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According to a recent report from the National Association of Realtors®, existing home sales in June in the US are down by 2.6% compared to May and down 15.5% compared to June of last year. For all home sales, single-family home sales declined 3.2% to a seasonally adjusted annual rate of 4.27 million in June from 4.41 million in May, and are 14.8% below the 5.01 million-unit pace in June 2007.
Total inventory in June was up by 0.2%, which represents an 11.1-month supply at the current sales pace, up from a 10.8-month supply in May. The median price for June was $215,100 in June, down 6.1% from a year ago when the median was $229,000.
So how does NW Arkansas compare to statistics for the country? It’s different for each town, and also differs according to price range. Following are some statistics for the area with global numbers for each town (doesn’t take into account price range).
No. of Sales Median Price Av. DOM Supply (in Mo.)
Bentonville
June 2008
78 $197,950 147 20.18
June 2007
87 $196,000 140 11.70
Fayetteville
June 2008
109 $168,500 140 14.96
June 2007
135 $178,500 117 10.97
Rogers
June 2008
84 $166,500 167 18.01
June 2007
125 $178,500 157 13.64
Springdale
June 2008
82 $143,000 140 15.36
June 2007
108 $139,900 128 11.58
Bella Vista
June 2008
83 $155,000 150 13.15
June 2007
108 $162,450 135 10.72
So what do these numbers mean? In terms of months supply of homes, all of the NW Arkansas towns are above the national average, with Rogers and Bentonville significantly so. In fact, the Bentonville supply of homes on the market is almost double what is was last year.
In all cases, the Days on Market (DOM) is higher than it was last year, which means that homes are taking longer to sell. In all of the NW Arkansas towns the number of homes sold in June of this year is down, compared to June of last year. However, unlike the national statistics, more homes were sold in June of this year in all NW Arkansas towns than in May (statistics not reproduced here).
The median price for homes in all of the NW Arkansas towns is much lower than the national average. This means that NW Arkansas is still a very affordable place to live. Springdale and Bella Vista are the most affordable with a significant supply of homes in price ranges within reach of “average” folks. However, the median price range of homes in Springdale and Bentonville in June of this year is higher than that of June of 2007.
I should mention that median price is not necessarily the best indicator of whether prices are coming down or not. However, that is the best statistic we Realtors® have to work with. The median price is that price at which half of the homes sold are more expensive than the median price and half are less expensive.
From practical experience, I am finding that many offers are coming in at substantially lower prices than the list price. Buyers seem to think that all sellers are desperate, which is not necessarily the case. In addition, buyers are asking for more in the way of amenities (i.e. throw in blinds, fences, etc.) on new homes, and on re-sale homes they are asking for closing cost help and down payment assistance.
On the other hand, there are also many bank-owned homes (foreclosures) on the market. This has brought prices down, when considered from a statistical point of view. These homes are competing with “normal” homes for sale and making it difficult for the latter to sell at prices that they would usually bring.
For those who are worried about the so-called "declining" value of their home, the thing to remember is that a home purchase is traditionally a long-term investment. Real estate is cyclical, and what comes down will eventually go up. For folks who will be in their homes over a longer period of time, not to worry. These numbers will change and the market will improve. For sellers that don't have to sell right now, my recommendation is not to put your home on the market; wait a year or two.
Bottom line is that there are a lot of homes on the market now in NW Arkansas. In “realtor-speak” we have a “large inventory.” What this means for sellers who must sell now is that they must price their homes competitively for them even to be looked at, let alone sold. For buyers, it is a golden opportunity—lots to choose from at lower prices. Now is the time to buy, especially since interest rates are still low.
For more information:
http://rismedia.com/wp/2008-07-24/existing-home-sales-down-in-june/
http://www.realtor.org/research/research/ehsdata
http://www.realtor.org/press_room/news_releases/2008/ehs_down_in_june
Monday, July 28, 2008
Saturday, July 19, 2008
Benton County Reappraisal Process is Complete
I no sooner posted the article (see blog posted July 12) than Benton County completed its appraisal process for property taxes.
Values are up – way up in some cases – and people are not happy. The total value of property in Benton County’ increased from $2.9 billion in 2005 to more than $4 billion this year. That includes increases in value of existing properties as well as new construction.
What many folks haven’t taken in to consideration is the fact that the last reappraisal was in 2005 and values have certainly risen since then, although not at the double-digit rates of the past several years. Instead, they seem to be looking only at the past year or so when values started coming down from their all-time high.
There is so much bad news these days it’s easy to get caught up in the doom and gloom. However, NW Arkansas is still growing and adding jobs, though not as rapidly as in the past.
As I’ve said before, real estate is local. You can’t look at California (or Florida or Nevada), for instance, and assume the same thing is happening here.
Arkansas law does provide important benefits to homeowners.
The increase in assessed value on a person’s homestead is capped at 5% per year. Thus, if the assessed valuation of the owner’s personal residence increased 9% over 2005 value, the 2009 value would be capped at 5%. It would be 2010 before the remaining 4% took effect.
Another advantage helps homeowners age 65 or older and those considered disabled as defined by Social Security Administration. It prevents the taxable assessment on an owner’s personal residence from ever increasing due to a reappraisal. Taxes can go up if improvements are made to the property or if millage rates go up, but not because of periodic increase in value.
In other words, all you have to do is notify the county assessor once you reach age 65 or become disabled and your taxable assessed valuation will be frozen forever (at least as long as you live in the same house).
(I’ve included below links to the application forms for both Benton and Washington counties.)
The new assessments will take effect January 1, 2009 with taxes due October 10, 2009.
Taxpayers can appeal the new valuation to the Benton County Equalization Board. You must make an appointment before August 20.
For more information:
Benton County Assessor’s office: 479-271-1037
http://www.nwanews.com:80/adg/News/231396/
http://www.co.benton.ar.us/Assessor/HomesteadApp.pdf
http://www.co.washington.ar.us/Assessor/Am79.htm
Values are up – way up in some cases – and people are not happy. The total value of property in Benton County’ increased from $2.9 billion in 2005 to more than $4 billion this year. That includes increases in value of existing properties as well as new construction.
What many folks haven’t taken in to consideration is the fact that the last reappraisal was in 2005 and values have certainly risen since then, although not at the double-digit rates of the past several years. Instead, they seem to be looking only at the past year or so when values started coming down from their all-time high.
There is so much bad news these days it’s easy to get caught up in the doom and gloom. However, NW Arkansas is still growing and adding jobs, though not as rapidly as in the past.
As I’ve said before, real estate is local. You can’t look at California (or Florida or Nevada), for instance, and assume the same thing is happening here.
Arkansas law does provide important benefits to homeowners.
The increase in assessed value on a person’s homestead is capped at 5% per year. Thus, if the assessed valuation of the owner’s personal residence increased 9% over 2005 value, the 2009 value would be capped at 5%. It would be 2010 before the remaining 4% took effect.
Another advantage helps homeowners age 65 or older and those considered disabled as defined by Social Security Administration. It prevents the taxable assessment on an owner’s personal residence from ever increasing due to a reappraisal. Taxes can go up if improvements are made to the property or if millage rates go up, but not because of periodic increase in value.
In other words, all you have to do is notify the county assessor once you reach age 65 or become disabled and your taxable assessed valuation will be frozen forever (at least as long as you live in the same house).
(I’ve included below links to the application forms for both Benton and Washington counties.)
The new assessments will take effect January 1, 2009 with taxes due October 10, 2009.
Taxpayers can appeal the new valuation to the Benton County Equalization Board. You must make an appointment before August 20.
For more information:
Benton County Assessor’s office: 479-271-1037
http://www.nwanews.com:80/adg/News/231396/
http://www.co.benton.ar.us/Assessor/HomesteadApp.pdf
http://www.co.washington.ar.us/Assessor/Am79.htm
Saturday, July 12, 2008
Is Your Home Over-Appraised?
By law in Arkansas, each county must appraise all real estate every three years. When values are increasing, as they have been in NW Arkansas for many years, that timetable actually gives a break to property owners. A home appraised at $125,000 in 2004 stayed at that appraised value in years 2005 and 2006 even as the actual value increased to $150,000 or more.
Washington County completed its reappraisals in 2007, which in retrospect appears to be when property values hit the top.
Since then, some properties have actually lost value. I know because my old home, which I just sold in May, was appraised by the county for tax purposes at $195,000. I had it listed in the MLS for $179,900. It sold for slightly less.
Speculators have gone elsewhere looking for the next boom and left behind empty homes and empty lots. Builders desperate to get out from under their construction loans are pricing homes on the lower end of any price ranges of recently sold similar homes.
With the next appraisal in Washington County not set to occur until 2010, the county assessor has taken the unusual step of asking and receiving permission of the county’s Equalization Board to examine the situation.
There are more than 90,000 properties in the county and not all properties will be reexamined.
The target will most likely be subdivisions with homes costing more than $200,000. The plan is to compare homes sold in those subdivisions with the appraised value assigned in the same neighborhood on Jan. 1, 2007.
For example, if a home appraised at $200,000 actually sold for $190,000 and that pattern is repeated on several homes in the neighborhood, the appraised value would drop $10,000. A reduction of that amount would decrease property taxes by roughly $100. (Annual property taxes are about 1 percent of a home’s value.)
In my opinion, this is the fair thing to do and I commend Washington County for taking the high road. Things would probably work themselves out at the next scheduled reappraisals in 2010, but meanwhile some people would be paying more than their fair share of taxes.
Incidentally, properties in Benton County are currently undergoing their scheduled reappraisals, which will set property values beginning Jan. 1, 2009. We would expect those values to be indicative of current values.
For more information:
http://www.nwanews.com:80/adg/News/230807/
http://www.nwaonline.net/articles/2008/07/10/columns/brenda_blagg/071108blagg.txt
Washington County completed its reappraisals in 2007, which in retrospect appears to be when property values hit the top.
Since then, some properties have actually lost value. I know because my old home, which I just sold in May, was appraised by the county for tax purposes at $195,000. I had it listed in the MLS for $179,900. It sold for slightly less.
Speculators have gone elsewhere looking for the next boom and left behind empty homes and empty lots. Builders desperate to get out from under their construction loans are pricing homes on the lower end of any price ranges of recently sold similar homes.
With the next appraisal in Washington County not set to occur until 2010, the county assessor has taken the unusual step of asking and receiving permission of the county’s Equalization Board to examine the situation.
There are more than 90,000 properties in the county and not all properties will be reexamined.
The target will most likely be subdivisions with homes costing more than $200,000. The plan is to compare homes sold in those subdivisions with the appraised value assigned in the same neighborhood on Jan. 1, 2007.
For example, if a home appraised at $200,000 actually sold for $190,000 and that pattern is repeated on several homes in the neighborhood, the appraised value would drop $10,000. A reduction of that amount would decrease property taxes by roughly $100. (Annual property taxes are about 1 percent of a home’s value.)
In my opinion, this is the fair thing to do and I commend Washington County for taking the high road. Things would probably work themselves out at the next scheduled reappraisals in 2010, but meanwhile some people would be paying more than their fair share of taxes.
Incidentally, properties in Benton County are currently undergoing their scheduled reappraisals, which will set property values beginning Jan. 1, 2009. We would expect those values to be indicative of current values.
For more information:
http://www.nwanews.com:80/adg/News/230807/
http://www.nwaonline.net/articles/2008/07/10/columns/brenda_blagg/071108blagg.txt
Friday, July 04, 2008
Fayetteville School Board Receives $60 million Option for High School Campus
As I mentioned in my blog June 8, Fayetteville School Board offered to sell its 40-acre high school campus to University of Arkansas for $59 million. U of A officials responded with a counter offer of $50 million. The school board took no further action, deciding more time was needed to consider terms of U of A’s offer.
Now a limited liability corporation has come forward with a request for a 90-day option on the property. The usual reason for an option is to allow time to evaluate the property and consider conditions of sale.
If the board accepts the option, it could not sell the property to anyone else during that time. The corporation would have the exclusive right to buy the property for $60 million, a $10 million increase over U of A’s offer.
However, the corporation would not be obligated to go through with the purchase.
As of this writing, the school board has not taken any action on the latest offer, citing a need for more information.
U of A was caught offguard by the corporation’s request. It will be interesting to see how the university responds in light of the fact that its offer was already $9 million short of the asking price.
So now another opportunity of sorts is on the table. $60 million over $50 million means $10 million taxpayers would not have to come up with to build a new high school – if everything falls into place and the corporation does indeed buy the campus. At this point, that’s a big IF.
Do I hear $70 million? Anyone?
For more information:
http://www.nwaonline.net/articles/2008/06/26/news/062708fzfayschoolbrd.txt
http://www.nwarktimes.com/nwat/News/66578/
Now a limited liability corporation has come forward with a request for a 90-day option on the property. The usual reason for an option is to allow time to evaluate the property and consider conditions of sale.
If the board accepts the option, it could not sell the property to anyone else during that time. The corporation would have the exclusive right to buy the property for $60 million, a $10 million increase over U of A’s offer.
However, the corporation would not be obligated to go through with the purchase.
As of this writing, the school board has not taken any action on the latest offer, citing a need for more information.
U of A was caught offguard by the corporation’s request. It will be interesting to see how the university responds in light of the fact that its offer was already $9 million short of the asking price.
So now another opportunity of sorts is on the table. $60 million over $50 million means $10 million taxpayers would not have to come up with to build a new high school – if everything falls into place and the corporation does indeed buy the campus. At this point, that’s a big IF.
Do I hear $70 million? Anyone?
For more information:
http://www.nwaonline.net/articles/2008/06/26/news/062708fzfayschoolbrd.txt
http://www.nwarktimes.com/nwat/News/66578/
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