Fayetteville Arkansas, University of Arkansas--Old Main Overview

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

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!

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