I have mixed feelings about the proposal to build a new high school for some 3,000 future students on the site of the existing high school in Fayetteville - and the 4.9 mill tax increase it will take to build it. Perhaps the best way to express my feelings is in the form of questions…
Given the current economic factors, what are the chances of taxpayers approving a measure that would increase their property taxes by almost $165 annually? The Washington County Assessor says taxes on an average house in Fayetteville (valued at $166,075) are currently $1425. The last time I checked, Fayetteville school taxes were the highest in NW Arkansas.
It’s expected those 4.9 mills will be on the tax bills for 30 years and when the economy improves and property values start increasing again, the $165 will go up in accordingly.
The strange thing about taxes is that they seldom if ever go down. By the time 30 years has passed no one seems to remember the increase was scheduled to stop. It’s usually a case of “Let’s continue those mils because we have many needs to fulfill.”
Fayetteville voters have, in recent years, been reluctant to pass millage increases. The largest millage increase passed by voters in the past 20+ years was 4% and many a proposal has been defeated.
Is it truly in the best interest of all parties to build the new school on the current site? I know public meetings were held with all sorts of factors and wishes considered but I sometimes think a better choice would be to build on a more level site to lower costs and remove disruptive construction activities while classes are in session.
I also think many taxpayers will readily recall the fact that the Fayetteville school board had the opportunity to sell the existing high school site to University of Arkansas for $50 million – money that would have gone a long way towards the cost of a new school at a different location and a much lower tax increase.
Fayetteville always wants something better than surrounding areas to set it apart - but at what cost? Is it really necessary to demolish the addition built in 1991 because to remodel it is not good enough for Fayetteville? Rogers used part of an existing site when it built a new high school and saved their taxpayers a good piece of change.
But the most interesting aspect of the entire proposal is this: $83 million to build the school but the school district is asking for $113 million – a difference of $30 million they say is needed for furnishings, specialized construction of classrooms, technology, staffing, and other operation costs.
Fayetteville’s proposal to build five smaller, friendlier buildings instead of one big building also adds to the cost plus the district says it will need more staffing for five buildings than it would for one large school.
Let’s look at the cost per student of Fayetteville’s proposal. At $83 million amount, that’s estimated to be $27,667 per student. At $113 million, that’s $37,667 per student. Springdale’s cost per student was $18,619, Rogers was $15,600 per student, and Bentonville came in at $17,534.
How much extra will it cost to make the new school LEED (Leadership in Energy and Environmental Design) compliant? The LEED Council says schools built to their standards use approximately 1/3 less energy and water and create some 75% less solid waste. The Council estimates building to LEED standards adds about 2% to construction costs. Everyone is thinking about the environment these days and Fayetteville as a whole is trying to go ‘green,’ so the LEED certification certainly seems desirable.
No one wants higher property taxes but everyone wants the best school possible. Now that I’ve just written that sentence, it screams out at me – COMPROMISE! Let’s build the best school we can afford!
Fayetteville is a great place to live, work and raise a family but does it need the most expensive public school ever built in our state? I really have trouble justifying the money it will take to earn that distinction.
I think the district has much hard work ahead to sell this proposal to the taxpayers. There’s a lot to consider before the September election.
For more information:
http://www.nwarktimes.com/nwat/News/77657
http://www.nwaonline.net/articles/2009/06/25/news/062609fzfayschlbrd.txt
http://www.nwaonline.net/articles/2009/06/18/columns/brenda_blagg/061909blagg.txt
http://www.nwarktimes.com/nwat/News/77779
http://www.fayar.net/community/p21ccharetteinfo.html
http://www.nwarktimes.com/nwat/News/77972/
http://www.nrdc.org/buildinggreen/leed.asp
Saturday, July 11, 2009
Wednesday, July 01, 2009
Points to Ponder Regarding “Short Sales” and Foreclosures in NW Arkansas
This post is somewhat long—but the topic is complicated. Be patient and bear with me.
A lot of what’s on the market right now in NW Arkansas is either a short sale or a foreclosure (REO). This type of property is called a “distressed” property, and is very common across the country as well as in NW Arkansas.
When a home is sold for less than what the seller owes the lender, it is called a “short sale.”
In that case, the seller’s lender must approve the sale. But this is not as easy as it sounds.
Short sales were originally seen as a good deal for homeowners who found themselves in the sad position of owing more than their home was worth in the current market. It seemed simple enough for those sellers who were being relocated or absolutely had to sell for other reasons--get the mortgage holder (bank or other lender) to sign off on the sale, and everything would be over and done with. The seller would list and sell for less than what was owed, get a recordation of release or Satisfaction of Mortgage from the mortgage lender upon receipt of funds.
However, to sell a home as a short sale requires that the seller have a bona fide emergency (i.e. medical emergency, etc.) and not be able to sell his/her home under normal circumstances. This is a pre-foreclosure measure to try to protect the seller’s credit. But there is a lot of paperwork involved (including a “hardship letter”), and the banks are extremely slow to approve this type of transaction, despite recent government incentives to do so. Also, unlike REO or foreclosure properties, procedures for dealing with short sales within financial institutions have not yet been established and often take a long time. Thus even agents who specialize in short sales often have trouble getting the banks of their sellers to agree.
Ultimately if a seller has other assets (which would allow him to pay off his mortgage), is current on his payments, or is in the process of bankruptcy, the seller may not qualify for a short sale. Just being “upside down” with regard to selling one’s home is not enough.
On top of it all, it often turns out that buried in some fine print somewhere, mortgage holders have the right to pursue the difference between what was owed and the sales price. If the property has a second mortgage, a separate negotiation with that lender would also be required.
Lawsuits are becoming more frequent as lenders pursue every option to recoup their losses, especially if they determine the seller has other assets as opposed to being bankrupt.
Another aspect of short sales that was frequently overlooked is the income tax due on the amount of forgiven debt. In the past, IRS ruled that the amount of the discharged indebtedness had to be added to gross income for that year.
Now the feds have given a temporary break to most homeowners who sell short. A special form, Form 982-Reduction of Tax Attributes Due to Discharge of Indebtedness, needs to be filed with IRS.
Not to be overlooked is how state tax commissions will treat the situation. I highly recommend that anyone in this position consult with a tax professional, not to mention a real estate professional who specializes in this type of transaction.
If this all seems to be too complicated, the most important thing that people, who are behind on their mortgages, can do is talk to their lenders. It may take some doing to find the right person to talk to, but sometimes arrangements can be made for paying back their loans on new terms, etc. (i.e., loan modifications), so as to avoid a short sale or foreclosure. Basically the first step for people who want to remain in their homes is to contact their lender to see if there is a way to make an arrangement. They should not avoid calls from their lender when they are behind on their payments.
There are also important issues for buyers of properties listed as “potential” short sales.
Getting approval from the seller’s lender in a short sale situation often takes a long time – average about 90 days, and sometimes more. Thus if a buyer needs to "lock in" his interest rate for a 30- or 45-day period, there’s a good chance the short sale will not be able to close in that time.
From my point of view as a buyer agent, purchasing foreclosed properties (many of which are listed by realtors) may be easier and quicker than purchasing a property as a short sale. Those properties have already passed through the foreclosure process and can usually close in a normal time frame.
But there are also pitfalls there. First, foreclosure properties are normally sold “as-is, where-is”, which means that what you see is what you get. The seller (bank or other financial entity) will not be doing any repairs.
According to the normal Arkansas real estate contracts from the Arkansas Realtors Association, a buyer has 10 business days to have an inspection. If issues that make the buyer not want to purchase the home arise, the buyer can get out of the contract and get his earnest money back. There will be no repairs on the property, but at least the buyer will know what it will take to bring the property back to livable condition.
But in a recent training course which I attended on “distressed” properties, the instructors recommended that buyers take the inspector with them when they view the property even before making their first offer. If there is a major issue which will require extensive repairs, the inspector (without a written report and at a lesser price than a normal inspection) may be able to give an indication of what is wrong with the house before even making an offer. This would influence the offering price, while taking into account the cost to fix the problem.
Another aspect of foreclosures having to do with problems financing the foreclosed home, especially if it needs extensive work to make it livable and thus make it possible for the buyer’s loan to be approved. Banks and other financial institutions, who own the properties in question, do not want to make repairs, so if a home needs work, there may be a problem to get the buyer’s loan approved.
Normally mortgage loans permit buyers to purchase homes in livable condition. If the foreclosed home needs extensive repairs to put it in livable condition, there are a number of alternatives. If the home is a Fannie Mae owned home it may be eligible for Homepath Financing which will allow financing for the repairs. Freddie Mac has a program called Home Steps financing for homes owned by them.
If the home is not Fannie Mae or Freddie Mac owned, the FHA 203K program may provide a solution. This type of loan allows for funds to make repairs and bring the home into livable condition. However, most banks do not do this type of loan, so make sure the loan originator is familiar with the new “streamlined” version of this loan and can get it closed. Your realtor can help with recommendations in this regard.
The current real estate market situation is extremely complicated for sellers, especially those with problem mortgages. Often it depends on who “owns” your mortgage if you are having a problem. The people you make your payments to may not own your mortgage, but rather only be the “servicer”. If you are a seller wanting to sell your home, check with your realtor and your lender, especially if you are having problems.
The easiest solution ultimately (if you are a buyer) is when you can find a “normal” property, which is priced to compete with short sales and foreclosed properties. Normal properties at excellent prices are available and the buyer is less apt to run into title or other problems that more frequently rear their ugly heads on foreclosed properties or lengthy negotiations with lenders involved in a short sales.
The important thing is to have a buyer agent, knowledgeable about the market. Your agent can do a market analysis of recent sales in the area so you don’t pay too much and check on the history of the home to determine “wiggle room” for a potential offer.
And if you are a seller who does not have to sell and can continue to pay your mortgage, it is best that you do so and not put your home on the market now. This market will not last forever.
It’s a great time to purchase a home now, but not necessarily a great time to sell—except if you can save more money on the buying side compared to what you are losing on the seller’s side. And if you are an investor, there are some phenomenal “deals” out there now.
Your experienced real estate agent can guide you through the pitfalls of the current complicated market whether you are a buyer or a seller.
Look for a new forthcoming section about foreclosures and short sales on my main website at www.JudyLuna.com. I hope to have it up in a week or two. There will be more detailed information there.
For more information:
http://online.wsj.com/article/SB124104990739271023.html
http://www.fanniemae.com/homepath/homebuyers/buying_fanniemaeowned.jhtml
http://www.freddiemac.com
http://www.hud.gov
A lot of what’s on the market right now in NW Arkansas is either a short sale or a foreclosure (REO). This type of property is called a “distressed” property, and is very common across the country as well as in NW Arkansas.
When a home is sold for less than what the seller owes the lender, it is called a “short sale.”
In that case, the seller’s lender must approve the sale. But this is not as easy as it sounds.
Short sales were originally seen as a good deal for homeowners who found themselves in the sad position of owing more than their home was worth in the current market. It seemed simple enough for those sellers who were being relocated or absolutely had to sell for other reasons--get the mortgage holder (bank or other lender) to sign off on the sale, and everything would be over and done with. The seller would list and sell for less than what was owed, get a recordation of release or Satisfaction of Mortgage from the mortgage lender upon receipt of funds.
However, to sell a home as a short sale requires that the seller have a bona fide emergency (i.e. medical emergency, etc.) and not be able to sell his/her home under normal circumstances. This is a pre-foreclosure measure to try to protect the seller’s credit. But there is a lot of paperwork involved (including a “hardship letter”), and the banks are extremely slow to approve this type of transaction, despite recent government incentives to do so. Also, unlike REO or foreclosure properties, procedures for dealing with short sales within financial institutions have not yet been established and often take a long time. Thus even agents who specialize in short sales often have trouble getting the banks of their sellers to agree.
Ultimately if a seller has other assets (which would allow him to pay off his mortgage), is current on his payments, or is in the process of bankruptcy, the seller may not qualify for a short sale. Just being “upside down” with regard to selling one’s home is not enough.
On top of it all, it often turns out that buried in some fine print somewhere, mortgage holders have the right to pursue the difference between what was owed and the sales price. If the property has a second mortgage, a separate negotiation with that lender would also be required.
Lawsuits are becoming more frequent as lenders pursue every option to recoup their losses, especially if they determine the seller has other assets as opposed to being bankrupt.
Another aspect of short sales that was frequently overlooked is the income tax due on the amount of forgiven debt. In the past, IRS ruled that the amount of the discharged indebtedness had to be added to gross income for that year.
Now the feds have given a temporary break to most homeowners who sell short. A special form, Form 982-Reduction of Tax Attributes Due to Discharge of Indebtedness, needs to be filed with IRS.
Not to be overlooked is how state tax commissions will treat the situation. I highly recommend that anyone in this position consult with a tax professional, not to mention a real estate professional who specializes in this type of transaction.
If this all seems to be too complicated, the most important thing that people, who are behind on their mortgages, can do is talk to their lenders. It may take some doing to find the right person to talk to, but sometimes arrangements can be made for paying back their loans on new terms, etc. (i.e., loan modifications), so as to avoid a short sale or foreclosure. Basically the first step for people who want to remain in their homes is to contact their lender to see if there is a way to make an arrangement. They should not avoid calls from their lender when they are behind on their payments.
There are also important issues for buyers of properties listed as “potential” short sales.
Getting approval from the seller’s lender in a short sale situation often takes a long time – average about 90 days, and sometimes more. Thus if a buyer needs to "lock in" his interest rate for a 30- or 45-day period, there’s a good chance the short sale will not be able to close in that time.
From my point of view as a buyer agent, purchasing foreclosed properties (many of which are listed by realtors) may be easier and quicker than purchasing a property as a short sale. Those properties have already passed through the foreclosure process and can usually close in a normal time frame.
But there are also pitfalls there. First, foreclosure properties are normally sold “as-is, where-is”, which means that what you see is what you get. The seller (bank or other financial entity) will not be doing any repairs.
According to the normal Arkansas real estate contracts from the Arkansas Realtors Association, a buyer has 10 business days to have an inspection. If issues that make the buyer not want to purchase the home arise, the buyer can get out of the contract and get his earnest money back. There will be no repairs on the property, but at least the buyer will know what it will take to bring the property back to livable condition.
But in a recent training course which I attended on “distressed” properties, the instructors recommended that buyers take the inspector with them when they view the property even before making their first offer. If there is a major issue which will require extensive repairs, the inspector (without a written report and at a lesser price than a normal inspection) may be able to give an indication of what is wrong with the house before even making an offer. This would influence the offering price, while taking into account the cost to fix the problem.
Another aspect of foreclosures having to do with problems financing the foreclosed home, especially if it needs extensive work to make it livable and thus make it possible for the buyer’s loan to be approved. Banks and other financial institutions, who own the properties in question, do not want to make repairs, so if a home needs work, there may be a problem to get the buyer’s loan approved.
Normally mortgage loans permit buyers to purchase homes in livable condition. If the foreclosed home needs extensive repairs to put it in livable condition, there are a number of alternatives. If the home is a Fannie Mae owned home it may be eligible for Homepath Financing which will allow financing for the repairs. Freddie Mac has a program called Home Steps financing for homes owned by them.
If the home is not Fannie Mae or Freddie Mac owned, the FHA 203K program may provide a solution. This type of loan allows for funds to make repairs and bring the home into livable condition. However, most banks do not do this type of loan, so make sure the loan originator is familiar with the new “streamlined” version of this loan and can get it closed. Your realtor can help with recommendations in this regard.
The current real estate market situation is extremely complicated for sellers, especially those with problem mortgages. Often it depends on who “owns” your mortgage if you are having a problem. The people you make your payments to may not own your mortgage, but rather only be the “servicer”. If you are a seller wanting to sell your home, check with your realtor and your lender, especially if you are having problems.
The easiest solution ultimately (if you are a buyer) is when you can find a “normal” property, which is priced to compete with short sales and foreclosed properties. Normal properties at excellent prices are available and the buyer is less apt to run into title or other problems that more frequently rear their ugly heads on foreclosed properties or lengthy negotiations with lenders involved in a short sales.
The important thing is to have a buyer agent, knowledgeable about the market. Your agent can do a market analysis of recent sales in the area so you don’t pay too much and check on the history of the home to determine “wiggle room” for a potential offer.
And if you are a seller who does not have to sell and can continue to pay your mortgage, it is best that you do so and not put your home on the market now. This market will not last forever.
It’s a great time to purchase a home now, but not necessarily a great time to sell—except if you can save more money on the buying side compared to what you are losing on the seller’s side. And if you are an investor, there are some phenomenal “deals” out there now.
Your experienced real estate agent can guide you through the pitfalls of the current complicated market whether you are a buyer or a seller.
Look for a new forthcoming section about foreclosures and short sales on my main website at www.JudyLuna.com. I hope to have it up in a week or two. There will be more detailed information there.
For more information:
http://online.wsj.com/article/SB124104990739271023.html
http://www.fanniemae.com/homepath/homebuyers/buying_fanniemaeowned.jhtml
http://www.freddiemac.com
http://www.hud.gov
Saturday, June 20, 2009
More Good News for NW Arkansas
NW Arkansas was ranked 2nd best in the country on Forbes Magazine’s recent list of best and worst cities for recession recovery. Forbes projected Northwest Arkansas' gross domestic product to grow from $13.9 billion to $14.5 billion by 2010.
It’s always refreshing to see good news about our area and to know that prestigious organizations recognize the good things happening here.
Of course, this is not the first time for such recognition. NW Arkansas frequently receives excellent ratings in such areas as Best Places to Retire and Best Places to Raise a Family by Sperling’s and Kiplinger as well as Forbes.
Just a few weeks ago, Forbes ranked our area as 4th Best Place in the country for business and careers.
And we continue to add about 100 new jobs each month - admittedly fewer jobs than a couple of years ago but is still a positive figure by anyone’s standards.
Other news reports this week continued the encouraging news.
Arkansas surpassed all but six states in personal income growth in the first quarter. Only 11 states were able to report a rise in income. Average for the whole country was a negative ½ of 1%.
Arkansas had the largest drop of all states in initial unemployment claims for the week ending June 6, a decline of 1,206 claims compared with the previous week, the department said.
I’m not saying everything is rosy – we all know it could be better. But good news is good news and these days anything good is worth knowing.
For more information:
http://www.forbes.com/2009/06/09/recession-economy-cities-business-beltway-recovery-cities_slide_3.html
http://www.nwarktimes.com/adg/National/262305/
http://www.arkansasbusiness.com/article.aspx?zone=AB_DailyReport_Thursday&lID=&sID=&ms=&cID=Z&aID=115496.54928.127622&page=2
http://www.nwarktimes.com:80/adg/News/262123
It’s always refreshing to see good news about our area and to know that prestigious organizations recognize the good things happening here.
Of course, this is not the first time for such recognition. NW Arkansas frequently receives excellent ratings in such areas as Best Places to Retire and Best Places to Raise a Family by Sperling’s and Kiplinger as well as Forbes.
Just a few weeks ago, Forbes ranked our area as 4th Best Place in the country for business and careers.
And we continue to add about 100 new jobs each month - admittedly fewer jobs than a couple of years ago but is still a positive figure by anyone’s standards.
Other news reports this week continued the encouraging news.
Arkansas surpassed all but six states in personal income growth in the first quarter. Only 11 states were able to report a rise in income. Average for the whole country was a negative ½ of 1%.
Arkansas had the largest drop of all states in initial unemployment claims for the week ending June 6, a decline of 1,206 claims compared with the previous week, the department said.
I’m not saying everything is rosy – we all know it could be better. But good news is good news and these days anything good is worth knowing.
For more information:
http://www.forbes.com/2009/06/09/recession-economy-cities-business-beltway-recovery-cities_slide_3.html
http://www.nwarktimes.com/adg/National/262305/
http://www.arkansasbusiness.com/article.aspx?zone=AB_DailyReport_Thursday&lID=&sID=&ms=&cID=Z&aID=115496.54928.127622&page=2
http://www.nwarktimes.com:80/adg/News/262123
Sunday, May 31, 2009
Open House Today 2-4 p.m.
Open house today at 2427 Summeroak in the Pinewood Subdivision north of Springdale. This home has everything that most folks want--over 3000 sf, 4 bedrooms plus office, 3.5 baths, 3-car garage, granite counters, 2 living areas, wood floors, crown molding, covered patio and more. $322,000. Pinewood subdivison is conveniently located and has a community pool and clubhouse, playground, and a pond for catch and release fishing. Smith Elementary and Harber High.
Directions: From I-540, take the Elm Springs exit, go east on Elm Springs Road, turn left (north) on 40th St., turn left (west on Falcon), turn right (north) on Pinewood. Turn right into subdivision. Turn right at T. House is toward the end of Summeroak on the right.
Directions: From I-540, take the Elm Springs exit, go east on Elm Springs Road, turn left (north) on 40th St., turn left (west on Falcon), turn right (north) on Pinewood. Turn right into subdivision. Turn right at T. House is toward the end of Summeroak on the right.
Getting from Here to There--Transportation in NW Arkansas
I came across an article the other day regarding a proposal for a high-speed, state-of-the-art rail line that might someday run between San Diego, California and Vancouver, B.C. While I don’t expect NW Arkansas will ever be ready for something like that, it did get me thinking (again) about the need to improve transportation in our area.
I’ve written about this problem before – but I don’t see a lot of significant progress.
For example, plans for a proposed light rail system in NW Arkansas don’t seem to be any further along than they were a couple of years ago. In fact, I don’t know if they’re still on the drawing board.
NW Arkansas is still very “car” oriented. There are decent bus lines but the funding is limited which means the routes are limited. The majority of folks in NW Arkansas have multiple vehicles and multiple garages to house them. Want to go to the movies? Get in the car! Want a hamburger? Get in the car! We bank from our car, get our prescriptions and other items at the drive-through. This love affair with the automobile will not help the new "Green" image NW Arkansas is trying to promote.
Meanwhile, traffic on I-540 and the connector roads during the rush hours grows worse by the day. I-540 needs to be widened to 6 lanes (3 north, 3 south). There’s good news lately about the Bella Vista bypass. Currently, the high-speed interstate ends in Bella Vista and cars and trailer trucks crawl through a town with several traffic lights. When the traffic finally reaches Missouri, the road once again becomes a high-speed highway. Lack of funding has delayed this project for years.
Now it appears the Arkansas and Missouri highway commissions will make a joint request for funds for the Bella Vista bypass from the $1.5 billion federal stimulus money being made available to states for major highway projects.
The proposed Hwy. 412 bypass north of Springdale was finally approved last year but doesn't have the money to even acquire the land--never mind actual construction.
My mother used to say "make hay while the sun shines." The sun is now glowing brighter than ever with the $787 billion economic stimulus bill Congress approved plus we have a sympathetic ear in Washington these days.
Those in positions to do something about the transportation situation in NW Arkansas should get on the stick and do whatever it takes to obtain funding for necessary infrastructure improvements. If we can’t get a light rail system up and running, we need to improve roads.
The city of Springdale has been proactive in developing alternative routes to Hwy. 412 for east/west transportation, which was always a nightmare, especially during rush hour. Huntsville Road is now almost done with 4-5 lanes from I-540 going east to Hwy. 412. The new Don Tyson Parkway across the south side of town was exceptional planning and now provides a great alternative to Hwy. 412. And work continues on another east-west road across the northern part of the city. Springdale has shown great foresight in passing bonds to get these improvements completed.
Rogers built a new exit from I-540 to the Pinnacle Hills Mall. Another example of foresight is the recently widened New Hope Road.
Bentonville improved S. Walton Blvd. from a little two-lane road to 5-lanes (and it’s jammed with traffic). I can’t imagine how that city could have grown as it has without widening that major road.
Contrast this to Fayetteville, where the ‘head in the sand’ mentality seems to prevail with regard to growth. The ‘Keep Fayetteville Funky’ folks would like that growth not happen, but it is happening and must be dealt with in a positive manner and with foresight. I don’t mean to imply Fayetteville hasn’t done anything. Indeed, the widening of Hwy. 16 West (Wedington) has really improved transportation to I-540. And in the near future, a similar project will widen Mt. Comfort Road.
On the other hand, getting from the east side of Fayetteville to the west side (or vice versa) is a nightmare. Having a mountain in the middle of town doesn't help, of course, but people rightfully expect to move expeditiously from one side of town to the other and funky little two-lane roads do not cut it.
The wider Joyce Blvd. is great, but we also need wider and easier access on the south end of town and through the middle of town. I can't picture a 4-5 lane through the historic district, so Township would seem to be IT in this regard. There was a proposal several years ago to make Township a 4-lane road from Crossover to Gregg Street. It was blocked by residents along that route, especially from College to Crossover, and I fully sympathize with property owners there. On the other hand, the few residents that this would have affected need to be cognizant of larger goals.
If we are proactive in transportation and infrastructure, our area will continue to be on national lists of "10 Best" places to live. If we keep burying our heads in the sand while hoping for a miracle, growth will come to a stand still along with the traffic.
This area is still growing and will continue to do so. Any major improvement will take years and lots of money to accomplish but if we formulate tangible plans and work with our elected officials in Washington, it might be possible to get moving. It’s time to get on the stick and do whatever it takes to obtain funding for necessary infrastructure.
If we can’t get a light rail system up and running, or at least a public bus system, we need to improve roads.
For more information:
http://www.hispanicbusiness.com/news/2009/5/11/highspeed_rail_may_connect_california_to.htm
http://www.arkansashighways.com/Environ/SpecialStudies/001966/001966.htm
http://nwasource.com/gov/2009/03/13/state-will-file-bella-vista-bypass-application/
I’ve written about this problem before – but I don’t see a lot of significant progress.
For example, plans for a proposed light rail system in NW Arkansas don’t seem to be any further along than they were a couple of years ago. In fact, I don’t know if they’re still on the drawing board.
NW Arkansas is still very “car” oriented. There are decent bus lines but the funding is limited which means the routes are limited. The majority of folks in NW Arkansas have multiple vehicles and multiple garages to house them. Want to go to the movies? Get in the car! Want a hamburger? Get in the car! We bank from our car, get our prescriptions and other items at the drive-through. This love affair with the automobile will not help the new "Green" image NW Arkansas is trying to promote.
Meanwhile, traffic on I-540 and the connector roads during the rush hours grows worse by the day. I-540 needs to be widened to 6 lanes (3 north, 3 south). There’s good news lately about the Bella Vista bypass. Currently, the high-speed interstate ends in Bella Vista and cars and trailer trucks crawl through a town with several traffic lights. When the traffic finally reaches Missouri, the road once again becomes a high-speed highway. Lack of funding has delayed this project for years.
Now it appears the Arkansas and Missouri highway commissions will make a joint request for funds for the Bella Vista bypass from the $1.5 billion federal stimulus money being made available to states for major highway projects.
The proposed Hwy. 412 bypass north of Springdale was finally approved last year but doesn't have the money to even acquire the land--never mind actual construction.
My mother used to say "make hay while the sun shines." The sun is now glowing brighter than ever with the $787 billion economic stimulus bill Congress approved plus we have a sympathetic ear in Washington these days.
Those in positions to do something about the transportation situation in NW Arkansas should get on the stick and do whatever it takes to obtain funding for necessary infrastructure improvements. If we can’t get a light rail system up and running, we need to improve roads.
The city of Springdale has been proactive in developing alternative routes to Hwy. 412 for east/west transportation, which was always a nightmare, especially during rush hour. Huntsville Road is now almost done with 4-5 lanes from I-540 going east to Hwy. 412. The new Don Tyson Parkway across the south side of town was exceptional planning and now provides a great alternative to Hwy. 412. And work continues on another east-west road across the northern part of the city. Springdale has shown great foresight in passing bonds to get these improvements completed.
Rogers built a new exit from I-540 to the Pinnacle Hills Mall. Another example of foresight is the recently widened New Hope Road.
Bentonville improved S. Walton Blvd. from a little two-lane road to 5-lanes (and it’s jammed with traffic). I can’t imagine how that city could have grown as it has without widening that major road.
Contrast this to Fayetteville, where the ‘head in the sand’ mentality seems to prevail with regard to growth. The ‘Keep Fayetteville Funky’ folks would like that growth not happen, but it is happening and must be dealt with in a positive manner and with foresight. I don’t mean to imply Fayetteville hasn’t done anything. Indeed, the widening of Hwy. 16 West (Wedington) has really improved transportation to I-540. And in the near future, a similar project will widen Mt. Comfort Road.
On the other hand, getting from the east side of Fayetteville to the west side (or vice versa) is a nightmare. Having a mountain in the middle of town doesn't help, of course, but people rightfully expect to move expeditiously from one side of town to the other and funky little two-lane roads do not cut it.
The wider Joyce Blvd. is great, but we also need wider and easier access on the south end of town and through the middle of town. I can't picture a 4-5 lane through the historic district, so Township would seem to be IT in this regard. There was a proposal several years ago to make Township a 4-lane road from Crossover to Gregg Street. It was blocked by residents along that route, especially from College to Crossover, and I fully sympathize with property owners there. On the other hand, the few residents that this would have affected need to be cognizant of larger goals.
If we are proactive in transportation and infrastructure, our area will continue to be on national lists of "10 Best" places to live. If we keep burying our heads in the sand while hoping for a miracle, growth will come to a stand still along with the traffic.
This area is still growing and will continue to do so. Any major improvement will take years and lots of money to accomplish but if we formulate tangible plans and work with our elected officials in Washington, it might be possible to get moving. It’s time to get on the stick and do whatever it takes to obtain funding for necessary infrastructure.
If we can’t get a light rail system up and running, or at least a public bus system, we need to improve roads.
For more information:
http://www.hispanicbusiness.com/news/2009/5/11/highspeed_rail_may_connect_california_to.htm
http://www.arkansashighways.com/Environ/SpecialStudies/001966/001966.htm
http://nwasource.com/gov/2009/03/13/state-will-file-bella-vista-bypass-application/
Sunday, May 24, 2009
1st Quarter 2009 Skyline Report
On Friday, May 15, I attended the breakfast meeting at the Holiday Inn Convention Center in Springdale where the first quarter 2009 Skyline Report highlights were presented. Kathy Deck, Director of the U of A Center for Business and Economic Research, talked about the NW Arkansas housing market—especially conditions in Washington County, and Scott Phillips, Senior Fixed Income Portfolio Manager for Arvest, talked about some trends in the national economy which give a ray of hope that the current recession may be starting a recovery.
According to Phillips, to date there have been $1.4 trillion in losses at global financial firms. The current estimate is that such losses will go to $3.4 trillion before the recession ends. Consumer confidence is still declining nationally, and as people save more, that’s actually bad for the economy, since they aren’t spending money. On a positive note, however, consumer debt and bank lending corrections are decreasing, but unemployment rates are still high and are expected to go higher.
In response to a question from the audience, Phillips noted that for people who have lost a lot of money in the stock market, the estimate is that it will take anywhere from 3.5 to 8 years to recoup those losses. He indicated that the lowest the stock market fell was on March 9 of this year and has been rising slowly since then. Normally, he said, stock prices bottom out before earnings.
He also indicated that although the economy remains in recession, credit conditions are slowly improving. It’s a good time to purchase stocks while they are still “slightly cheap.”
For the housing market segment, Kathy Deck began where she usually does, with employment numbers, since positive job growth is what normally attracts people to NW Arkansas. Those people, in turn, purchase homes and generally determine the condition of the real estate market, including residential, multifamily and commercial sales and rentals.
Whereas in the past, NW Arkansas seemed to be immune from the type of job loss that was occurring in other parts of the country, the first quarter of this year saw the destruction of about 1300 jobs here, a decline of approximately 1% in non-farm employment. The only sectors in which there was positive job growth were Education and Health, Professional and Business Services, and in the Leisure and Hospitality sector. All other types of employment experienced job loss. Government remained steady.
The commercial sector in NW Arkansas saw very little in the way of building permits in the first quarter, and the amount of available square footage rose in Fayetteville and Springdale, as well as in NW Arkansas as a whole.
For multifamily, the vacancy rates have risen. In Fayetteville this is because of new spaces being added, in the form of new apartment complexes being built. For Springdale, it is because of population movement away from the city.
In the residential sector, the number of building permits issued for Fayetteville is the lowest it has been for many years, less than 50 for the whole first quarter, compared to over 200 during each of the peak 2nd and 3rd quarters of 2005. For Springdale only about 25 residential building permits were issued during Q1, and in West Washington County (which includes communities such as West Fork, Prairie Grove, Lincoln, etc.) new building permits were essentially at zero for the quarter. Nevertheless, the value of the average building permit in NW Arkansas has been rising in Washington County to approximately $190,000.
Needless to say, the number of houses under construction in active subdivisions has also declined, as has the absorption rate. The number of available lots in active subdivisions also showed a small decline compared with Q1 of last year, a positive step. Also showing declines were the number of homes sold in Washington County during Q1 and the average price per house sold.
Unlike in the past, according to Deck, declines in absorption are now because people are not purchasing enough homes. In the past it was because of over-building. Because of the low number of building permits pulled in the first quarter, that is no longer the case.
Affecting the housing market, of course, is the large number of foreclosures (see my post of May 16). This is a major factor driving down home prices.
For more information, see also:
http://www.nwanews.com/adg/Business/260081
According to Phillips, to date there have been $1.4 trillion in losses at global financial firms. The current estimate is that such losses will go to $3.4 trillion before the recession ends. Consumer confidence is still declining nationally, and as people save more, that’s actually bad for the economy, since they aren’t spending money. On a positive note, however, consumer debt and bank lending corrections are decreasing, but unemployment rates are still high and are expected to go higher.
In response to a question from the audience, Phillips noted that for people who have lost a lot of money in the stock market, the estimate is that it will take anywhere from 3.5 to 8 years to recoup those losses. He indicated that the lowest the stock market fell was on March 9 of this year and has been rising slowly since then. Normally, he said, stock prices bottom out before earnings.
He also indicated that although the economy remains in recession, credit conditions are slowly improving. It’s a good time to purchase stocks while they are still “slightly cheap.”
For the housing market segment, Kathy Deck began where she usually does, with employment numbers, since positive job growth is what normally attracts people to NW Arkansas. Those people, in turn, purchase homes and generally determine the condition of the real estate market, including residential, multifamily and commercial sales and rentals.
Whereas in the past, NW Arkansas seemed to be immune from the type of job loss that was occurring in other parts of the country, the first quarter of this year saw the destruction of about 1300 jobs here, a decline of approximately 1% in non-farm employment. The only sectors in which there was positive job growth were Education and Health, Professional and Business Services, and in the Leisure and Hospitality sector. All other types of employment experienced job loss. Government remained steady.
The commercial sector in NW Arkansas saw very little in the way of building permits in the first quarter, and the amount of available square footage rose in Fayetteville and Springdale, as well as in NW Arkansas as a whole.
For multifamily, the vacancy rates have risen. In Fayetteville this is because of new spaces being added, in the form of new apartment complexes being built. For Springdale, it is because of population movement away from the city.
In the residential sector, the number of building permits issued for Fayetteville is the lowest it has been for many years, less than 50 for the whole first quarter, compared to over 200 during each of the peak 2nd and 3rd quarters of 2005. For Springdale only about 25 residential building permits were issued during Q1, and in West Washington County (which includes communities such as West Fork, Prairie Grove, Lincoln, etc.) new building permits were essentially at zero for the quarter. Nevertheless, the value of the average building permit in NW Arkansas has been rising in Washington County to approximately $190,000.
Needless to say, the number of houses under construction in active subdivisions has also declined, as has the absorption rate. The number of available lots in active subdivisions also showed a small decline compared with Q1 of last year, a positive step. Also showing declines were the number of homes sold in Washington County during Q1 and the average price per house sold.
Unlike in the past, according to Deck, declines in absorption are now because people are not purchasing enough homes. In the past it was because of over-building. Because of the low number of building permits pulled in the first quarter, that is no longer the case.
Affecting the housing market, of course, is the large number of foreclosures (see my post of May 16). This is a major factor driving down home prices.
For more information, see also:
http://www.nwanews.com/adg/Business/260081
Saturday, May 16, 2009
A Few Observations about the NW Arkansas Housing Market
While some local economists are seeing a bright spot here and there, the rate of foreclosures in Arkansas continues to rise, and the real estate market in NW Arkansas still has a long way to go to get out of the hole it is in. According to Kathy Deck, director of the U of A Center for Business and Economic Research, in Benton County there are now 1500 bank-owned properties, up from 747 six months ago. In Washington County, the situation is not quite as bad with 548 bank-owned properties, up from 475 six months ago.
In April alone, there were 504 new foreclosures in Benton County according to RealtyTrac and 357 new foreclosures in Washington County. These are not the numbers anyone wanted to see. Nationally, one in every 440 U.S. homes received a foreclosure filing in February.
It could be worse. Nevada had the country's worst foreclosure rate in February: one in every 70 housing units, which is an astounding 156% increase from February 2008. Arizona's rate was second, one foreclosure for every 147 houses.
I don’t believe anyone ever expected to see such misery in the housing market!
On the other hand, there are some tremendous opportunities for buyers now. I believe there are some outstanding bargains these days whether for first-time home buyers or investors. The average price-per-square foot of homes sold so far in 2009 was $77, down 4.9% from January and 8.3% lower than a year ago. In some cases, homes are being sold at 20%-40% below their original asking price, which is not surprising given the fact that the majority of homes sold these days are distressed sales or foreclosures.
The question everyone asks me is: has the market bottomed out and started a slow climb up? My perception is that the answer is not yet, but we may be getting close.
Spring is here and more buyers are appearing. Sales throughout the country actually increased 5.1% in February. In April in Fayetteville, more homes were sold this year than last year, 85 this April compared to 75 last April.
The new federal tax credit of up to $8,000 is a windfall for qualified first-time homebuyers. Interest rates are at their lowest ever – under 5% APR for a 30-year fixed mortgage. And the feds are taking unprecedented steps to get the credit system working again.
It’s definitely a buyer’s market and the selection of homes in outstanding.
I always wanted to buy into the stock market when prices hit bottom and sell when it was at the top. I never managed to do that and neither has anyone I know.
It’s the same with buying a home – the biggest investment most folks will ever make. It’s a long-term investment that you can live in while weathering the ups and downs of the market. We may not be at the very bottom but I think we’re close!
For more information:
http://www.nwanews.com:80/adg/Business/254750/
http://www.nwaonline.net/articles/2009/03/16/business/031709bushomesales.txt
http://www.nwarktimes.com/adg/National/255611
http://www.amerisave.com/?source=2540&gclid=COzDt97Ew5kCFR7yDAodTEffvA
http://www.realtytrac.com/states/Arkansas.html
http://realtytimes.com/rtmcrcond5/Arkansas~Fayetteville~judyluna
http://realtytimes.com/rtmcrloc/Arkansas~Springdale
In April alone, there were 504 new foreclosures in Benton County according to RealtyTrac and 357 new foreclosures in Washington County. These are not the numbers anyone wanted to see. Nationally, one in every 440 U.S. homes received a foreclosure filing in February.
It could be worse. Nevada had the country's worst foreclosure rate in February: one in every 70 housing units, which is an astounding 156% increase from February 2008. Arizona's rate was second, one foreclosure for every 147 houses.
I don’t believe anyone ever expected to see such misery in the housing market!
On the other hand, there are some tremendous opportunities for buyers now. I believe there are some outstanding bargains these days whether for first-time home buyers or investors. The average price-per-square foot of homes sold so far in 2009 was $77, down 4.9% from January and 8.3% lower than a year ago. In some cases, homes are being sold at 20%-40% below their original asking price, which is not surprising given the fact that the majority of homes sold these days are distressed sales or foreclosures.
The question everyone asks me is: has the market bottomed out and started a slow climb up? My perception is that the answer is not yet, but we may be getting close.
Spring is here and more buyers are appearing. Sales throughout the country actually increased 5.1% in February. In April in Fayetteville, more homes were sold this year than last year, 85 this April compared to 75 last April.
The new federal tax credit of up to $8,000 is a windfall for qualified first-time homebuyers. Interest rates are at their lowest ever – under 5% APR for a 30-year fixed mortgage. And the feds are taking unprecedented steps to get the credit system working again.
It’s definitely a buyer’s market and the selection of homes in outstanding.
I always wanted to buy into the stock market when prices hit bottom and sell when it was at the top. I never managed to do that and neither has anyone I know.
It’s the same with buying a home – the biggest investment most folks will ever make. It’s a long-term investment that you can live in while weathering the ups and downs of the market. We may not be at the very bottom but I think we’re close!
For more information:
http://www.nwanews.com:80/adg/Business/254750/
http://www.nwaonline.net/articles/2009/03/16/business/031709bushomesales.txt
http://www.nwarktimes.com/adg/National/255611
http://www.amerisave.com/?source=2540&gclid=COzDt97Ew5kCFR7yDAodTEffvA
http://www.realtytrac.com/states/Arkansas.html
http://realtytimes.com/rtmcrcond5/Arkansas~Fayetteville~judyluna
http://realtytimes.com/rtmcrloc/Arkansas~Springdale
Do Your Kids Want to Play Basketball? Fayetteville is the Winning Place!
I’m a little late with this post, but we had an extraordinary event happen last month. There was a lot of celebratory noise coming from Fayetteville -- because of the high school basketball champions – two of them!
That’s right, both the Fayetteville High School boys and girls basketball teams became the new state champions. And not only that, they each went undefeated for the entire season.
The Lady Bulldogs team went 32-0 for the season and won the class 7-A Arkansas State Championship title by a 72-61 win over North Little Rock. (7A is the highest classification.)
Just a short two hours later, the Bulldogs (boys) capped their 30-0 season by a 40-34 victory over Rogers to win their 7A Championship title.
It’s not the first time a high school has won both boys and girls titles in the same season but for both teams to go undefeated and cap it off with the title of champion is almost unheard of. It is a first in Arkansas and may even be the first in the country.
I just want to say Congratulations (even if a little late)! Way to go!
For more information:
http://www.nwarktimes.com/adg/Sports/254985/print/
http://www.nwaonline.net/articles/2009/03/16/opinion/031709editorial.txt
That’s right, both the Fayetteville High School boys and girls basketball teams became the new state champions. And not only that, they each went undefeated for the entire season.
The Lady Bulldogs team went 32-0 for the season and won the class 7-A Arkansas State Championship title by a 72-61 win over North Little Rock. (7A is the highest classification.)
Just a short two hours later, the Bulldogs (boys) capped their 30-0 season by a 40-34 victory over Rogers to win their 7A Championship title.
It’s not the first time a high school has won both boys and girls titles in the same season but for both teams to go undefeated and cap it off with the title of champion is almost unheard of. It is a first in Arkansas and may even be the first in the country.
I just want to say Congratulations (even if a little late)! Way to go!
For more information:
http://www.nwarktimes.com/adg/Sports/254985/print/
http://www.nwaonline.net/articles/2009/03/16/opinion/031709editorial.txt
Sunday, May 03, 2009
NW Arkansas Positions Itself as a Leader in the Sustainability Movement
It wasn’t too many years ago that NW Arkansas was known as a rural farming area, if it was known at all. But Sam Walton had a small store in Bentonville – and you know the rest of the story.
As Wal-Mart grew by leaps and bounds, so did NW Arkansas. Wal-Mart’s major vendors started opening branches here and they and their families needed housing, schools, banking, hospitals, shopping centers, highways, sewer systems, and on and on.
The burgeoning population created the housing and construction boom which, of course, brought more families with more needs.
But the economic downturn around the country and the world caused folks in NW Arkansas to wonder if this growth could continue.
The answer may well be yes! Sustainability-based research and development has the potential to drive Northwest Arkansas for years to come and action is already underway to position itself as “Green Valley.” (Think California’s Silicon Valley 40 years ago.)
Fayetteville in particular has been a leader for living green. The city has had a recycling program for several years, recently won the Arbor Day Foundation’s award as “Tree City USA” for the 14th consecutive year, and frequently wins the Garden City award for cities of its size.
Those recognitions may be small compared to the overall sustainability movement, but it bodes well for the mindset of residents and local governments.
The University of Arkansas-Fayetteville has an Applied Sustainability Center already up and running.
Forbes Magazine ranked NW Arkansas as #4 in the entire country on their new list of Top 25 Best Places for Business and Careers.
Some companies that specialize in such things as ways to improve fuel efficiency, maximize resources, minimize environmental footprints, reduce greenhouse gases, and the world's dependence on fossil fuel have moved here to take advantage of both the favorable business climate and the sustainability movement.
A few companies from Sweden, long recognized as a leader in sustainability technology, have set up U.S. headquarters here. Several other Swedish firms are in the process of doing the same and still more are seriously investigating the possibility.
Perhaps we have to give another nod to Wal-Mart for taking the position 3 years ago to reduce waste to zero and make sustainability a priority. It takes time to achieve a goal that mammoth but the fact that they’re working on it has garnered attention around the world.
Wal-Mart has more than 1,300 locally based suppliers who answered the call to develop new packaging, logistics and other practices that are now spreading throughout the industry.
Even The Washington Post and Wall Street Journal have recognized and published articles about what’s taking root in NW Arkansas.
The potential for NW Arkansas as a major player in the sustainability (green) movement is here and it’s very exciting!
For more information:
http://nwanews.com:80/bcdr/News/71577/
http://www.nwarktimes.com/adg/Business/252507
http://www.nwarktimes.com/adg/Business/240533
http://www.nwarktimes.com/nwat/News/75202/
As Wal-Mart grew by leaps and bounds, so did NW Arkansas. Wal-Mart’s major vendors started opening branches here and they and their families needed housing, schools, banking, hospitals, shopping centers, highways, sewer systems, and on and on.
The burgeoning population created the housing and construction boom which, of course, brought more families with more needs.
But the economic downturn around the country and the world caused folks in NW Arkansas to wonder if this growth could continue.
The answer may well be yes! Sustainability-based research and development has the potential to drive Northwest Arkansas for years to come and action is already underway to position itself as “Green Valley.” (Think California’s Silicon Valley 40 years ago.)
Fayetteville in particular has been a leader for living green. The city has had a recycling program for several years, recently won the Arbor Day Foundation’s award as “Tree City USA” for the 14th consecutive year, and frequently wins the Garden City award for cities of its size.
Those recognitions may be small compared to the overall sustainability movement, but it bodes well for the mindset of residents and local governments.
The University of Arkansas-Fayetteville has an Applied Sustainability Center already up and running.
Forbes Magazine ranked NW Arkansas as #4 in the entire country on their new list of Top 25 Best Places for Business and Careers.
Some companies that specialize in such things as ways to improve fuel efficiency, maximize resources, minimize environmental footprints, reduce greenhouse gases, and the world's dependence on fossil fuel have moved here to take advantage of both the favorable business climate and the sustainability movement.
A few companies from Sweden, long recognized as a leader in sustainability technology, have set up U.S. headquarters here. Several other Swedish firms are in the process of doing the same and still more are seriously investigating the possibility.
Perhaps we have to give another nod to Wal-Mart for taking the position 3 years ago to reduce waste to zero and make sustainability a priority. It takes time to achieve a goal that mammoth but the fact that they’re working on it has garnered attention around the world.
Wal-Mart has more than 1,300 locally based suppliers who answered the call to develop new packaging, logistics and other practices that are now spreading throughout the industry.
Even The Washington Post and Wall Street Journal have recognized and published articles about what’s taking root in NW Arkansas.
The potential for NW Arkansas as a major player in the sustainability (green) movement is here and it’s very exciting!
For more information:
http://nwanews.com:80/bcdr/News/71577/
http://www.nwarktimes.com/adg/Business/252507
http://www.nwarktimes.com/adg/Business/240533
http://www.nwarktimes.com/nwat/News/75202/
Sunday, April 19, 2009
The Internet – Ya Gotta Love It!
I recently came across an interesting article that discussed who uses the Internet and what they do with it.
The survey broke usage down into several age brackets. In my group (older baby boomer) only 70% of those surveyed used the Internet for anything. I use the Net so much it’s hard to visualize what the other 30% who don’t use it at all do for correspondence, news, shopping, banking and business!
Technology is an essential part of my business. I have multiple websites where buyers can access all of the NW Arkansas MLS listings plus lots of information about buying a home. I also provide many useful links to all kinds of information about NW Arkansas.
I was one of the first few agents in NW Arkansas to provide a website to search for homes. I am among an elite group of about 200 agents nationally who have been invited to join the Allen Hainge Cyberstars, and I was an early recipient of the e-Pro certification.
Ultimately the Internet has totally changed the way I do business and the way people look for homes. There used to be fear among real estate agents that the Internet would replace agents - that people wouldn't need us any more. But that is not the case; in fact, people who want to buy or sell a home need agents more than ever.
The Internet has tons of information, but the key is to be able to INTERPET that information. A good agent (for the buyer or seller) can provide key market data and help their clients maximize what they can learn for themselves from the Internet.
For sellers, a techy agent can provide the maximum exposure of their property to the 90% of buyers who now search for their home on line.
For buyers, a techy agent can provide additional information on potential properties they may want to see. And techy buyers are way ahead of the others. They go online to research potential homes and rule out the obviously unsuitable ones. Ultimately, buyers and I save lots of time, not to mention gasoline!
The Internet also provides the means for me to quickly send listings and photos by email, as well as documents for signatures.
If I can help you buy or sell, please let me know. It’s what I do, and I particularly enjoy helping first-time homebuyers fulfill their dreams.
If you would like to see how your usage compares to others in your age group, go to:
http://www.usatoday.com/tech/webguide/internetlife/2009-01-28-online-generations_N.htm
The survey broke usage down into several age brackets. In my group (older baby boomer) only 70% of those surveyed used the Internet for anything. I use the Net so much it’s hard to visualize what the other 30% who don’t use it at all do for correspondence, news, shopping, banking and business!
Technology is an essential part of my business. I have multiple websites where buyers can access all of the NW Arkansas MLS listings plus lots of information about buying a home. I also provide many useful links to all kinds of information about NW Arkansas.
I was one of the first few agents in NW Arkansas to provide a website to search for homes. I am among an elite group of about 200 agents nationally who have been invited to join the Allen Hainge Cyberstars, and I was an early recipient of the e-Pro certification.
Ultimately the Internet has totally changed the way I do business and the way people look for homes. There used to be fear among real estate agents that the Internet would replace agents - that people wouldn't need us any more. But that is not the case; in fact, people who want to buy or sell a home need agents more than ever.
The Internet has tons of information, but the key is to be able to INTERPET that information. A good agent (for the buyer or seller) can provide key market data and help their clients maximize what they can learn for themselves from the Internet.
For sellers, a techy agent can provide the maximum exposure of their property to the 90% of buyers who now search for their home on line.
For buyers, a techy agent can provide additional information on potential properties they may want to see. And techy buyers are way ahead of the others. They go online to research potential homes and rule out the obviously unsuitable ones. Ultimately, buyers and I save lots of time, not to mention gasoline!
The Internet also provides the means for me to quickly send listings and photos by email, as well as documents for signatures.
If I can help you buy or sell, please let me know. It’s what I do, and I particularly enjoy helping first-time homebuyers fulfill their dreams.
If you would like to see how your usage compares to others in your age group, go to:
http://www.usatoday.com/tech/webguide/internetlife/2009-01-28-online-generations_N.htm
Tuesday, March 10, 2009
The Mortgage Melt-down explained
I just discovered a wonderful video on You Tube which explains the mortgage melt-down in terms that everyone can understand. It's very clear, and there's also part 2 to continue the explanation.
Click below to see part 1.
http://www.youtube.com/watch?v=Q0zEXdDO5JU
It applies to the current situation in NW Arkansas Real Estate in that in this area we are victim to what happened in the mortgage meltdown. In addition, there were some contributing factors.
For example, back a number of years ago, the stock market tanked. Local people (who maybe lost money in the stock market) started looking at real estate investment rather than the stock market. A piece of land or a house is a tangible entity after all. They invested in single-family rentals and other multi-family real estate.
Then in 2004 the Fayetteville-Springdale-Rogers MSA (Metropolitan Statistical Area--i.e. basically NW Arkansas) ranked #1 for the Millkin report on the economy for all of the US, ahead of Las Vegas. All of a sudden the vultures started circling. Investors from all over the country were trying to purchase the same homes that first time home buyers were trying to purchase. Prices skyrocketed on the low end as demand far exceeded supply. Builders were not constructing new homes on the low end, because land prices were too high.
The result was that it became almost impossible to purchase an affordable home in NW Arkansas.
Then the mortgage melt-down happened and the investors from elsewhere disappeared. Inventory in NW Arkansas was high (i.e. lots of homes on the market in all aprice ranges).
Now we have a lot of homes on the market including affordable homes. Prices have declined precipitously. Of course, it all depends on price range.
The bottom line is that now is a terrific time to purchase a home. There are a lot of homes on the market in all price ranges. The low end is showing homes for less than $100K, a phenomenon not seen in many years. Lots of foreclosures, but also lots of good deals.
If you want to purchase a home, give me a call. I can help. I mostly help buyers, but my knowledge of the market also helps sellers.
See my home search website: http://www.NWArkansasHomeSearch.com or my regular informational website at http://www.Judyluna.com
Click below to see part 1.
http://www.youtube.com/watch?v=Q0zEXdDO5JU
It applies to the current situation in NW Arkansas Real Estate in that in this area we are victim to what happened in the mortgage meltdown. In addition, there were some contributing factors.
For example, back a number of years ago, the stock market tanked. Local people (who maybe lost money in the stock market) started looking at real estate investment rather than the stock market. A piece of land or a house is a tangible entity after all. They invested in single-family rentals and other multi-family real estate.
Then in 2004 the Fayetteville-Springdale-Rogers MSA (Metropolitan Statistical Area--i.e. basically NW Arkansas) ranked #1 for the Millkin report on the economy for all of the US, ahead of Las Vegas. All of a sudden the vultures started circling. Investors from all over the country were trying to purchase the same homes that first time home buyers were trying to purchase. Prices skyrocketed on the low end as demand far exceeded supply. Builders were not constructing new homes on the low end, because land prices were too high.
The result was that it became almost impossible to purchase an affordable home in NW Arkansas.
Then the mortgage melt-down happened and the investors from elsewhere disappeared. Inventory in NW Arkansas was high (i.e. lots of homes on the market in all aprice ranges).
Now we have a lot of homes on the market including affordable homes. Prices have declined precipitously. Of course, it all depends on price range.
The bottom line is that now is a terrific time to purchase a home. There are a lot of homes on the market in all price ranges. The low end is showing homes for less than $100K, a phenomenon not seen in many years. Lots of foreclosures, but also lots of good deals.
If you want to purchase a home, give me a call. I can help. I mostly help buyers, but my knowledge of the market also helps sellers.
See my home search website: http://www.NWArkansasHomeSearch.com or my regular informational website at http://www.Judyluna.com
Saturday, March 07, 2009
Benton County Homeowners to Receive a Break on Property Taxes—Yeah!
Benton County will be lowering values on residential properties by 2% - 6%. The percentages vary by area. Northeast Benton County will decrease by 6%, the southwest portion of the county will decrease by 2%, and other areas will be between those two figures.
When homeowners received their property assessments in 2008 there were thousands of unhappy people. By law, those values were based on 2005-2007 sales when prices were rapidly escalating. Thousands of appeals were filed, which resulted in many lowered valuations.
Now that property values have decreased again the county assessor is taking the first steps to lower appraisals.
This is a bit of good news for homeowners who are seeing the value of their homes shrink.
Commercial and industrial property appraisals will remain unchanged.
Note: In Arkansas, counties assess properties every third year. Thus, the next reappraisal was not scheduled until 2011. (For more details about the hows and whys of Arkansas appraisals, see my blog “Benton County Reappraisal Process is Complete” which I posted July 19, 2008.)
For more information:
http://www.nwaonline.net/articles/2009/03/02/news/030309bzequalization.txt
http://www.nwarktimes.com/adg/News/253986/
When homeowners received their property assessments in 2008 there were thousands of unhappy people. By law, those values were based on 2005-2007 sales when prices were rapidly escalating. Thousands of appeals were filed, which resulted in many lowered valuations.
Now that property values have decreased again the county assessor is taking the first steps to lower appraisals.
This is a bit of good news for homeowners who are seeing the value of their homes shrink.
Commercial and industrial property appraisals will remain unchanged.
Note: In Arkansas, counties assess properties every third year. Thus, the next reappraisal was not scheduled until 2011. (For more details about the hows and whys of Arkansas appraisals, see my blog “Benton County Reappraisal Process is Complete” which I posted July 19, 2008.)
For more information:
http://www.nwaonline.net/articles/2009/03/02/news/030309bzequalization.txt
http://www.nwarktimes.com/adg/News/253986/
Sunday, March 01, 2009
$8,000 Income Tax Credit for First-Time Homebuyers--WOW what a deal!
The new economic stimulus bill which was recently signed into law has a tremendous benefit for first-time homebuyers – a credit of up to $8,000! This is phenomenal--basically a gift from the federal government if you buy a home this year before December 1.
The credit is 10% of the cost of the home up to a maximum of $8,000 and does not have to be repaid if the buyer lives in the home for at least three years.
This provision is the difference between night and day compared to the $7,500 tax credit that took effect last year for homes purchased after April 9, 2008. The 2008 credit had to be repaid over 15 years, which essentially meant it was an interest free loan. (See my blog of August 30, 2008, “First-Time Homebuyer Tax Credit Explained.”)
So, I repeat: under most circumstances, the credit does not have to be repaid.
The home must be purchased between January 1, 2009 and November 30, 2009. December 1, 2009 is too late! The date ownership legally passes to the buyer is the qualifying date.
Who is a "first-time home buyer?" People who have not had an ownership interest in a primary residence during the last three years are eligible. Ownership in a vacation home would not be considered a primary residence.
Income qualifications for the full credit are $75,000 or less if single or $150,000 for a married couple. Partial credit is available to singles with incomes between $75,000 - $95,000 or married people whose incomes are between $150,000 - $170,000.
This is a refundable credit taken on the buyer’s federal income tax return for 2010. For example, if you will have already paid your full tax liability through withholding, you would still receive a refund of $8,000. Another example: you owed $5,000 in taxes and your withholding was $6,000. Your refund would total of $9,000. Last example: you owed $5,000 in taxes and your withholding was $4,000. Your refund would be $7,000.
Another extraordinary provision of the new law permits the buyer to elect to treat the purchase as if it occurred December 31, 2008 and take the credit on his 2008 income tax return. Even if the return has already been filed, an amended tax return can be filed to obtain the credit. This is especially useful for buyers whose income qualified them for the credit in 2008 but may have too much income in 2009.
Of course, the situation can be turned around. If the buyer would be better served in taking the credit on his 2009 tax return, he can reduce his withholding or estimated tax payments now instead of waiting until tax time in 2010.
All in all, I believe this may be the impetus needed to get people off the fence and into a home. Interest rates are low, inventory is huge, and $8,000 means a lot to most people. And it is so much better than last years $7,500 credit that, as mentioned above, has to be repaid.
The sad part for first-time buyers who purchased last year is that their $7,500 credit still has to be repaid. There is no provision in the law to forgive that and simply avail oneself of the $8,000 credit that does not have to be repaid. I certainly commiserate with them – but who could have possibly foreseen what this year’s law would provide?
IMPORTANT NOTE: This is my interpretation of the basic provisions of the new credit. I have tried to simplify things to give a picture of how this credit works but I urge you to check with your tax professional or accountant for full provisions of the law.
In any case, if you have not owned a home in the past 3 years and are thinking of purchasing a home as your principal residence, now is the time to do so. There are a lot of homes on the market now in NW Arkansas and some very good deals (especially foreclosures and short sales). As the spring progresses a lot of these good buys will be snapped up.
For more information:
http://www.federalhousingtaxcredit.com/2009/faq.php#5
http://money.cnn.com/2009/02/13/real_estate/homebuyer_tax_credit_finalized/index.htm?postversion=2009021712
The credit is 10% of the cost of the home up to a maximum of $8,000 and does not have to be repaid if the buyer lives in the home for at least three years.
This provision is the difference between night and day compared to the $7,500 tax credit that took effect last year for homes purchased after April 9, 2008. The 2008 credit had to be repaid over 15 years, which essentially meant it was an interest free loan. (See my blog of August 30, 2008, “First-Time Homebuyer Tax Credit Explained.”)
So, I repeat: under most circumstances, the credit does not have to be repaid.
The home must be purchased between January 1, 2009 and November 30, 2009. December 1, 2009 is too late! The date ownership legally passes to the buyer is the qualifying date.
Who is a "first-time home buyer?" People who have not had an ownership interest in a primary residence during the last three years are eligible. Ownership in a vacation home would not be considered a primary residence.
Income qualifications for the full credit are $75,000 or less if single or $150,000 for a married couple. Partial credit is available to singles with incomes between $75,000 - $95,000 or married people whose incomes are between $150,000 - $170,000.
This is a refundable credit taken on the buyer’s federal income tax return for 2010. For example, if you will have already paid your full tax liability through withholding, you would still receive a refund of $8,000. Another example: you owed $5,000 in taxes and your withholding was $6,000. Your refund would total of $9,000. Last example: you owed $5,000 in taxes and your withholding was $4,000. Your refund would be $7,000.
Another extraordinary provision of the new law permits the buyer to elect to treat the purchase as if it occurred December 31, 2008 and take the credit on his 2008 income tax return. Even if the return has already been filed, an amended tax return can be filed to obtain the credit. This is especially useful for buyers whose income qualified them for the credit in 2008 but may have too much income in 2009.
Of course, the situation can be turned around. If the buyer would be better served in taking the credit on his 2009 tax return, he can reduce his withholding or estimated tax payments now instead of waiting until tax time in 2010.
All in all, I believe this may be the impetus needed to get people off the fence and into a home. Interest rates are low, inventory is huge, and $8,000 means a lot to most people. And it is so much better than last years $7,500 credit that, as mentioned above, has to be repaid.
The sad part for first-time buyers who purchased last year is that their $7,500 credit still has to be repaid. There is no provision in the law to forgive that and simply avail oneself of the $8,000 credit that does not have to be repaid. I certainly commiserate with them – but who could have possibly foreseen what this year’s law would provide?
IMPORTANT NOTE: This is my interpretation of the basic provisions of the new credit. I have tried to simplify things to give a picture of how this credit works but I urge you to check with your tax professional or accountant for full provisions of the law.
In any case, if you have not owned a home in the past 3 years and are thinking of purchasing a home as your principal residence, now is the time to do so. There are a lot of homes on the market now in NW Arkansas and some very good deals (especially foreclosures and short sales). As the spring progresses a lot of these good buys will be snapped up.
For more information:
http://www.federalhousingtaxcredit.com/2009/faq.php#5
http://money.cnn.com/2009/02/13/real_estate/homebuyer_tax_credit_finalized/index.htm?postversion=2009021712
Tuesday, February 24, 2009
Some Good News--NW Arkansas Housing Market One of the healthiest in the nation...
This economic roller coaster that we’re all on these days has just taken another turn. Only a few days ago I wrote about Wal-Mart downsizing some 700-800 people at its corporate headquarters and the effect that might have on the overall housing situation in MW Arkansas.
Today we have good news.
Builder Online just named Fayetteville as one of the top 15 healthiest housing markets for builders in the country. In fact, Fayetteville was named #9. In today’s world, that’s quite a statement. And it comes from an independent research firm.
According to their research, the unemployment rate in Fayetteville was only 4.1% in fourth quarter 2008. Another strong factor Builder Online noted was home values dropped only 2.4% in the past year. Many, many cities suffered value declines of 10% and way up from there.
Of course Builder Online isn’t first to recognize good things about our area. Kiplinger, Sperling’s Best Places to Live, and U.S. News and World Report have already beaten them to it. Still, it’s always heartening when “outsiders” recognize what the people who live here already know. NW Arkansas is a great place to live.
The other thing is that all real estate is local. Despite “doom and gloom” in the national media, NW Arkansas is still a good place to live and to invest. There are some phenomenal “deals” out there, but now is the time to invest—low interest rates and most buyers have not hit the streets. Yet…
For more information:
http://www.builderonline.com:80/local-markets/the-healthiest-housing-markets-for-2009.aspx?page=7
Today we have good news.
Builder Online just named Fayetteville as one of the top 15 healthiest housing markets for builders in the country. In fact, Fayetteville was named #9. In today’s world, that’s quite a statement. And it comes from an independent research firm.
According to their research, the unemployment rate in Fayetteville was only 4.1% in fourth quarter 2008. Another strong factor Builder Online noted was home values dropped only 2.4% in the past year. Many, many cities suffered value declines of 10% and way up from there.
Of course Builder Online isn’t first to recognize good things about our area. Kiplinger, Sperling’s Best Places to Live, and U.S. News and World Report have already beaten them to it. Still, it’s always heartening when “outsiders” recognize what the people who live here already know. NW Arkansas is a great place to live.
The other thing is that all real estate is local. Despite “doom and gloom” in the national media, NW Arkansas is still a good place to live and to invest. There are some phenomenal “deals” out there, but now is the time to invest—low interest rates and most buyers have not hit the streets. Yet…
For more information:
http://www.builderonline.com:80/local-markets/the-healthiest-housing-markets-for-2009.aspx?page=7
Sunday, February 15, 2009
Scary
I just read a newspaper article about global warming that is positively scary. I've been watching how the North Polar icecap is decreasing and polar bears are having problems. This article appears to provide some reasons.
This has absolutely nothing to do with Fayetteville or Northwest Arkansas Real Estate, but this is a blog after all, and this article appeared to merit passing along.
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/14/AR2009021401757.html?nav=hcmodule
This has absolutely nothing to do with Fayetteville or Northwest Arkansas Real Estate, but this is a blog after all, and this article appeared to merit passing along.
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/14/AR2009021401757.html?nav=hcmodule
Thursday, February 12, 2009
I Guess NW Arkansas Isn’t Bulletproof After All…
By now everyone has heard about Walmart cutting 700 to 800 jobs at the home office in a restructuring move. This has come as a big surprise to a lot of people including me, and I’m worried about a “chilling” effect that this could have on the local economy.
As the national media proclaim doom and gloom stories about job losses, increased unemployment rates, and yet more economic stimulus measures, we thought we weren’t as bad off as other parts of the country. Walmart and other large corporate employers in NW Arkansas have provided job growth here—smaller than in past years, but at least positive growth.
The other thing is that a discount store like Walmart usually does better when times are tough as they are now. Thus we thought this would keep our area “safe” from what’s happening elsewhere. So to have even Walmart cut 5% of their positions here is significant, and could affect the already suffering housing market.
The perceptions that the economy here isn’t as robust as people thought and that there may not be as many jobs available, may prevent new people from moving here and purchasing homes. On the other hand, some of those 700 people may have difficulty finding new jobs here and selling their homes to move elsewhere. Thus the chilling effect is magnified as the number of months of housing inventory increases at a time when sales are down compared to previous years.
For me as a Realtor® I’m disappointed. Yes, Walmart may be fiscally responsible to its shareholders, but when someone you know is one of those 700 people the negative effect is felt even more sharply. I just found out that a client of mine, a nice young man to whom I have sold a home and who was going to get married in a few months, was one of those laid off. He is, of course, devastated, and trying to take stock of his situation.
Ultimately the effect of these job cuts probably can’t be measured. But the actual as well as psychological chill this has caused locally goes beyond news reports on the situation. Only time will get us out of this economic mess.
For more information:
http://www.nwanews.com/adg/News/252028/
http://www.nwanews.com/adg/Business/252088/
http://nwanews.com/bcdr/News/70632/
http://www.nwaonline.net/articles/2009/02/11/news/021109azwalmartlayoffs.txt
As the national media proclaim doom and gloom stories about job losses, increased unemployment rates, and yet more economic stimulus measures, we thought we weren’t as bad off as other parts of the country. Walmart and other large corporate employers in NW Arkansas have provided job growth here—smaller than in past years, but at least positive growth.
The other thing is that a discount store like Walmart usually does better when times are tough as they are now. Thus we thought this would keep our area “safe” from what’s happening elsewhere. So to have even Walmart cut 5% of their positions here is significant, and could affect the already suffering housing market.
The perceptions that the economy here isn’t as robust as people thought and that there may not be as many jobs available, may prevent new people from moving here and purchasing homes. On the other hand, some of those 700 people may have difficulty finding new jobs here and selling their homes to move elsewhere. Thus the chilling effect is magnified as the number of months of housing inventory increases at a time when sales are down compared to previous years.
For me as a Realtor® I’m disappointed. Yes, Walmart may be fiscally responsible to its shareholders, but when someone you know is one of those 700 people the negative effect is felt even more sharply. I just found out that a client of mine, a nice young man to whom I have sold a home and who was going to get married in a few months, was one of those laid off. He is, of course, devastated, and trying to take stock of his situation.
Ultimately the effect of these job cuts probably can’t be measured. But the actual as well as psychological chill this has caused locally goes beyond news reports on the situation. Only time will get us out of this economic mess.
For more information:
http://www.nwanews.com/adg/News/252028/
http://www.nwanews.com/adg/Business/252088/
http://nwanews.com/bcdr/News/70632/
http://www.nwaonline.net/articles/2009/02/11/news/021109azwalmartlayoffs.txt
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