story by Kim Souza
ksouza@thecitywire.com
Real estate markets are often linked to economic performance but a report from Irvine, Calif.,-based RealtyTrac suggests that housing market turnarounds also favor incumbents in most of the eight hotly contested Senate races across the country. However, that may not be the case in Arkansas or Kansas.
RealtyTrac analyzed the health of local markets in more than 1,500 counties nationwide compared to two years ago. The metrics examined were housing affordability, unemployment rates, foreclosure starts and median home prices. Data found that 52% of the counties were deemed “Better Off” than two years ago, while 11% were “Worse Off” and 36% were categorized as a “Toss Up.”
“The housing market recovery has truly taken hold in about half of the country, but the recovery is weak or experiencing a relapse in the other half,” said Daren Blomquist, vice president of RealtyTrac. “Whether because of good government policy, sheer luck or otherwise, the majority of county housing markets in six of the eight states with close U.S. Senate races are better off than they were two years ago. This should favor the incumbent, or the incumbent’s party, all else being equal — which of course we know it is not. The only exceptions were Iowa and Alaska, where the majority of county housing markets were classified as toss-ups compared with two years ago.”
RealtyTrac said Arkansas’ housing market favors Democratic incumbent U.S. Sen. Mark Pryor. Of the nine counties in Arkansas with sufficient housing data to score, eight were categorized as “Better Off” while one was categorized as a Toss-Up and none were categorized as Worse Off.
Arkansas’ three largest counties — Pulaski, Benton, and Washington — all had a decrease of about 1% in unemployment rates compared with two years ago. Northwest Arkansas added 5,000 jobs between 2012 and 2013. Employment in the region reached a new annual peak of 214,500 in 2013, according to the State of Region report compiled by the Center for Business and Economic Research at the University of Arkansas.
Income growth in Benton and Washington counties has grown faster than peer regions, but still lags the national average. The median household income for the region stood at $47,905 in 2013, a 5% increase over the median household income in 2012. Average wages in Northwest Arkansas increased 5% between 2012 and 2013, to $46,133, according the UA report.
In Washington County, 17% of homeowners with a mortgage are seriously underwater, while in Benton County 14% of the homes are worth less than owed. In Pulaski County it’s 12%, according to the RealtyTrac report. That said, home prices are headed in the right direction. In Washington County, median prices are up 27% between August 2012 and August 2014. In Benton County prices have risen 29% in the same two year period, according to MountData.com.
RealtyTrac notes that home affordability for those at the median income is up 5% from two years ago in the Northwest Arkansas market.
Arkansas foreclosure starts are down in all three counties compared with two years ago: 90% in Benton County, 78% in Washington County and 70% in Pulaski County, according to RealtyTrac.
Blomquist notes in the report that while the market improvements should favor two-term Democratic incumbent Pryor, Republican challenger U.S. Rep. Tom Cotton is ahead in Arkansas polls.
“Pryor is in the fight of his political life against freshman GOP challenger Tom Cotton. Democrats are making an unprecedented push on the ground to get out the vote in the Razorback State, but it might not be enough to overcome the unpopularity of a two-term Democratic president with a 31% approval rating,” Blomquist noted.
Kansas was only other contested Senate race where the housing market recovery does not favor the incumbent. In that race an independent challenger Greg Orman has a 10% lead over Republican U.S. Sen. Pat Roberts, according to Blomquist.
RealtyTrac dubbed Alaska a toss-up state where Republican challenger Dan Sullivan is out pacing the Democratic U.S. Sen. Mark Begich with a 48 to 42 margin, according to a CBS-New York Times poll.
Blomquist said Senate races in Louisiana, Iowa, Colorado, North Carolina and Georgia favor the incumbents.