Fayetteville Arkansas, University of Arkansas--Old Main Overview

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

Sunday, December 16, 2007

NW Arkansas Weathering the Mortgage-Crisis Storm

According to an article published in the last few weeks in the Arkansas News Bureau, the mortgage crisis in Arkansas is not as severe as national media would have us believe.

Governor Mike Beebe is quoted as saying, "I've talked to the state bank commissioner about the housing market and have been assured that Arkansas bankers, lenders and consumers have been more responsible than those in some other parts of the country."

Arkansas was ranked 17th nationally in foreclosures in October 2007, which was about the same as a few years ago during the boom according to RealtyTrac, an on-line marketplace for foreclosure properties.

There is some debate as to whether sub-prime lending caused the foreclosures or adjustable rate mortgages resetting at considerably higher rates. But another thing to consider is the number of builders being foreclosed due to overbuilding in our area as opposed to individual homebuyers.

Whatever the answer, the effect of foreclosure sales is downward pricing. For the most part, although prices have decreased due to supply and demand issues (i.e. oversupply of homes) as well as some foreclosures and sales of bank-owned properties, I don’t think we’ve encountered the level of price decreases in NW Arkansas that other parts of the country are experiencing.

The result is that this is probably the optimum time to invest in real estate in NW Arkansas—despite the negative stories in the national media. With prices lower, a huge selection of homes on the market in all price ranges, and low interest rates, I would suggest that buyers get off the fence and start buying before interest rates creep up again and the supply of homes diminishes, resulting in higher prices.

But buyers do need to be careful. There are a lot of overpriced properties out there, as some sellers haven’t gotten used to the current buyer’s market yet. A reputable buyer’s agent will do a market analysis for his buyer to determine a fair market price.

For sellers, it’s important to work intelligently with their agents when an offer does come in. If the seller doesn’t want to accept a particular offer he may lose the sale. In this market a counter offer from the seller may make the buyer select a different property and an opportunity to sell the home quickly may be lost. Buyers hold the winning cards now and there are a lot of homes to choose from.

For more information:

Read my blog posting October 6, 2007 “What’s the Mortgage Crisis All About?”


Saturday, December 01, 2007

No Shortage of Hotel Rooms in NW Arkansas

Have you ever given much thought to whether there are enough hotel/motel rooms in a given area? If you’re like me the answer is probably “No.”

We’re all used to seeing these establishments but I was surprised to learn recently just how many rooms are available in our area and how many more are under construction.

Currently there are some 7,000 rooms in the four cities of Bentonville, Rogers, Springdale and Fayetteville. In the next six months, as many as 1,000 more will be ready to serve travelers.

Bentonville has the highest occupancy rate of all – 95% on Monday through Thursday nights. That’s understandable when you consider all the business people who come to town to do business at Wal-Mart’s home office. On Friday, Saturday and Sunday nights the occupancy drops off appreciably.

Fayetteville normally has a higher occupancy rate on weekends than weekdays but except for University of Arkansas sporting events and Bikes, Blues, and Barbecue it’s probably fair to say that city does not enjoy occupancy rates approaching 95%. But that doesn’t seem to slow construction of still more hotels.

Rogers expects to add at least 300 more rooms when several establishments are completed in 2008. That will bring their count to some 2,500 rooms.

Springdale has approximately 1,500 rooms and will no doubt need more when the new baseball stadium opens next spring.

I am just amazed at these numbers and what it all means to the overall economy of NW Arkansas!

For more information:


Wednesday, November 21, 2007

Housing Market Trends in NW Arkansas—Part 1

The main question that people ask me these days is “how’s the market?” With all of the doom and gloom in the national media about the so-called “housing slump” and the “mortgage meltdown”, it’s possible for sellers to be very pessimistic about selling their homes and for buyers to be hesitant about making such an investment now. But real estate is local, so national trends don’t necessarily reflect what’s happening in NW Arkansas.

In a recent training video to help agents deal with the current shifting market, Gary Keller, founder of Keller Williams Realty, gave the best explanation I have heard to help understand what is happening now. I will try to summarize:

1. The real estate market and the economy as a whole are cyclical. We’ve had down markets before, and it’s inevitable that the market will turn around again and improve. The question now is when that will happen.

2. The past several years have constituted an unprecedented up cycle, with the number of sales and increase in prices steeper than normal. This means that prices may fall more than usual and more sharply before this is all over. For each local market, where we are in this cycle depends on local factors.

3. National trends touted by the media don’t necessarily apply to all local areas. What national trends are is an average of all of the local trends from all over the country. Each local market is different, and the situation here compared to California or other states may vary radically; there are even local markets which do not mirror the national trends and where prices have been falling during the past few years and are now rising.

4. With regard to the crisis in the mortgage industry, aggressive lending policies during the past several years brought many additional buyers into the housing market who possibly should not have been there. These were people with marginal credit who normally would not have been able to get financing to purchase a home. But because lenders were offering them zero-down or low-down-payment loans at higher interest rates but very low introductory rates (sub-prime loans), these people purchased homes, thus contributing to the steep increase in prices. But now the first adjustment of these ARM (adjustable rate mortgage) loans have put the interest rates very high and the borrowers can’t make the new payments, resulting in the record number of foreclosures.

5. This market correction will not necessarily end soon and depends on balancing home prices with affordability. In a normal economy, usually the median home price and median income for a particular area match up; increases in income and home prices occur incrementally, each inching up little by little. However, the spike in home prices during the past few years far outpaced salary increases for most folks. Now we’re at a point where home prices are extremely high and income levels of people possibly wanting to purchase a home have not increased significantly to match the high home prices. What this means is that home prices must come down to “affordability” levels, and normal cost of living salary increases will eventually put home prices and income back in balance. This could take awhile—how long will depend on where each local real estate market is with regard to the cycle.

The housing market in NW Arkansas began its correction about a year ago in Washington County and in the first quarter of 2007 in Benton County. Thus we’re well into the buyer’s market that has resulted from the correction. The past few years of housing boom was a seller’s market.

Ultimately it is not a question of a good market vs. a bad market. The market is the market. Well-priced homes are still selling while overpriced homes are sitting on the market, so sellers may have to adjust their expectations. But buyers are still buying; in October the number of home sales in Fayetteville was 69, only 5 less than in October of 2006.

For both buyers and sellers the rules have changed compared to the last several years of “craziness.” My advice is to seek out a real estate agent who understands these trends and can help navigate the changing housing market in NW Arkansas.

Housing Market Trends in NW Arkansas—Part 2

As I mentioned in Part 1 of this Housing Market Trends Report, real estate is local.

And two reports out last week point to encouraging trends in the real estate market in Benton and Washington Counties. The 3rd quarter Skyline Report and the 3rd quarter report on the economy were both released by the Center for Business and Economic Research at the University of Arkansas.

The numbers show a continued decrease in new residential building permits and improving absorption rates, both of which indicate positive movement for the Northwest Arkansas housing market.

One of the reasons for the current buyer’s market is that there is a very high number of homes on the market. In real estate terms, this is called “high inventory”. To get back to a somewhat balanced market it is necessary to decrease the number of homes on the market compared to the number of buyers.

Everyone has heard of the law of “supply and demand.” Low supply and high demand drives up prices. This was the situation of the past several years, where in order to meet the high demand, builders and developers created many new neighborhoods and built a lot of new homes. Unfortunately now, there is a huge supply (high inventory) and fewer buyers, which drives prices down. But trends in NW Arkansas as indicated by 3rd quarter data do show some positive trends.

For 3rd quarter (July through September 2007), Benton and Washington Counties saw a 5.6% drop in the number of complete-but-unoccupied homes from 2nd quarter of 2007. That’s good news in itself, but even better is that the 3rd quarter 2007 saw a 23% drop from the same period of 2006.

Put another way, in the 3rd quarter 2007, 2,276 complete-but-unoccupied houses in Benton and Washington Counties were available compared to 2,411 unoccupied homes in the 2nd quarter of 2007. This represents a decline of 8.8% in available complete inventory from the 2nd quarter to the 3rd quarter of 2007 in Benton County and a decline of 31.7% from the 3rd quarter of 2006. For Washington County, there was actually a 2.3% increase in inventory over the past quarter and a cumulative increase of 7.7% over the past year. For NW Arkansas as a whole, comparing 3rd quarter 2007 to the same quarter of 2006, the number of complete-but-unoccupied new homes dropped from 2,956 to 2,276.

The absorption rate was better in Benton County than Washington County, which is not too surprising when one considers the dynamic growth that Benton County has experienced. Washington County is a more mature market and while there’s no doubt it too has exploded in recent years, the demand has not been quite as intense as Benton County.

This probably also explains why Washington County home prices have dipped a bit in the past months while Benton County house prices have increased slightly. The average selling price of a home in Benton County increased 1.54% to $192,132. In Washington County the average price decreased 1.83% to $181,796 from $185,130.

Building permits issued in the two counties declined 33% in the 3rd quarter 2007 from the 3rd quarter 2006. A total of 653 residential building permits were issued in the two-county area during the third quarter of 2007, while the average value of new residential building permits remained unchanged at slightly under $165K.

All this points to a general improvement in NW Arkansas. Steady demand for new and existing homes coupled with a decrease in new building permits will help decrease inventory and aid in normalizing the market.

The local situation therefore is not as bleak as the national media would have us believe. It’s actually a very good time to purchase a home here.

1. Prices have decreased, while inventory is still high enough to afford buyers a good selection of homes.

2. The number of new jobs in NW Arkansas continues to increase by about 5,000 annually (3%). But Arkansas as a whole had a disheartening job growth rate of only ½ of 1%.

3. Mortgage rates have dropped somewhat and that will help people qualify to buy more home for the same monthly payment.

4. Less expensive homes are moving at a much better rate than homes costing more than $250,000.

It is also interesting to note that vacancy rates in multifamily housing are increasing throughout the area. Vacancy rates in this type of housing are very cyclical and will undoubtedly improve as the overall market improves.

Many new retail, office, commercial and industrial projects have come on board in the past year so it isn’t surprising that vacancy rates are also increasing in this sector. As buildings sit empty, downward pressure is exerted on rent prices, which may be very tough on developers who completed buildings at record high construction and land costs.

For more information:








Tuesday, November 13, 2007

New Zoning Regulations in Rural NW Arkansas

If you live in NW Arkansas, I’m sure you heard much talk about the rock quarry proposal for the southwest part of Washington County. Debate was loud and lengthy. The end result was the rock quarry could proceed because the county had no zoning regulations to stop it.

And it was just about one year ago that the Quorum Court took action to regulate density around existing city limits. That law established zoning areas within two miles of larger cities and within one mile of smaller towns. Development in those areas is limited to agricultural uses and single-family homes, which must be situated on at least one acre of land.

Now the Court, by a 7-6 vote, has passed an ordinance that zoned all unincorporated portions of the county as agricultural. Residents of the rural areas will now have some say about what is built in their neighborhoods.

The ordinance amends the zoning regulations passed last year. Anything other than a single-family home on at least one acre will be required to go before the Washington County Planning Board to make the case for a conditional-use permit.

Since November 2006, the Planning Board has considered 19 proposals and denied only two: one was a subdivision with 5 homes per acre and the other was to construct storage warehouses in a residential area.

So it seems to me that the new zoning regulations actually protect property values. I know I would not want a rock quarry, smelter, red-dirt pit or noisy factory situated next door to my home, and I don’t know anyone else who does.

In the debate over the most recent decision of the Quorum Court, the usual cry arose from some of the old timers who don’t want anyone telling them what they can do with their land. I think it’s time everyone realized that NW Arkansas is being coming more urbanized every day and rules and regulations are necessary to ensure an orderly society.

I’ll even go so far as to say that I believe it might even be time for building codes in rural areas. It’s not the law yet, but I’ve seen homes in the county that are practically impossible to sell because they were not “built to code.” Buyers these days almost always hire a professional building inspector who has the skill to know good from bad in such things as electrical wiring, plumbing, and structural safety.

Substandard buildings can also be hazardous to the inhabitants. There was a fire several years ago in such a home in Washington County where several small children were killed as they slept.

I don’t ever want to read sad headlines like those again. Laws are generally to protect the people, and I think the Washington County Quorum Court has shown remarkable restraint in trying to balance traditional values with the needs for orderly growth.

For more information:

Refer to my blog archives for article posted November 23, 2006


Thursday, November 01, 2007

Adjusting to Realty in the NW Arkansas Real Estate Market

As the real estate market continues its struggle, buyers and builders alike have to adjust. While driving around NW Arkansas these days, I see subdivisions in various stages of incompletion. Some have a few homes occupied, some subdivisions have been stopped dead in their tracks and the land put up for sale.

At the same time, other subdivisions have undergone revisions and homes are selling like hot cakes.

My take is that some of the higher-end, expensive subdivisions have a long way to go before they will be completed and occupied. Many are mostly empty or at the most half full, especially in Benton County. These were originally planned for large homes with all the amenities on large lots with many restrictive covenants to help maintain a buyer’s investment and life style.

In a concession to the reality of the housing market in NW Arkansas, some builders have revised sizes and costs downward. That’s a hard thing to accomplish. Not only is city approval usually required, but existing property owners have to agree to a relaxation of the covenants.

Smaller houses on smaller lots can affect the value of the larger homes that were built according to the tighter covenants. However, this can be accomplished without sacrificing the value of the larger home if it is done with thought and sensitivity.

I know of one subdivision, for example, where a developer purchased the land, received approval from the city to reduce minimum home size in the covenants, and is now building smaller, more affordable homes. The quality of these homes is excellent--all brick with many amenities of larger homes such as granite counter tops, fully sodded yards, etc., all for about $150K or less. These homes are "selling like hotcakes" in the midst of a supposedly a "slow" market.

Seems to me it’s far better for builders and developers to face reality, reduce costs, and sell homes than to be in a subdivision that sits empty save for one or two homeowners.

And for buyers, I would be leary of purchasing a home in a subdivision with a large number of empty lots or a subdivision where there are a lot of finished homes for sale but few or none have been sold. At some point in the future, a current buyer will want to sell that home, which will be difficult if new homes being built then are on the market and competing to be sold.

In this uncertain market with so many homes for sale, it's particularly important for a buyer to be represented by a knowledgeable buyer agent (like me for example ). In Arkansas, for homes listed by a realtor, there's no extra cost to the buyer to have his own agent, and the buyer's interests are protected.

Buyers should also ask their agents to do a market analysis, as well as to research the history of the home (and subdivision) they have selected, in order that they don't pay too much. Prices are not what they were a year ago, but some sellers haven't gotten the idea yet.

And there are a lot of bank-owned properties out there (foreclosures anyone?) where the home is sold "as-is". So-called "short sales" may be some good deals in this regard. The buyer's agent can advise the buyer how to proceed and what his rights are in the transaction.

For more information:


Monday, October 22, 2007

Will Property Taxes Increase in NW Arkansas?

There’s been a lot of talk lately about the need to increase taxes in our area. The City of Fayetteville, Fayetteville School District, Benton County and Washington County have all mentioned the possibility of higher taxes and the talk seems to be getting louder all the time.

First, let me explain how taxes are determined in Arkansas. One mill is 1/10 of one cent ($.001). The value for tax assessment is 20% of fair market value, which is then multiplied by the effective millage rate. This applies to real estate (homes) and personal property (vehicles, boats and other similar items). A home with a market value of $100,000 would be valued at $20,000 for tax purposes. For example, property within Fayetteville School District and the City of Fayetteville in 2006 was taxed at 50.70 mills. Multiplying $20,000 x .05070 equals a tax of $1014.00.

The City of Fayetteville says it will probably need a 0.9-mill increase to compensate for falling sales tax revenue.

Fayetteville School District says it will need a millage increase of 4 to 10 mills in the not too distant future to build a new high school.

Washington County needs money to replace bridges, one of which has been closed to all traffic and three more bridges need major repairs. This has caused county officials to seriously consider raising the road tax to 3 mills, an increase of 1.9 mills.

Benton County is thinking about a sales tax increase to cover the expenses of moving juvenile detention and court facilities.

As you can see, there are many reasons for possible tax increases and just as many pros and cons. I don’t have the space here to go into all the ramifications, but quality of life has to be given serious consideration. Without street improvements, good schools, adequate police and fire protection, clean air, parks, etc., quality of life decreases.

Higher taxes make most people unhappy. No one ever asks how much more they should pay yet most of us complain about gridlock on the roads or not having immediate response when we need a police officer.

I read recently that Fayetteville City government may cut cost-of-living adjustments for employees in order to lower the tax increase. I have to agree with police and fire fighters – that’s not the best way to balance the budget. City employees deserve to have their wages keep up not only with inflation but also with pay scales in similar cities. We don’t want to lose good, experienced police, fire fighters, and city workers.

Washington County reassessed all real estate in 2007, which resulted in higher appraised values for nearly every parcel. The increased value will be reflected on next year’s tax bills and means higher taxes even if the millage rate is unchanged.

Sam’s Club moved from Springdale to Fayetteville just a few weeks ago. Naturally, that means more sales tax revenue for the city. Malco Movie Theater just opened its brand new, state-of-the-art, digital 12-screen theater in Fayetteville, which is also expected to bring in more sales taxes. But these two new sales tax sources will not make up for the reduced level of revenue from sales taxes in Fayetteville.

Another factor to keep in mind is that Fayetteville is the lowest taxing city of any of the major towns in NW Arkansas, according to Mayor Dan Coody. And a modest increase in the millage now may prevent a larger increase in the future.

Some government entities have money in reserve accounts. I know we have to have money in the “rainy-day fund,” but dark clouds are already gathering.

The needs are numerous, expensive, and easy to justify. Maybe we need to face reality and dig deeper into our wallets.

For more information:






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.

For more information:


Saturday, October 06, 2007

Property taxes due this coming Wednesday

Just thought I would post a reminder that property and personal property taxes in Arkansas are due this Wednesday. If you don't pay on time, there will be a 10% late fee.

Many home owners pay their taxes as part of their monthly mortgage payment. The annual tax is divided into 12 and the home owner pays 1/12 each month. Then when tax bills are sent out, the bank pays the property tax, usually in April or May. These folks can rest easy, since their property taxes have already been paid.

But if your bank is not paying your property taxes as part of your mortgage and you didn't pay them last spring when the bills were sent out, then you only have a few more days to pay them. There are also those pesky personal property taxes. Those are also due now, if you haven't already paid them when you got your bill last spring.

One good thing if you don't want to stand in line at the county courthouse in Washington or Benton County--you can now pay them on line with a credit card or have them directly deducted from your checking account. But if you want to pay from your checking account in Washington County, make sure you have your tax bill handy, since you will need it for security purposes. There is also an extra charge in Washington County to pay on line. I'm not sure about Benton County, since I don't live there.

The web addresses for the two county websites are:


What’s the Mortgage Crisis All About?

That’s the question I’m being asked a lot these days. I’ll try to answer in layman’s terms.

First, most homeowners will not be directly affected by the current crisis in sub-prime mortgages. Homeowners with conventional, non-adjustable mortgages will continue making their mortgage payment and owning their home just as they always did.

Now a little history. The problems started a few years ago when lenders began making risky and expensive loans to buyers with less than desirable credit histories. Mortgages requiring no down payment or interest-only payments were given to almost anyone who asked. Some buyers were even permitted to borrow more than the current value of the home, justified by the idea that the value would surely increase.

Another practice by some predatory lenders is behind much of the current mortgage fiasco. These lenders offered extremely low “teaser” interest rates that would significantly increase at some point in the future.

The future is here! The interest rate on many of those mortgages has increased dramatically.

When a lender gives a mortgage, he in turn “bundles” that mortgage along with many others and resells them to investors. That’s common practice and it’s what’s causing jitters in the financial markets these days. Investors are nervous about recouping their costs on these risky mortgages – never mind making a profit.

The sub-prime mortgage has dried up and blown away. There are plenty of banks and mortgage companies still making fixed rate 15-30 year mortgages to credit worthy buyers. But unconventional mortgages being made to buyers with unsubstantiated income, poor work history, and poor credit are history.

Overall, this is a good thing. When things settle down, buyers will have safer, surer mortgages financing their homes.

As I said earlier, most homeowners will not be directly affected but everyone has been indirectly affected.

As buyers whose interest rates have jumped up cannot make the payments, a ripple effect sets in. That’s bad enough, but thousands more will face the same problem in the next couple of years as their interest rates reset.

When lenders foreclose and homes sit vacant, prices start to drift downward. That can affect all the houses in an area, particularly if that area had a large number of homes financed by sub-prime mortgages. When the inventory of homes for sale increases, prices dip even further.

Lenders have tightened credit standards. That translates into fewer eligible buyers, which can mean a greater supply of unsold inventory, both existing homes and new construction.

As the inventory of unsold homes increases, fewer new homes are built. Naturally, that means fewer paychecks going to construction workers and fewer purchases from wholesalers. Families have less disposable income and retail sales take a hit.

I’m sure you get the picture.

Here’s the good news. Activity in only seven states (Arizona, California, Florida, Indiana, Michigan, Nevada, and Ohio) accounts for the overall rise in delinquencies nationally.

The Federal Reserve Board recently lowered interest rates, thereby helping to stabilize financial markets.

Congress is considering revising rules that govern Fannie Mae and Freddie Mac, which buy nearly all prime mortgages under $417,000.

Treasury and HUD are looking to find ways to assist borrowers who are creditworthy, but who got caught in a pinch and are facing mortgage payments than they can no longer afford.

Best of all, do not be discouraged. There are plenty of banks and mortgage companies still making fixed rate 15-30 year mortgages to credit worthy buyers. Reputable, conservative lenders have money for mortgages to credit-worthy borrowers. Interest rates are favorable. There are lots of homes on the market; it’s a buyer’s market.

If I can help you buy a home, call me. It’s what I do full time. I would be happy to help you in these confusing times.

For more information:






Saturday, September 22, 2007

Bikes, Blues & BBQ Rally in Fayetteville

The 8th Annual Bikes, Blues & BBQ Rally will be rolling into Fayetteville October 3rd through Saturday, October 6th this year. It’s a popular event with something for everyone from the long-time Harley enthusiasts to the novice “wannabes” and everyone else looking for family fun. Last year more than 300,000 people attended and this year will no doubt be even bigger and better.

If you’ve never been to the Ozarks at this time of year, that’s reason enough to make your way here. The weather is about as close to perfect as you can wish for with warm days, cool nights, and average temps in the 70s. The fall foliage is an added bonus. Leaves are usually turning colors at this time and the drive to Fayetteville is beautiful.

Fayetteville is located only six hours from Dallas and St. Louis, five hours from Memphis, four hours from Kansas City, and two hours from Tulsa, Oklahoma and Branson, Missouri.

Obviously the rally itself has motorcycles of every description, plus vendors, free musical venues, and BBQ cookoffs. There is a parade, a raffle featuring a $19,000 Harley-Davidson, a poker run, the Johnsonville Big Grill that’s so big it can grill 2,500 brats an hour, the Miss Bikes, Blues & BBQ contest and much, much more.

In addition, the rally is good, clean fun. A lot of effort goes into keeping it family friendly and in keeping with community values. Fayetteville is a beautiful city that welcomes all its visitors so come on down and join the fun.

Perhaps best of all, Bikes, Blues & BBQ is a non-profit organization that donates proceeds to area charities. When the 2006 rally was over, about $150,000 was donated to local charities.

For more information:


Sunday, August 19, 2007

Fayetteville School District to Raise Teachers’ Salaries

Fayetteville School District will be able to bring teachers’ salaries more in line with the other large districts when schools open this year.

The increased salaries will cost the district some $4.5 million each year. But no tax increase was necessary, just some creative financing.

Voters in 2005 rejected a 4.8 millage increase, an increase that was touted as being necessary to raise salaries.

You may wonder then, as did I, how is this possible. Here’s what I’ve learned…

Transferring the West Campus to Northwest Arkansas Community resulted in savings of approximately $1.9 million. (High school students who had attended West Campus were absorbed into the main high school campus but caused little added expenses to the high school’s existing budget.)

Federal funding is expected to increase by about $500,000.

Normal growth will increase property tax revenues.

Now for the creative part of the financing – simply become a little less conservative when projecting the percentage of property taxes the district expects to receive.

In the recent past, the district budgeted as if only 90% of the property taxes would actually be collected. (Collecting all 100% of taxes just never happens in reality.)

But FSD has now changed their projection to 93%.

So, between normal growth and simply changing the projection rate, another $2.1 million becomes available.

There is no doubt the raises are necessary to recruit good teachers. Fayetteville had previously offered a first-year teacher a salary of only $36,000. Springdale offers $40,521, Rogers $41,000, and Bentonville $40,503. Fayetteville will now be able to pay a novice teacher a starting salary of $40,500.

Arkansas law requires a minimum pay of $28,611 for new teachers. While some school districts actually do pay that little, no district in NW Arkansas would be able to hire teachers for that pittance.

Additionally, Fayetteville will now be able to raise salaries for experienced teachers. Again, the raises are necessary to keep good teachers. Fayetteville teachers will now top out at $65,301, Springdale $69,021, Rogers $67,088, and Bentonville $64,170.

It’s interesting to note the Little Rock School District, the largest public system in the state with 26,600 students, has a starting salary of only $31,595 and tops out at $61,549.

Good teachers are worth every penny they earn. Let’s be glad they will get a well-deserved raise.

For more information:


Fayetteville High School - Where, When, and How?

Few things affect an entire city as much as the quality of its schools. As I noted in my blog posting March 17, 2007, Fayetteville’s School Board has voted to add 9th grade to high school and maintain only one high school. Obviously that vote killed speculation about keeping the present high school and building a second school elsewhere.

The school district owns 100 acres in Fayetteville’s northwest corner where a new school could be built. Advocates say it would be modern, have all the latest technological bells and whistles, provide better security to students and faculty, and would presumably inspire and facilitate a desire for knowledge in its student body.

It would also be on the ‘other’ side of I-540, miles away from central Fayetteville. Many people feel strongly that location is too far away from the central part of the city.

So far no one has stated that is the only site under consideration, but given the price of land in NW Arkansas and the amount of land needed, there are few alternatives.

Some people feel building at the new site would actually be less expensive because the current high school buildings and land could be sold – for anywhere between $39 million and $61 million.

If the 100-acre site in NW Fayetteville were sold, it would bring in approximately $6 million.

The Fayetteville City Council recently endorsed keeping the high school at its current location, a decision with a considerable number of backers. While that decision has no binding effect on the school board, it does clarify the council’s opinion.

However, members of the Fayetteville Chamber of Commerce favor building a new high school at an unspecified site.

The pros and cons are numerous and so are the memories and traditions attached to the existing school. But we must move beyond emotions and make some tough decisions.

Here’s the way I see it:

It going to cost a lot of money – whether it’s a new school or enlarging the existing school.

As far as I can determine, no one has actually determined what size high school should be built – 3,000 students, 4,000 students, or possibly more.

If we don’t know what size is needed and we don’t know where to place it, how can the cost be estimated?

A new high school would probably not be ready until at least 2011. Predictions call for approximately 2,700 students in grades 9-12 by 2011. Board members indicated they expect the district to have a relatively slow growth rate in the future – perhaps a maximum of 2%. At that rate, it will take until 2017 to reach 3,000 students.

The school district will have to call an election, probably in 2008, for a millage increase. At 43.8 mills, Fayetteville’s school taxes are already the highest of any district in NW Arkansas.

Fayetteville voters have, in recent years, been reluctant to pass millage increases. The largest millage increase passed by voters in the past 20 years is 4%.

The school board is facing some very serious issues. No matter what they decide, there will be happy and unhappy residents. If the unhappy people don’t join the other side, passage of a millage increase seems doubtful.

Let’s all stay informed as the discussions continue and please, let no one forget the most important point of all – the education of our children. They deserve the best education possible.

For more information:







Tuesday, July 24, 2007

New Washington County Property Appraisals

The Washington County Assessor's Office determines the value of property every three years.

Most owners have by now received Notice of Change in Assessment letters and the majority of those letters indicate increased values, much like what occurred when reassessments were done in 2004. At that time, assessed values increased significantly over previous assessments, as they were brought more in line with market value at a time when the market was increasing at double-digit rates. Previously assessed values were much less than market value.

Here’s how it works. First the 2007 Appraised Value is determined. That amount is multiplied by 20% to determine 2007 Full Assessed. Then the 2007 Full Assessed is multiplied by the millage rate in effect where the property is located.

People usually get upset anytime they see their taxes increase and this year is no different. One of the most common complaints I hear is that property values have gone down – not up. But the important thing to remember is that the reappraisal compares property values in 2004 to 2007. I think it’s fair to say most property values in Washington County have increased in the past three years.

On the other hand, some of the new appraisals are clearly out of line, but it is an individual situation. For example, I have a client who purchased a new home last August for $165,000 and whose reassessment says it is now worth $175,000. According to market data I have analyzed (check my first quarter market report in the archives of this blog), prices decreased in the last quarter of 2006 in Washington County by about 14%. Although they began rising again in the first quarter of 2007, if my clients where to market their home now, they would be hard pressed to even get what they paid for it a year ago.

Here are two important statements which I took directly from the Notice of Change in Assessment:

“Assessments on properties serving as the principal place of residence for any taxpayer who is disabled or who is 65 years of age or older prior to Jan. 1, 2007, shall be assessed at a level no greater than the Previous Taxable Assessed plus the full assessed value on any modifications made to the property that were not previously assessed.”

“Assessments on properties serving as the principal place of residence for all other taxpayers shall be limited to a 5% increase over the Previous Taxable Assessed plus the full assessed value on any modifications made to the property that were not previously assessed. The 5% increase will occur yearly until the Full Assessed Value is reached.”

This limit extends so long as the property is not sold. The full appraised value kicks in once the property is sold to a new owner.
If you feel your property is unfairly assessed, call 479-587-1130 to speak with an appraiser at Arkansas CAMA Technology, Inc., the firm that performed the appraisals for Washington County.

If you wish to schedule a formal hearing with County Equalization Board, call the County Clerk’s office at 479-444-1711 no later than August 20, 2007.

Hearings will begin August 1, 2007 and if required, will continue through October 1, 2007.

One piece of good news – With 2007 taxes, which are due in October 2008, homeowners will receive up to $350.00 property tax credit on the property serving as their principal residence. This is an increase of $50 over 2006 taxes, which are due October 2007. If you have not previously applied for this credit, do so by calling the Washington County Assessor at 479-444-1500.

For more information:

Thursday, July 12, 2007

It’s Difficult to Define “Dry” in Benton County

I was surprised to learn recently that yet another initiative is underway to change Benton County from dry to wet – wet meaning legal to sell alcohol in restaurants, taverns, and liquor stores.

Benton County has been dry for as long as I can remember. But that doesn’t mean you can’t sit down at a restaurant or hotel and order a cocktail. Far from it!

Private clubs can serve alcoholic beverages to their members and there are currently more than 100 “clubs” in Benton County doing just that.

It’s easy to become a private club. All that’s required is a small group of people getting together and declaring a common purpose for the club, such as researching where rainbows actually end. After a small amount of paperwork, it is then legal to serve alcohol to the club’s members.

When a customer enters the club (i.e. restaurant or hotel), he is asked to sign up for membership or sign in if he has previously joined. It’s that easy!

What is difficult is to change a county in Arkansas from dry to wet. The law requires 38% of all registered voters in the county to sign a petition before the question can be placed on the ballot. Each and every signature must be verified, which means several thousand additional signatures must be obtained to offset the inevitable invalid signatures. An initiative in 2006 failed to gather enough signatures in the time allotted.

Just imagine the Herculean effort it would take to obtain the signatures of 38% of voters (some 31,000 people), when many elections have less people than that show up to vote.

I wish the founders of the current petition initiative well. I think it’s ludicrous to allow drinking in so many “clubs” while anyone wanting to have a drink in his own home has to drive to a liquor outlet in another county (Washington) or even a neighboring state like just over the line in Missouri. It’s no accident that there are a whole bunch of liquor stores just across the state line north of Benton County doing a thriving business.

Why would Benton County want all the additional traffic on their already over-crowded roads as people cross over county or state lines to buy alcohol?

Why would Benton County want to continue losing sales tax revenue that those package sales produce?

Makes no sense to me. (Plus it’s totally hypocritical).

For more information:


Sunday, July 01, 2007

All Eyes on Springdale for 63rd Annual Rodeo of the Ozarks

You’ll probably want to experience the fun at Parsons Stadium in Springdale July 1-4 when the Rodeo of the Ozarks takes center stage to help celebrate our nation’s birthday!

From the “Mutton Bustin” competition for kids to bull riding for the toughest cowboys around, there are events for everyone to enjoy. More than $100,000 in prize money will be awarded in this Professional Rodeo Cowboys Association sponsored event.

There will be food, parades July 1 and July 4, fireworks every night after the rodeo, Grand Entry each night at 7:30 p.m. and even Junior Grand Entries. A new Miss Rodeo of the Ozarks will be crowned July 4.

Parsons Stadium, named for founder Shorty Parsons who headed the group of originators back in 1944, is located at 1423 E. Emma Avenue in Springdale (corner of Highway 265 & Emma Avenue).

For more information:


Friday, June 15, 2007

Baseball in Northwest Arkansas is a Natural

A lot has happened since I last wrote about the baseball stadium Springdale voters approved July 11, 2006. The AA team currently known as the Wichita (Kansas) Wranglers is definitely moving to Springdale to start the season in April 2008.

When it arrives, the AA affiliate of the Kansas City Royals will be known as The Northwest Arkansas Naturals. The new name is a reflection of Arkansas’s state motto, “The Natural State” and it also calls attention to the natural beauty of NW Arkansas.

A stunning logo has been designed and approved. It features a mountain range with a cascading waterfall, a whizzing baseball, and an “ N” with a lightning bolt for its diagonal leg. The colors are cardinal red and Royals blue. NW Arkansas has more than 100 naturally occurring waterfalls so the logo continues the theme of The Naturals.

Earthmovers have been very busy at the site, as has the City of Springdale. Plans, negotiations, bidding, budgeting, and changes have kept the city leaders busy. But things are now falling into place.

Bids to construct the stadium itself came in $4.7 million to $13.3 million over budget. Luckily, bids for other necessities such as site preparation, parking lot, and road improvements were all at or under estimate.

The team owner, Rich Baseball Operations, pledged $1.4 million to help meet the shortfall and a few cuts were made from original plans; specifically two party decks, five sky-box suites, and 250 seats. Even after the cuts, the stadium will have 6,250 chair-back seats and 25 boxes. The sky boxes have all been sold and more can be built in the future.

It’s an exciting time for Springdale. I’m sure the stadium will give the city much to be proud of and by broadening the name of the team to The Northwest Arkansas Naturals, the entire area will feel connected to “its” team.

Let’s play ball!

For more information:


Friday, June 01, 2007

Roads Must be Improved ASAP

Everyone says NW Arkansas is a wonderful place to live – until they are stuck in the traffic during the daily commute to and from work. At those times of day, most people agree gridlock is not desirable.

Even mid-day, traffic can sometimes be insufferable. The intersection of Joyce Boulevard and North College Avenue in Fayetteville is either the busiest or second-busiest intersection (depending on which statistics you read) in the entire state of Arkansas!

U.S. Highway 412, the main road to Tulsa, runs east-west through Springdale and carries an immense amount of 18-wheelers mixed in with passenger vehicles. It seems there are traffic lights every block or two.

Walton Boulevard in Bentonville resembles a parking lot during the daily commute and lunchtime isn’t much better.

Something must be done to construct/improve/widen roads without further delay.

Many local highways that carry heavy traffic are two-lane roads, turning and twisting through the countryside. If you enjoy a leisurely drive, the roads are beautiful. But if you are trying to get somewhere in a timely manner, that trip can be slow and stressful. Time and money are wasted minute-by-minute and mile-by-mile.

The problem isn’t that the powers-that-be haven’t realized something has to be done. It’s more a problem of money, of course, and location.

Nearly everyone wants the improvements but very few want them in their own backyard.

Springdale has been in lengthy discussions about widening Wagon Wheel Road from Hwy. 71B to I-540. Should it be four lanes with a tree-lined boulevard or five lanes including a left turn lane?

The answer depends on where you live. The commuter wants roads where they will improve his trip. The farmer wants to be able to move his slow-moving equipment from one area to another. Folks in the new subdivisions want aesthetically pleasing surroundings - not sounds of the freeway next door.

Fayetteville is considering widening Mission Boulevard, Township, North, Zion and Hwy. 16 to Elkins and more. These roads wind through neighborhoods crisscrossing the city.

I fear the same fate awaits these projects as befell a similar proposal several years ago when Township Road was proposed as a wider "artery" street. Neighbors vehemently opposed it and the proposal died.

We can play ostrich by burying our heads in the sand or we can face reality. Growth is here and more is on the way. Growth is inevitable and necessary if the area is to continue thriving.

Let’s wake up and smell the exhaust fumes. We will soon be in total gridlock if we don’t take steps to improve the infrastructure. We must prepare!

The City of Springdale deserves commendation for their proactive approach to traffic. They are currently building east-west corridors to help alleviate the strain on U.S. Hwy. 412.

Also on the drawing board is the U.S. 412 bypass. Plans call for Hwy. 412 to go north from west of Tontitown, continue north of Springdale, and then turn south to rejoin Hwy. 412 east of the Springdale city limits. Cost estimates for the bypass are currently in the neighborhood of $350 million. However, no one dares guess when it might actually be built and inflation drives up the cost every month.

For more information:



Saturday, May 19, 2007

60 Minutes—A big disappointment

I’ve always been a fan of 60 Minutes on CBS. Their stories are usually interesting and they usually bring to light facts that one doesn’t usually hear on the nightly news shows.

But a week ago, the piece they did about real estate was a big disappointment, to say the least. It was extremely slanted and wasn’t even accurate. There are many objections I could talk about, but I will focus on only a couple of the more important issues raised.

The introduction to the segment began: "For realtors, the six percent commission is sacrosanct. It's remained in place, even as the price of homes has quadrupled over the past 25 years," goes the set-up. "But as correspondent Lesley Stahl reports, things are beginning to change. What happened to travel agents, stock brokers and book sellers -- the encroachment of the Internet -- is beginning to affect real estate agents. And the sacred six percent is under assault from online discounters."

As Blanche Evans of the Realty Times notes: “the six percent commission is not sacrosanct. In some areas it's seven percent, but in most areas it's less, because competition -- brought on by the swelling of agents into an already highly competitive business -- has reduced commissions and gross incomes for most Realtors.”

She goes on to refer to an internal report from the National Association of Realtors® (NAR), which found that commissions typically range from 4.3% and 5.3% as of 2005. And income for real estate agents generally has steadily declined as membership in NAR has skyrocketed during the past couple of boom years. According to NAR’s 2007 member profile, the median gross income for all Realtors in 2006 was $47,700, down slightly from 2004 when median gross income was $49,300. And that’s before expenses, which are significant

These are hardly incomes to write home about as the cost of living has increased. Many students just graduating from college are offered jobs with higher starting salaries than that and the only deductions they have are taxes--not business expenses, such as advertising for listings, internet websites, MLS dues, license fees, gasoline for showing properties, increased FICA deductions for being self-employed, to mention just a few.

In addition, the average agent does not receive the entire commission. Whatever commission the seller is paying is divided 4 ways—listing agent and listing company, selling agent and selling company. The result is that the agent usually gets about 1.5% or less of the sales price of any property, unless the listing agent sells the home. The implicit theme in the 60 Minutes story of Realtors gouging the public is just not accurate.

Another topic alluded to was the fact that many states have minimum service laws. Stahl’s interpretation of these laws was that they constituted a restraint of trade and prevented discount brokerages from existing in the states where they exist. What is not mentioned is that these laws were put into place to protect the public after many complaints from the public to licensing entities in the states where they exist.

Allyson Hoffman, a Realtor in Illinois, explains in her blog response to the 60 Minutes segment that the minimum service law in her state was one such law—there were so many complaints that legislators felt that consumers needed an assurance that at least basic real estate services were being provided by the discounters. In addition, Hoffman notes that full service real estate firms provided their sellers with more money in their pockets than did discount firms and sold their homes in less time, another fact that Stahl ignored. The issue is not really whether there is a 6% commission or something less, but rather what puts more money in the consumer’s pocket at the end of the transaction. Studies from NAR have supported Hoffman’s assertion.

A major problem with the 60 Minutes piece is that it was totally one-sided. Most of the people interviewed were from high-tech companies or discount brokerages. NAR worked with the producers of the piece for almost a year, and yet they declined to interview anyone from the organization to provide a balanced report. Instead NAR got the so-called “empty chair” treatment, a throw-away line that NAR disputed some of the claims of those interviewed. The absence of a NAR spokesperson gave the opposing views presented more weight to further the biased point of view of the piece. And the real estate agent they did interview was not articulate or capable of speaking to the issues raised.

I could go on and on. Ultimately the piece was a promotion for discount and internet companies who provide little or no fiduciary counsel to their clients and fed the current realtor-bashing debate. The bottom line for me is that I really don’t understand why people think that Realtors make too much money for what they do. I guess it’s because most people don’t really understand what we do.

How many people would work hours and hours without being paid for it? Real estate agents do it all the time—the sale that doesn’t close because of unresolvable problems or because the buyer was not approved for the loan, buyers who occupy hours (even days) of an agent’s time (and gasoline) and then go purchase a “for sale by owner”, sellers who change to a different agent when the listing period is up because they priced their home too high (contrary to the advice of their agent) after the agent has spent hours and hours on the sellers’ behalf and paid for numerous newspaper and magazine ads, internet advertising, etc.

The current commission system is antiquated, based on a system where the real estate agent takes all of the risk and assumes all of the expenses with the hope that the transaction will close so that the agent will finally get paid for all of the work he or she has done. Some of these tasks can indeed be done by the home seller (i.e. flyers, open houses, etc.). However, the most important services of real estate agents are to provide fiduciary advice and counsel to their clients, based on their experience and expertise, as well as to trouble-shoot problems that may arise in a transaction, provide a “buffer” between buyer and seller, and negotiate on behalf of their client. These are services which merit payment whether there is a sale or not.

There are new models being developed for payment of real estate agents, but they are not yet widely used in the industry. One is a consultant model, whereby Realtors would be paid by the hour or by the job, much like lawyers, doctors and others. The goal is to provide choices based on the client’s needs and actually get paid for the services provided, whether there is a sale or not—a much more logical approach. More on this in a future post.

Yes, Stahl was right on one thing--technology is assuming more importance in the industry, but there is no substitute for an experienced professional. I provide MLS listings and other on-line services to assist my clients and potential customers and provide better service. But the internet is just one of many tools in my toolbox. Real estate is still about relationships and people-to-people contact, so I value my clients, especially those who wish to have me serve them in the sale of the property I helped them buy and those who thought I did a good job for them and recommend me to their friends and colleagues. As Mollie Wasserman, an agent in Massachusetts, states in her internet warning:

REAL ESTATE INTERNET WARNING: Despite advertising claims to the contrary, the internet is not an experienced Real Estate Professional. It cannot consult, counsel, advise, have knowledge of local laws and market conditions, make judgments, “own” the result, or most importantly, understand your individual goals and needs and care about you as a Client.

I work hard for my money, and I strive to provide the best service possible to help my clients either buy or sell what is (for most folks) the largest purchase they will ever make. Buying or selling a home is not a simple thing that can be done on the internet. And I’m sick and tired of the general public’s perception that I don’t DO anything to earn my paychecks. Realtor bashing may be in style, but it’s not fair to hard-working agents all over the country who put clients’ needs above their own, solve innumerable problems, and work long hours (including evenings and weekends) to assure that the transaction will close, just so we can finally take home a paycheck. We deserve to earn a living wage too.

To view the NAR response:


For additional commentary about the program and the issues:







Friday, May 11, 2007

Fayetteville and One Developer Cooperating to Offer Affordable Housing for City Employees

I want to commend the City of Fayetteville and developer Hank Broyles and his partners, John Nock and Lex Broyles, for their cooperative efforts to create affordable housing for city employees. As you know affordable housing is one of my "pet" subjects in this blog.

Some expensive road realignments were called for at Broyles’ new Holcomb Heights subdivision of 105 homes. The city agreed to pay up to $50,000 towards the costs if Broyles would agree to lower the price on some of the homes.

The least expensive homes in the subdivision were expected to cost $131,000. With the city’s financial help on the road expenses, Broyles said he would be able to lower the cost to $120,000 on six homes. Broyles said he would market the homes directly to city employees because the average city worker would be able to quality for a mortgage on a $120,000 home.

It is important to note, however, buyers do not have to be employed by the city. The homes will be sold to anyone who qualifies.

We all know that municipal workers are needed and appreciated. Police officers, firefighters, office staff, meter readers, park workers, sewer maintenance people - none are over paid by any standard. Without these workers, the city would be a disaster.

Currently more than 50% of the city’s employees live outside the Fayetteville city limits. It is generally believed they cannot afford to live in the city.

It’s refreshing to see what can be accomplished when all parties cooperate. While this innovative cooperation between a developer and the city will lower the cost on only six homes, it is a beginning. It is also a clear example of what might be accomplished in the future.

For more information:


Monday, April 30, 2007

First Quarter 2007 NW Arkansas Housing Market Update

According to the National Association of Realtors®, the GDP (Gross Domestic Product—or total value of goods and services produced in the US) grew at a slower than expected 1.3% in the first quarter of 2007, due in part to the housing slump across the nation.

On April 25 the National Association of Realtors® announced that sales of existing homes plunged 8.4% in March, the worst one-month decline in 18 years. The median price of an existing home nationally fell to $217,000, a 0.3% decline from March 2006. Inventories of unsold homes nationally rose to a 7.3-month supply, the highest level since October. New home sales in March rose 2.6% over February, but were down 23% from March 2006, the second weakest year-over-year sales performance since September 2001, according to an April 25 report from the Census Burea. Surprisingly, the median price nationally of a new home sold in March was $254,000, up 6.3% from the price of a new home sold a year earlier.

Home sales in NW Arkansas, as elsewhere, were down in the first quarter of 2007 compared to the last quarter of 2006. This is a normal seasonal occurrence, since the NW Arkansas housing market is largely weather driven, and we had awful, cold weather. But homes are now taking longer to sell due to elevated inventory in almost all price levels, with the average days on market (DOM) up in all of the NW Arkansas towns. The “buyer’s market” discussed in media reports does exist here, and with high inventory and falling prices, it might be a good time for buyers to purchase a home in NW Arkansas. Nevertheless, each town does have slightly different market trends.

An exception to what I have said above, Fayetteville actually experienced an increase in home sales in Q1 2007 with 258 homes sold (86 per month), compared to 248 homes sold in the Q4 of 2006 and the same number sold in the Q1 of 2006. As for prices, after a drop of almost 14 percent in the last quarter of 2006, the average price of homes sold in the first quarter of 2007 increased by almost 6% to $216,013. The median price of homes sold was $189,900, and the DOM was 137, up from 110 in the 4th quarter of 2006. The highest average sales price in the past couple of years was $236,616 in the 3rd quarter of 2005.

Springdale’s housing market is down from both the past quarter and from the same quarter last year. There were 275 homes sold in Q1 of 2007 compared to 283 in Q4 of 2006 and 313 in Q1 of 2006. Average DOM has increased to 132 over the past year from 111 in Q1 of 2006. The average and median sales prices have also decreased over the past year. Average sales price is down almost 8% compared to Q1 last year and almost 3% from the last quarter. The average sales price for Springdale during Q1 of 2007 was $160,882 after a peak in Q2 of 2006 of $181,380. The median price of homes in Springdale in Q1 of 2007 was $149,900—a decrease to the same level as in Q4 for 2005. It should be mentioned, however, that not only does the decreased average and median sale price reflect lower prices for homes, but also the increased availability of less expensive homes. This might be a good time to invest in a home in Springdale.

Bentonville is still the most expensive place to purchase a home in NW Arkansas, with an average sale price of $235,229 during Q1 of 2007, compared to $212,666 in Q1 of 2006. However, prices have dropped slightly from the highest average sale price in the past couple of years, which occurred in Q4 of 2006 at $238,659. However, the median sale price is now the highest it has been at $209,000, compared to $194,500 in Q4 of 2006 and $180,000 in Q1 of 2006. The median price represents the middle price of all homes sold, with equal numbers of more expensive and less expensive homes sold. This increase represents a 16% increase compared to Q1 of 2006 and almost an 8% increase from the last quarter of 2006.

Average days on market (DOM) in Bentonville has reached 162, up from 142 in Q4 of 2006 and 124 in Q1 of 2006. And the number of homes sold in Bentonville during Q1 of 2007 has decreased significantly to 151, compared to 192 in the same quarter last year and 197 in Q4 of 2006. The highest number of homes sold in the past couple of years in Bentonville occurred during Q3 of 2005, 292 homes.

The picture in Rogers is slightly different from that of Bentonville. It is the same in that fewer homes were sold in Q1 of 2007 compared to Q4 of 2006 (279 compared to 319), but when compared to Q1 of 2006 (275 homes sold), more homes were sold. Also both median and average prices have declined. The average sale price in Q1 of 2007 was $193,807 and the median sale price was $160,000. This represents a drop of 14% compared to Q4 of 2006 and 13% compared to Q1 of last year in average sale prices, and a drop of over 7% in median sale prices compared to Q1 and Q4 of 2006. As in Springdale, this signifies both falling home prices and the increased availability of less expensive homes. The DOM is up to 167 days, compared with 147 in Q4 of 2006 and 122 in Q1 a year ago.

Bella Vista’s market, in some respects, has remained somewhat steady in comparison to the other towns of NW Arkansas. This could be because the price ranges of homes are more limited. Nevertheless, there was also a decline in the number of homes sold in Q1 of 2007 compared to the previous quarter, from 243 to 200. The number of homes sold in Q1 of 2006 was 265. As in the other NW Arkansas towns, average DOM increased from 135 to 145, the highest it has been in the past couple of years.

But prices haven’t changed that much in Bella Vista. The average sales price did decline slightly from $178,789 in Q4 of 2006 to $176,201 in Q1 of 2007 (only 1.51%). The median price increased slightly in the same period from $155,000 to $159,000 (only 2.58%).

All in all, many of the changes are normal seasonal ones and follow similar patterns to previous years. As mentioned earlier, the weather does have a significant effect on the NW Arkansas housing market, and this winter has been extremely cold. Another factor has been the large amount of media type about the “housing slump” which made many buyers afraid to purchase; they didn’t want to pay too much if prices were going down.

Until the past couple of quarters, NW Arkansas seemed immune to these national trends with home prices rising even as they were bottoming out in other parts of the country, but an adjustment has finally occurred.

Yes, prices have come down, so this might be a good time to buy, since the supply of homes is up and interest rates are still down. It is definitely a buyer’s market in almost all price ranges. And now that the weather is improving, I have noticed a decided increase in buyer activity.

Note: Data for local statistics in this report is from the NW Arkansas MLS and included only homes that were listed by real estate agent members of the MLS. It does not include For Sale by Owners or other properties not listed by a real estate firm. For comparison purposes the national median home price in Q4 of 2006 was $219,300. NW Arkansas is still a “good deal.”

These figures do vary according to price range, city, and neighborhood. If you would like more information on your specific neighborhood, email me at judy@judyluna.com.

For more information on other economic indicators for Q1 2007:


Monday, April 23, 2007

Reflections on the Life of Helen Walton

Helen Robson Walton, widow of Wal-Mart founder Sam Walton, died last week. Her passing signifies the end of an era, but her influence will live on.

Lady, Christian, philanthropist, savvy businesswoman, unpretentious, caring humanitarian – these are but a few of the adjectives used to describe Helen Walton. She was a loving wife and mother to Sam and their four children and “the woman behind the successful man.” One might wonder if (in a different generation) she might not have been the founder of Wal-Mart.

Helen Walton was a woman’s libber before that term was even coined. She earned a bachelor’s degree in finance at the University of Oklahoma in 1942, back when such a pursuit was unusual for a woman.

She pushed to have women on Wal-Mart’s board of directors and in 1986 the first woman, Hillary Clinton, joined the board. Helen also understood early on, the long-term importance of providing profit sharing to Wal-Mart employees, to which Sam agreed.

Always active in the Presbyterian Church, Helen was the first female vice-chair and first female chair of the board of trustees for the Presbyterian Church (U.S.A.) Foundation. She also was active on the board of the University of the Ozarks in Clarksville, Arkansas, and was its honorary lifetime chairwoman.

Helen Walton personally supervised the $3.6 million scholarship fund for Central American students at John Brown University, University of the Ozarks, and Harding University. According to Wal-Mart, about 1,000 students have participated in this program since 1985. Most, if not all, the students have returned or will return to their home countries after graduating with the intent of improving the lives of their fellow citizens.

She was the person behind the Wal-Mart Foundation, which has given untold millions of dollars to the community. One example is a $300 million donation to the University of Arkansas. The foundation had earlier given $50 million to the university's school of business, which was subsequently renamed the Sam M. Walton School of Business.

Other notable contributions include $39.5 million to the University of the Ozarks, the largest gift to a private institution in Arkansas.

Always interested in education and the arts, Helen Walton was a founding member, organizer and 1992 president of the Arkansas Committee of the National Museum of Women in the Arts in Washington, DC.

She was the leading supporter of The Walton Arts Center in Fayetteville.

She also was the impetus behind a plan to include computer technology in all Bentonville-area school districts. That project resulted in a computer in each classroom and a computer lab in each building.

Sam started a small business in a very small town, Bentonville, Arkansas. His wife and partner, Helen, was his bedrock all the way. She provided not only heart and business acumen, she was the source of many of the humanitarian practices established in the corporate structure as the company grew.

These days Wal-Mart bashing is a popular activity. A strong anti-Wal-Mart movement exists but it wasn’t always that way. Many people in NW Arkansas, throughout the country, and even other parts of the world will remember Helen Walton and her husband, Sam, for the many trails they blazed.

For more information:


Sunday, April 22, 2007

Fayetteville’s Impact Fee Election Results Somewhat Uncertain

When I posted my blog entry April 1 about the upcoming special election on impact fees, I fully expected to post a follow up the day after the April 10 election to state the results. Well, as some of you already know, results are somewhat murky.

The morning after the election the unofficial count was tight, to say the least. Supporters of the fees had a one-vote lead. (Once again, I say, “Don’t ever think your one vote doesn’t matter.)

The major holdup at that point was 15 outstanding absentee ballots. The ballots would be counted if they were received by April 20, the day the election was to be certified.

When the absentee ballots were added to the earlier results, the election was a tie, 2015 votes for and 2015 votes against. Elections have to be won by a majority so the tie means the impact fee increase failed.

As if an election that close isn’t interesting in itself, here’s the really unusual part.

One of the absentee ballots may ultimately be thrown out on technicalities. It seems the overseas voter did not use the same exact address on the application for the ballot as he did on the statement accompanying the ballot.

That particular ballot was a No vote. It was the vote that created the tie. It was included in the final certification.

If that ballot is challenged and subsequently removed from the official count, the election will have been approved by one vote.

Washington County Attorney George Butler is researching the situation but said he expects to find little precedent to resolve the matter.

Because the law is generally against disenfranchising voters, Butler encouraged the Washington County Election Commission to count the ballot in question. Butler stated further that the commission may file an amended certification reversing the election if that becomes necessary.

For more information:


Tuesday, April 17, 2007

General Aviation Airports are Big Business in NW Arkansas

NW Arkansas is lucky to have several excellent general aviation airports. The airports contribute to the economy by providing jobs, paying taxes, and serving many of the businesses located here. They serve not only the owner of a 2-seat propeller airplane but businesses of all sizes.

In fact, Rogers’ and Fayetteville’s general aviation airports are two of the most successful in the state, according to a recent study commissioned by the Arkansas Department of Aeronautics. Their combined annual economic impact is estimated at $128 million including direct factors such as fuel sales and the trickle-down effect of indirect factors such as wages paid to employees who then spend that income locally.

Rogers Municipal Airport at Carter Field is home to Wal-Mart’s corporate fleet, a fact that certainly helps explain why that airport is the most lucrative general aviation airport in the state. (According to information I was given at the Wal-Mart Museum in Bentonville, Wal-Mart ‘s fleet consists of 21-22 jets.)

Fayetteville Municipal Airport, Drake Field, is home to the University of Arkansas at Fayetteville’s jets. Drake Field’s revenue was ranked fourth in the state, generating $34 million, the ADA study found. It’s commonplace there to have people fly in for Razorback games.

In addition to Rogers and Fayetteville, Springdale and Siloam Springs have general aviation airports with thriving charter service. Springdale’s airport includes a complete aircraft maintenance facility and a 300-foot runway expansion is under consideration.

General aviation airports offer expediency and cost savings to corporations both large and small. It’s easy to understand how Wal-Mart would save money by flying several executives to another city and back in the same day.

But the airports also offer savings for smaller corporations in outlying areas such as Siloam Springs. That city is home to Allen Canning and Simmons Foods, corporations that also have the need to move people expeditiously to other facilities throughout the country. “Without these airports, small communities just aren’t as viable,” said Mark Anderson, Allen Canning’s chief pilot. “For us, people would lose a whole day driving. It’s about the utility and efficiency.”

Another major economic factor is the businesses such as support services, aviation industries and airfreight companies that locate on the periphery of airports.

Speed, convenience and privacy of charter jet service are also becoming increasingly attractive to individuals who can afford it. A 2004 survey conducted by the National Business Aviation Association found that two-thirds of charter operations had a significant portion of new business from travelers who had stopped flying on commercial carriers.

The Arkansas Department of Aeronautics recently reported that in the last 10 years the number of general aviation aircraft based in the state has risen from about 2,300 to 2,808. Between 2005 and 2025, the department estimates that the number of general aviation business jets will increase in number from 182 to 531, almost tripling in number in 20 years.

For more information:




Saturday, April 14, 2007

Fayetteville MSA Receives Another #1 Rating

Our best-kept secret has been announced to the world by Bert Sperling of Sperling’s Best Places fame. Sperling has previously researched and written books about a variety of issues such as the best places to raise a family and cities with the lowest crime rates.

This time Sperling looked at quality of life, affordable housing, high percentage of home ownership, low unemployment and fast rate of job growth. He discovered the Fayetteville Metropolitan Statistical Area (MSA) and ranked it number one in the country. (Fayetteville MSA includes Fayetteville, Springdale, Rogers, Bentonville and stretches into extreme southwest Missouri.)

The area boasts five-year-job growth of 26.1% and a low unemployment rate of 3.5%. In addition to the headquarters for Wal-Mart, Tyson and J.B. Hunt Trucking, many other Fortune 500 companies have offices here.

Living costs are low. According to the book, the median home price in the Fayetteville-Springdale-Rogers area averages $212,300 for a 3-4 bedroom home with approximately 2,000 sq. ft. of living area.

We have the University of Arkansas-Fayetteville with all their sports and cultural activities, several museums plus a world-class museum scheduled to open in 2009, a large performing arts center, excellent medical facilities, and our own regional airport with non-stop service to Chicago, Houston, Detroit, Minneapolis and additional cities.

Add all that to the clean air and natural beauty of the Ozarks, many lakes including Beaver Lake with its 449 miles of shoreline, and a very livable four-season climate and you can easily understand why Sperling found this area so attractive.

For the past several years, some 1000-1100 people have been moving here each month. I guess Bert Sperling isn’t the only person to recognize a good thing when he sees it.

For more information:


Sunday, April 08, 2007

Affordable Housing May Still be Possible in NW Arkansas

Good news! Builders and cities are beginning to realize that the majority of people cannot afford a mansion to house their families.

I have maintained for considerable time now that there is a shortage of affordable homes. Land prices have increased dramatically while wages have not kept pace.

When builders have to pay more for land they generally build a more expensive home in order to recoup the cost. Fancy bathrooms, gigantic master bedrooms, granite counter tops, top-of-the-line appliances, and 3-car garages are all very nice – but not affordable for the average wage earner.

Three bedrooms, 2 baths, ceramic tile in the wet areas, and 1,000–1,200 square feet are perfectly serviceable homes for many people. These “starter homes” are more important now than ever before.

When homebuyers are forced farther away from the major municipalities to find a home on lower cost land, their cost of commuting to work increases. At the same time, infrastructure is strained and traffic congestion increases.

Now, I’m happy to say, some builders and cities are cooperating in an effort to create affordable housing. Homes can be built with smaller set backs and less space between homes.

One builder is planning to build 1,000 square foot homes in Rogers with an expected sales price of about $110,000.

Building on empty land where the infrastructure is already in place is another way to lower the overall cost of the home. This is called “in-filling” and helps reduce urban sprawl.

Each year NW Arkansas homebuilders showcase their homes in the Parade of Homes. The parade has traditionally featured homes for the more affluent buyer. This year, some builders may highlight less affordable homes, a trend I hope will continue.

The Parade of Homes is open to the public and will take place the weekend of June 22-24.

For more information:



Sunday, April 01, 2007

Impact Fees – How Much is Too Much?

Less than one year ago Fayetteville voters approved a ¼ of 1% sales tax increase to pay for $65.9 million in bonds for street improvement projects.

Now Fayetteville residents are being asked to vote at a special election April 10th on the question of whether to impose an impact fee on builders to provide additional funds to improve roads.

If the impact fee passes, the additional amounts charged builders will vary from $2,363 for a single family detached home, to $1,319 per room for a hotel/motel, and on up to $2,701 per 1,000 square feet of commercial or office space.

As usual, there is more than one point of view when looking at this problem.

Does it make sense that the builder should be charged for the infrastructure that his project would necessitate? It’s easy to say “Yes, that sounds logical.” But look a little deeper into the problem and you’ll see it is the buyer or renter that will ultimately pay the fee. Homes will cost more and rents will rise.

I’ve written previously about the lack of affordable housing in NW Arkansas as a whole and Fayetteville in particular. Adding another $2,363 to the cost of each home only makes homes less affordable.

Another issue is whether increasing the impact fees already in effect will deter businesses from locating in Fayetteville. That issue, too, can be argued two ways. Some say that businesses seeking to expand or move to Fayetteville will look at other areas where fees are lower or nonexistent, and this has already happened.

If businesses locate elsewhere, Fayetteville’s sales tax receipts will decrease accordingly. Keep in mind that sales tax is a principal source of revenue for city capital improvement and schools. There has already been a decrease in sales tax revenues in the last quarter of 2006.

Others say look at Bentonville. The impact fee for a single home in that city is $4,750 and the city is growing at a major pace.

The new impact fee will make Fayetteville’s the highest in NW Arkansas at $4,897. Springdale has no impact fees and has completed major improvements on their artery streets, as well as neighborhood streets, by sales taxes voted by residents and by bond issues. Rogers charges a $2600 “sewer and water hook-up” fee, which some call a disguised impact fee and which has been challenged in court.

However, the bottom line here is that developers in Fayetteville already pay impact fees for new-construction, which are passed on to the consumers of these homes. Developers also are required to install (at their own expense) new roads and other infrastructure items, such as water lines, sewer lines, etc. An additional road impact fee will basically be another tax, not just on developers and builders of new areas but on everyone who lives in Fayetteville. It’s a case of double taxation, despite what those in favor of the measure say. And it puts the burden of street improvements for older areas of Fayetteville on the developers of new areas. Is that fair?

Ultimately, money for additional (and much needed) street improvements will have to come from somewhere. If taxes need to be increased, so be it—let the voters decide as they have in the past. But let’s be honest.

I have a great concern that Election Day is just around the corner, and I don’t believe the majority of voters have taken an interest in the matter at hand. I encourage everyone to become informed and vote his or her conscience. I personally am going to vote NO.

Here are some links for further information: