uca.edu/acre/2018/06/05/arkansass-property-tax-is-low-but-what-does-that-mean-for-income-and-sales-tax-rates

the Job market
https://www.forbes.com/sites/ingowinzer/2016/10/11/investment-income-the-best-markets-for-real-estate-investment-in-the-heartland/#40a9d20540b4

Price to rent ratio
https://www.forbes.com/sites/ingowinzer/2016/10/11/investment-income-the-best-markets-for-real-estate-investment-in-the-heartland/#40a9d20540b4

The Military market
https://en.wikipedia.org/wiki/Little_Rock_Air_Force_Base

Affordability / prices
https://www.zillow.com/little-rock-ar/home-values/

Attracting retirees
https://www.kark.com/community/where-to-retire-magazine-features-little-rock/1219837056
https://www.littlerock.va.gov/

Development opportunities
https://amppob.com/little-rock-ranks-best-cities-quality-life/
https://www.arkansasonline.com/news/2018/jul/07/timber-firm-asks-little-rock-annex-180-acres-new-d/
https://katv.com/news/local/renderings-for-development-at-former-little-rock-sears-location-display-new-items

Market Trends And Forecast                                                                                          https://www.zillow.com/littlerock-ar/home-values                                                          https://www.movoto.com/little-rock-ar/market-trends                            https://www.trulia.com/real_estate/Little_Rock-Arkansas/market-trends                  https://www.realtor.com/local/Little-Rock_AR                                          https://www.neighborhoodscout.com/ar/little-rock/real-estate  https://www.realtytrac.com/statsandtrends/ar/pulaski-county/little-rock


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