Fayetteville Arkansas, University of Arkansas--Old Main Overview

Fayetteville Arkansas, University of Arkansas--Old Main Overview
Overview of Fayetteville, AR

Tuesday, October 16, 2007

NW Arkansas Real Estate Market Looking Up

The market in NW Arkansas is at or very near the bottom according to a local expert. And it’s a good thing—the recent doom and gloom in the media seems to be a self-fulfilling prophecy, especially with regard to NW Arkansas, where conditions are really not that bad when compared to other parts of the nation.

Here’s a brief summary with regard to the residential housing market which I heard at a recent breakfast meeting at the Springdale Holiday Inn, hosted by Jeff Collins and Tom Reed of Streetsmart Data Service of Fayetteville. Collins used to be the head of the Center for Business and Economic Research at the U of A (responsible for the Skyline report) before heading into the private sector to provide economic and other research related to the housing market in NW Arkansas. Streetsmart also analyzes commercial and multi-family real estate conditions.

Consumer confidence on a national level and banker confidence on a local level are two major factors affecting the market. Until recently, an aggressive lending environment existed where almost any developer could get a loan for a new project. Now that bankers have suffered some major losses, almost no one is being approved. We have gone from one extreme to another and in order to create a healthy market, a viable middle ground must be found.

One of the bright spots in the NW Arkansas market is that almost 7,000 new jobs have been created every year since 2003 and data indicates that trend will continue for at least the next five years. Obviously, new jobs bring new residents to the area and that helps fuel the demand for residential housing.

Sales of new homes in both Washington and Benton Counties during the second quarter of this year increased over second quarter 2006 new-home sales - but sales of existing homes declined from 2006 numbers.

Both counties have seen a significant decline in the number of building permits issued during the first 6 months of 2007 compared to the same period of 2006. It appears developers are acutely aware of market saturation and have decided to postpone building more units until existing homes are sold.

The price point for the majority of lots sold during the second quarter was approximately $40,000 and new home construction is now approximately $100 per square foot.

The decreased number of new single- and multi-family housing permits coupled with declining vacancies in multi-family housing are two major indicators that the market is very close to the bottom.

When you’re down, the only direction is up! It’s still a buyer’s market and many opportunities still exist so you may not want to hold out much longer. It’s actually a great time to buy a home.

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