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?”

http://www.arkansasnews.com/archive/2007/12/05/News/344272.html