Fayetteville Arkansas, University of Arkansas--Old Main Overview

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

Monday, December 22, 2008

Demand Down, Rent Prices Down, New Buildings Going Up in Fayetteville

Construction projects underway in Fayetteville, Arkansas, will add nearly 1500 rental units in the near future. That’s a rather astonishing number for a city the size of Fayetteville.

Demand for apartments in NW Arkansas has already softened and that creates pressure to lower prices. The vacancy rate is just under 10% in Fayetteville. Rogers and Springdale have vacancy rates of 10%-15%, depending on the size of the apartment.

And the new units haven’t even come on board yet.

Consumers are understandably happy when prices drop but property owners have a tough time holding their heads above water when vacancy rates increase. Added pressure is coming from homeowners who decide to rent rather than sell their homes while they wait for the market to rebound.

So, at first glance, the situation seems contradictory. But, we need to remember several factors affecting NW Arkansas in general and Fayetteville in particular.

While most of the country is suffering through a recession, NW Arkansas continues to see new people move here. Job growth is positive here. As new people arrive and go to work, they rent apartments and buy homes. Gradually (though slower than in recent years) the excess inventory of homes is shrinking.

The other thing to remember is Fayetteville is home to the University of Arkansas with its thousands and thousands of students and faculty, all of whom need places to live. I haven’t seen any recent studies of the effect of “trickle down economics” from the university’s presence but believe me when I say it is huge by anyone’s standards.

Nevertheless, for potential investors, I don’t recommend purchasing for the University market right now. The conventional wisdom says that rental properties in university towns are a good investment.

But in addition to all of the new apartments being built, there is also another factor to consider. The U of A just built 2 new dormitories in the past few years, which are absorbing a lot of upper classmen who might normally want to live off campus. The result is that many of the normal rentals near the University stand vacant.

On the other hand, for parents who want to purchase a condo or other unit for their student son or daughter to live in for the next few years, it’s a great time to purchase. Prices are down and there are a lot of properties to choose from. By the time you want to sell, the situation will have probably changed.

For other towns in NW Arkansas, there is more of a "normal" rental market, geared toward families, young professionals, and others. In that segment of the market for investors, there are some phenomenal deals, especially on foreclosed multi-family dwellings.

Of course, I don’t have my crystal ball handy, but keep in mind that real estate is cyclical. It IS a great time to buy….

For more information:


Thursday, December 18, 2008

Real Estate Trends Report

There’s a very smart guy out there named Stefan Swanepoel who writes something called the Real Estate Trends Report each year. Recently he posted on Active Rain (a social networking site for realtors) what he felt were the 10 most important events that affected real estate during 2008. He gave me and others permission to reproduce these as long as we credit him and the 2009 Swanepoel Real Estate Trends Report. For more information on how to obtain the full report, click on the following link: www.retrends.com

In any case, he feels that the top 10 events that affected real estate during 2008 were:

1. The Bailout: September 17th

Depending upon how effectively the Emergency Economic Stabilization Act's $700 billion is going to be allocated and managed it may prove to be the beginning of the turning point in the current economic recession.

2. The Presidential Election

In one of the most competitive, contentious, divisive and yet historic political campaigns the country responded with the largest voter turnout in history to remove the incumbent president and elect an African American, Barak Obama as president. But he takes office at a difficult time for the US economy and has some serious challenges ahead.

3. In Memory Of: Countrywide, IndyMac, WAMU, Wachovia And Others

Barely one year ago in 2007 these companies were not only household names but were considered financial giants. In one short year they have become a factoid of history.

4. Facing Foreclosure Frenzy

As a direct fallout of the subprime collapse, the foreclosure rate in the U.S. hit staggering levels in 2008. At the opening of the third quarter foreclosures were up 25% over the previous October with a reported one in every 452 of the country's homes in foreclosure. RealtyTrac reported last October that there was a sharp decline in foreclosure filings but it still estimated that by the end of 2008 there would be more than one million REOs on the books.

5. Home Prices Spiral Downward

The recession devastated many real estate markets across the country with the worst-performing towns and cities in places like central California, Miami and Las Vegas posting declines of 40% in 2008. The stranglehold on financing continued to drive home prices in many other places back to 2000 - 2002 levels, with predictions of continued declines in 2009 as unemployment reaches record highs and the financial meltdown spills over to other industries.

6. NAR - DOJ Settlement

Finally the long and protracted 2½ year legal battle between NAR and the Department of Justice (DOJ) was put to rest as Judge Kennelly issued his final judgment in November. In the end, NAR's longstanding Internet Data Exchange (IDX) policy was validated as NAR was deemed to have not admitted any liability or wrongdoing and no payments were made in conjunction with the settlement. In addition, NAR has been cleared to reinstate an updated version of its Virtual Office Website (VOW) and the MLS has been preserved and strengthened in the process. Now it's back to business.

7. Brokers Go Bust

Changing names, merging, consolidating, filing bankruptcy and closing branches was on the order of the day throughout 2008 as literally thousands of real estate brokerages companies went out of business during 2008. This included many independents as well as franchises from just about every major brand including Century 21, EXIT and RE/MAX. Also filling for bankruptcy is national franchise Help-U-Sell and Web 2.0 newcomers such as Igglo. 2009 may see even more brokers closing up shop than 2008.

8. Keeping It Short

Founded in 2006, Twitter moved into the mainstream this year as the next evolution in the social networking and micro-blogging environment. By using short text-based posts (affectionately named "tweets"), staying in touch has been given a whole new meaning.

9. ActiveRain Explodes Past 100,000 Members

As we discussed in last year's report (Trend #1 - Two Worlds; One Industry) ActiveRain has moved to the head of the social networking line in the real estate industry. With as many as 35,000 users logged on at the same time, no one else has even come close to reaching that many Realtors® at one time. It goes without saying that ActiveRain has proven that social networking has made a home in real estate.

10. NAR Celebrates 100 Years

In May 1908, 120 men gathered in Chicago with the goal to "unite the real estate men of America." Today the National Association of REALTORS® (NAR) is America's largest trade association representing more than 1.2 million members. For 100 years, NAR and its members have established homeownership as a cornerstone of the American Dream and advocated private property rights as one of the fundamental principles that unite us as Americans. 2008 marked NAR's centennial birthday.

How many of these events impacted you or were/are you aware of? This is the question Swanepoel asks. For realtors, all should be able to answer this question. For the general public, probably most people were unaware of a number of these items.

For more information:


Wednesday, November 19, 2008

3rd Quarter Skyline Report

Last Friday was the Fayetteville breakfast sponsored by Arvest Bank to release the 3rd quarter Skyline report for Washington County and Northwest Arkansas. As usual Kathy Deck, director of the U of A Center for Business and Economic Research, presented the highlights of the report, but also present was Tim Yeager, professor of finance at the Sam Walton College of Business, to talk about the $700 billion “bailout” which has received much attention in the national media.

Of interest to me was his take on the Secretary of the Treasury’s redirection of funds in the TARP (Troubled Asset Relief Program—which is the official name of the bill that Congress passed) from purchasing bad assets to a capital purchase plan. Yeager is in favor of the new plan, which he says is a better use of the funds.

The original plan to purchase bad assets was a bad situation because of the difficulty of pricing the assets, according to Yeager. If the assets were priced at the current deflated values, this would represent a permanent loss on those assets. The other alternative is to wait until the assets have appreciated again.

The new plan is to purchase preferred shares of healthy banks as well as large sick banks. There would be a dividend of 5% in the first 5 years.

Yeager also presented a suggestion that Congress should prepare a new fiscal stimulus plan—“just in case.” We don’t need it now, but if such legislation were in place for the future, it would be better for assuring the financial stability of the US economic system.

Kathy Deck prefaced her remarks about the housing market in NW Arkansas with some observations about the economy. Of importance in this regard is the fact that the unemployment rate here is 4% compared to the 6.5% national employment rate. Employment opportunities are what fuel growth to the area and thus housing growth.

Employment growth here did flatten in 2006. Thus new job creation is not terrific compared with years past (e.g. 6% employment growth at the peak in July if 2005), but in comparison to the negative employment growth in the rest of the country, we’re doing OK. Current job growth in NW Arkansas is about 1% whereas jobs are being lost in the rest of the country.

I’m not much interested in commercial real estate, so I’ll focus on what’s happening in the residential and multifamily sectors.

For multifamily, the vacancy rates for 1 and 2 bedroom apartments is still very high, over 10% for the 3rd quarter of this year. The actual rate was 12.2%, the same as the rate for the 3rd quarter of 2007. According to Deck, a healthy vacancy rate is 5% or less. The rates vary by town with Bentonville the highest with a 15.7% aggregate vacancy rate (down from 17.4% in the 2nd quarter). The rate for Fayetteville was 10.9% in the 3rd quarter, and that for Springdale was 11.6%. Rogers had a decrease to 14.1%, and the lowest aggregate vacancy rate for the 3rd quarter was in Siloam Springs—10.2%.

For residential real estate the Skyline Report primarily looks at new construction. The Center for Business and Economic Research consults with planning departments of NW Arkansas communities to determine new subdivisions which have been approved and building permits which have been issued. They obtain plats and send out students to determine what’s happening on each lot in the active subdivisions. An “active” subdivision is one where construction is currently occurring or has occurred during the past year.

They classify each lot into one of 5 categories: vacant (nothing going on), housing start (slab or foundation), under construction, complete but unoccupied, and occupied.

In both Washington and Benton Counties, the number of lots in active subdivisions has increased, but the number of homes under construction has decreased. In Benton County in Q3 of 2006, there were 12,454 lots, in Q3 of 2007 there were 16,313 lots, and in Q3 of 2008 there were 16,684 lots. In Washington County, there were 8337 lots in Q3 of 2006. In Q3 of 2007 there were 10,450 lots and in Q3 of 2008 there were 10,920 lots in active subdivisions.

There were approximately 100 homes under construction in Fayetteville in Q3, and approximately 240 complete but unoccupied homes. In Springdale there were approximately 50 homes under construction and about 120 complete but unoccupied homes. The absorption rate has been down from past quarters. This means that fewer homes are being sold.

Altogether current inventory of new homes was up in all towns of NW Arkansas with 55.8 months inventory for the 3rd quarter. What this means is that at the current rate of sales, it will take 55.8 months to sell all of the new homes on the market (almost 6 years), assuming that no additional homes are built. This does not take into account existing homes which are also on the market.

One factor of importance is the existence of a lot of foreclosure properties, which are causing a continuing downward pressure on prices. According to Deck, there are 747 bank-owned properties in Benton County, up from 502 six months ago. In Washington County there are 475 bank-owned properties up from 276 six months ago.

Altogether the price of homes sold has continued to decrease in Washington County, but in Benton County, prices have shown less inclination to decline. In Benton County in the 3rd quarter of 2008 the average sales price of existing homes declined by 1.6% and in Washington County by 4.1%.

Of more concern is the fact that from May 16, 2008 to August 15, 2008, there were 1662 existing homes sold in Benton and Washington Counties. This is a decline of 17.5% from the same time period last year.

From my point of view this is a great time to purchase a home. Prices have declined significantly and there are a lot of homes on the market, both new and resale. There are a lot of great deals now.

And for those folks who are waiting for the bottom of the market, we won’t really know when the bottom occurs until after it happens. And then prices will be on their way up again.

The important factor is that real estate investment is not like the stock market. Real estate is a long term investment, not short term. If you want to purchase a home now, plan on holding it at least 5 years to realize any appreciation. So if the market goes down a little more—bottom line is that it doesn’t matter. By the time 5 years have passed, prices will be on the way up again. Real estate is cyclical.

Thursday, November 13, 2008

PSST – Have I got a Cave for You!

I recently heard about caves for sale in the beautiful Ozark Mountains of NW Arkansas. Might just be the answer to someone’s idea of solitude in a unique setting complete with stalactites and stalagmites. Temperatures hold steady at 59 degrees Fahrenheit year round.

There are stairs leading into two caves and electricity is already in place! I don’t think there is indoor plumbing, though.

If that’s not enough to interest you, you might want to consider the gift shop building and 29 acres of land included in the offer.

The site is called Mystic Caverns, located just a few miles south of Harrison, Arkansas (not very far from Branson, Missouri).

The asking price has been reduced from $1.2 million to $899,000.

For more information:

Ebay auction at http://tinyurl.com/6lpwvg

Mystic Caverns website:

Recession or Depression – Which is it?

Recessions and depressions have been a fact of life since before statistics were kept. And, unfortunately, the United States is currently in one or the other.

A recession is defined by the National Bureau of Economic Research as a "A significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."

If a recession continues long enough, it becomes a depression.

Either term is bad news for everyone: individuals, businesses, and government at all levels. The U.S. and many of the industrialized nations of the world are suffering. Unemployment is high, food prices are high, oil prices are high (though lower than a few weeks ago), and inflation is high. Retail sales are at such low levels they have caused another severe drop in the stock market. All this means pessimism and worry are high.

All told, stock markets have suffered unthinkable losses. The misery is widespread - U.S. to Europe and Iceland to Australia.

Our economy is largely based on the availability of easily obtained credit – and access to credit is practically non-existent at the present time. Manufacturers are suffering major problems in financing purchases and payrolls. Sales of homes are stagnant because individuals are finding it difficult to get mortgages. Automobile and retail sales have fallen flat because it’s tough to get a loan.

Now the federal government has stepped in to actually take partial ownership in several of the nation’s largest banks. The initial investment is $125 billion and it is supposed to stimulate interbank lending and revive the stagnant credit markets. If and how the plan will work remains to be seen.

We are in uncertain times. Some of the brightest and most experienced minds are working on all aspects of the mess we’re in. Let’s hope they find a way out soon.

But, history shows we will get through this and once again see the economy on an upward swing.

You might find it interesting to read a Wikipedia article I came across that includes a concise list of past U.S. recessions, their causes and duration:


Wednesday, November 05, 2008

Presidential Elections and the NW Arkansas Real Estate Market

Normally I try not to get political, but yesterday was election day and it appears that Barack Obama will be our new president starting at the end of January. It was a hard-fought campaign.

His comments last evening about hope and trying to solve the current economic dilemma of this country were very encouraging. And John McCain's speech also referred to the necessity of all of us to work together to solve the dire situation that this country confronts.

In NW Arkansas we are kind of lucky. We have some major corporations with home offices here, and when times are tough, Walmart does well. At a time when (in the nation as a whole) jobs are being lost, there are still jobs being created in NW Arkansas, although not at the accelerated pace of the past few years. And jobs bring people to our area (also those great "best places to live" articles in major magazines).

There are homes being sold here, and the real estate market is not as dire as in other parts of the country. It's actually a great time to purchase a home--lots of great values available. But if you are a seller, you need to realize that it IS a buyer's market, and there are still many homes on the market. If you are lucky enough to actually get an offer on your home, it will probably be much less than what you were hoping for--work with it. And if you have an older home, you need to be very aggressive about pricing (i.e. update it as much as possible and/or price it much lower than you ever thought you should). Prices have come down, there are lots of foreclosures on the market, and an older home is competing with new homes, which (in many cases) are being sold at cost.

My recommendation is that if you don't need to sell right now, don't. Rent your home or hang in there until the market turns around, which it will eventually. I don't have my crystal ball handy, but I'm thinking at least wait until next year. If you purchased your home at the peak of the market, you may have to wait longer to sell without losing money.

In any case, we're finally past the election campaign, and perhaps the new spirit of optimism will help the market improve and will spur the economy. Let's hope so.

Tuesday, October 21, 2008

The Jones Center for Families Hosts Fall Festival

The Jones Center for Families in Springdale, Arkansas is an absolute gem! Remember the old saying, “You get what you pay for?” Well, the Jones Center proves the saying wrong.

The Center welcomes everyone from NW Arkansas and the surrounding areas. Residency is not a requirement. Neither is money a requirement. There is only one requirement - all visitors must behave as ladies and gentlemen.

Virtually everything is FREE.

The Center offers an unbelievable array of activities for individuals and families. Just imagine participating at no charge in:

- Ice skating on a regulation size rink (skates provided).
- Swimming or exercising in two pools.
- Programs for all ages up to and including seniors.
- Day care while a parent is using the center.
- Fitness center containing stationary weight and cardiovascular equipment.
- 300-seat chapel for weddings, receptions, showers, etc.
- Family movies.
- A one-mile walking trail.
- Nine-hole disc golf course.
- Playground accessible to all, including handicapped.
- 30 computers including Internet access.
- More than 25 meeting rooms of all sizes for birthday parties and celebrations or non-profit business groups.

As if all that were not enough, the Jones Center also hosts activities throughout the year such as the Fall Festival coming up next Saturday, October 26. At least 8,000 children and parents arrive annually for fun, music, entertainment, physical activities, arts and crafts, and food – at no cost.

There are also special programs to keep kids busy during spring and winter breaks. During the summer months, free concerts are held on the lawn.

You can also take advantage of various educational opportunities, such smoking cessation, safe baby-sitting instruction, and preparing your child to succeed.

The Jones Center for Families has been an important part of NW Arkansas since its inception in 1996. I really cannot paint a complete picture in this short space of everything it offers to the public. Seeing is believing - and I encourage you to do just that.

The Jones Center has always shone like a beacon. If you haven’t been there yet, check it out! In these tough economic times, it might be just what you and your family are looking for.

For more information:


Friday, October 17, 2008

Chili Cook-off Benefit for Fayetteville Meals on Wheels

On Monday, October 20 (next Monday evening) between 6:00 and 8:00 p.m. the 4th Annual Keller Williams Chili Cook-off will occur at the Keller Williams offices at 2418 E. Joyce Blvd. Proceeds will go to benefit the Fayetteville Meals on Wheels Program. Almost 20 cooks will be competing, so whether you like your chili hot and spicy or mild or somewhere between, there should be something for everyone’s taste. Adult tickets are $5.00 and kids are $2.00. All you can eat with all of the fixings. Hope to see you there.


A couple of interesting tidbits for those who might have deep pockets, despite the ailing economy, and have special needs or interests.

Britney Spears’ home is on the market for a mere $7.9M. Click the following link for pictures and information.


And for those old enough to remember Roy Rogers, his ranch has been renovated and updated and is now on the market. No price given, but if you click on the following link you can get more detailed information.


Tuesday, October 14, 2008

Bella Vista, Arkansas – In Top 10 Healthy Places to Retire

U.S. News and World Report editors have selected beautiful Bella Vista, Arkansas as one of the top 10 healthy places to retire.

Not long ago Bella Vista was a quiet little village nestled in the rolling hills of the Ozarks, just south of Missouri. Now it has grown up and become a city of more than 24,000 people with more arriving each year.

And why not? Add recreational facilities, lakes, golf, tennis, swimming and much more to natural beauty and clean air and the result is Bella Vista.

Homes are very affordable by anyone’s standards and neighborhoods are well maintained. If you are looking for your own piece of the good life, take a look at Bella Vista.

For more information:


Search for homes:


Saturday, October 04, 2008

Property Taxes are Due

Just a quick reminder that the deadline to pay property taxes is October 10.

Many home owners pay their taxes as part of their monthly mortgage payment. The annual tax is divided into 12 and the homeowner pays 1/12 each month. When tax bills are sent out in the spring, the bank pays the property tax. If this is your situation, you can relax since your 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. And don’t forget those pesky personal property taxes on cars, trucks, boats, etc. Those taxes are also due now, if you didn't already pay them when you got your bill last spring.

There was an option to pay taxes in three payments so if you took advantage of that, don’t forget the third and final payment is due October 10.

Late payments incur an automatic 10% penalty plus interest.

In addition to paying in person or mailing a check, Washington County offers an ePayment Service. You can pay with a Visa, MasterCard or Discover credit card and the funds will be electronically deducted from your checking account. The important thing to note if using this service is a processing fee will also be deducted. The county website states, “Because we are a governmental entity, all costs associated with the convenience of credit card usage and bank account transfers cannot be deducted from your tax amount due.”

As best I could determine, Benton County does not offer an ePayment Service but you can pay over the telephone, in person, or snail-mail.

The web addresses for Washington and Benton counties are:


Sunday, September 21, 2008

Foreclosures in NW Arkansas

In an effort to bring you current information regarding foreclosures in Benton and Washington Counties, I’ve read enough statistics to make my head spin. I think it all comes down to the old saying, “everything is relative.”

Overall, the Arkansas foreclosure rate ranks right about in the middle. There are 26 states with higher foreclosures rates. The national average is one foreclosure for every 416 homes but the Arkansas rate is ‘only’ one for every 1099 homes.

Four states make everything else look good. Nevada is #1, California #2, Arizona #3, and Florida #4. It’s hard to imagine that 1 in every 91 homes in Nevada has received a foreclosure notice!

In Benton and Washington Counties, the July 2008 rate was closer to the national average - Benton County one for every 418 homes; Washington County – one for every 404 homes.

Arvest Bank took an innovative step to sell approximately 170 properties it had foreclosed on by holding one big auction in early August. Reserves were placed on all but five properties, meaning the bank would have final decision on whether to accept the offer. Arvest has not disclosed final results but in some cases potential buyers and the bank will have an opportunity to renegotiate terms.

Overall, I think it was both a bold move and a good idea. Nothing of that size has been done previously in NW Arkansas or perhaps all of Arkansas. Banks have become saddled with property they never wanted to own and they need to get them off their books.

Foreclosed properties drive down the price of surrounding homes. The sooner they are all sold, the sooner the market can begin to normalize.

For more information:







Saturday, September 13, 2008

Bikes, Blues and BBQ in Fayetteville, Arkansas

It’s that time of year again. Time when a few hundred thousand people will descend on Fayetteville for the 9th Annual Bikes, Blues and BBQ Motorcycle Rally September 24-27.

BB & BBQ bills itself as the largest charitable bike rally in the United States! Last year more than $100,000 was donated to local charities. The rally is self-funded and does not receive any government funding.

BB & BBQ is fun for the whole family. There are the bikes, of course, which are always a sight to see. Entertainment is on various stages afternoons and evenings - much of it free. Plus you won’t want to miss an opportunity to taste some serious cooking during the barbecue cook off competition.

The raffle items this year include a Harley-Davidson Rocker C motorcycle.

Fayetteville Firefighters Association will again host the Poker Run which last year raised almost $9,000 for charity.

Y’all come!

For more information:


Monday, September 08, 2008

No Matter How You Look at it, NW Arkansas is a Great Place to Live!

As the days start getting a little cooler and we move into fall, one of my favorite times of year,
I thought I’d mention that NW Arkansas has been selected yet again as being in the top-ten best places to live, raise a family, work, and retire. Kiplinger Magazine recently published two articles highlighting Fayetteville and the surrounding area.

Of course, Kiplinger isn’t the only authority on the subject. U.S. News & World Report, Sperling’s Best Places, Forbes and others have all placed NW Arkansas in the top ten of their recent surveys. My family and I moved here 15 years ago and we continue to be glad we did.

NW Arkansas has a great reputation, and rightfully so.

Housing is very affordable. Cost of living is low compared to most places. On a scale where 100 is considered ‘average’ for the country, NW Arkansas comes in at a very respectable 90.

Air is clear and clean. The natural beauty of the Ozarks is everywhere. There’s a big push to go ‘green.’ The area is attracting businesses and industries that are not only non-polluting but that also are in the sustainability business. (Think consulting, water purification, packaging, electronics and lighting.)

The climate is moderate during all four seasons. Springtime is gorgeous with flowering dogwoods and redbuds everywhere. Summer is not bad by most standards. As I write this (in mid-August) my windows are open and a gentle breeze is coming in. Autumn is more beautiful here than outsiders imagine. Gold and red leaves color the rolling hillsides, some years more spectacular than others. Winters are generally mild - some snow that usually doesn’t hang around more than a few days. I grew up in northern Minnesota where temperatures of minus 30 degrees are common so I think it’s positively balmy here. I have friends who moved here in 2004 and they have yet to pick up a snow shovel. Of course there are days in summer that I wish were cooler and winter days I wish were warmer, but I’ve said that no matter where I lived.)

Even in these tough times, the economy continues to expand. Unemployment is low, falling one half a percentage point to 4.5% in Arkansas for July 2008. That’s the lowest level since April 2001, according to the U. S. Bureau of Labor Statistics.

Health care availability is excellent and quality is high.

People are friendly and polite.

The University of Arkansas in Fayetteville offers all types of sporting events and free classes to people over age 65.

Sports and recreational activities abound. There’s Beaver Lake with more than 400 miles of shoreline for swimming, boating, and fishing. There are festivals such as Bikes, Blues and BBQ, farmers’ markets, world-class golf, polo, minor-league baseball and many more activities every weekend.

Broadway shows and major stars appear regularly at the Walton Arts Center in Fayetteville.

But mainly it’s the beauty of the Ozarks coupled with affordable housing that makes NW Arkansas so appealing.

Prices have come down in the past year making housing even more affordable. At the present time, you can buy a brand new 3 bedroom, 2 bath, brick home for less than $150,000. There are previously owned homes for less. Just about anything you’ve dreamed about is available at great prices.

Go to my website http://www.judyluna.com/ and click on “Search for Homes” to do your own search. As always, if I can be of help, don’t hesitate to call me at (479) 966-0435.

Two notes worth mentioning:
The Chamber of Commerce did not ask me to write this article !
The population figure of 419,455 mentioned at http://www.kiplinger.com/features/archives/2008/05/2008-best-cities-fayetteville.html includes all of Washington, Benton, and Carroll counties in NW Arkansas plus McDonald County in SW Missouri. The actual population of the City of Fayetteville is approximately 68,000.

For more information:


http://www.kiplinger.com/features/archives/2008/07/real-estate-prices-in-our-best-cities-2008.html?kipad_id=47 (where you can compare housing costs in different price ranges)



Saturday, August 30, 2008

First Time Homebuyer Tax Credit Explained

There has been so much talk about the recently enacted “Housing and Economic Recovery Act of 2008” and its numerous, complicated provisions that I thought I’d take a few moments to summarize the part you are probably most interested in – the First Time Homebuyer Tax Credit.

You are considered a first-time homebuyer if you have not had any ownership interest in a home in the 3-year period preceding date of purchase.

Closing date of the home must be between April 9, 2008 and June 30, 2009.

The tax credit is 10% of the purchase price up to a maximum credit of $7,500.

A single person with income up to $75,000 qualifies for the full credit. Income between $75,000 and $95,000 qualifies for a prorated portion of the $7,500 credit.

Married couples with income up to $150,000 qualify for the full credit. Income between $150,000 and $170,000 qualifies for a prorated portion of the $7,500 credit.

The credit will be applied against income tax liability. When the tax return is compiled in the usual manner, the credit would be used to lower tax liability dollar for dollar. For example, if total tax liability was $9,000, the credit would reduce the liability to $1,500. This has nothing to do with how much withholding you may have already paid. If your tax liability was $9,000 and you had already paid in $9,000 through withholding, you would receive a check for $7,500.

If total tax liability was $1,000, and you had not paid any withholding, the excess credit of $6,500 would be refunded to the taxpayer.

There are no provisions to get the credit before filing the income tax return in 2009. However, a homebuyer who qualifies for the credit could immediately reduce his withholding at his place of employment (or reduce estimated payments to IRS).

But there is a catch. It’s not “free money.”

The credit has been referred to as an interest-free loan, and with good reason. The credit must actually be repaid at the rate of 6.67% ($502.50) per year for 15 years, beginning with the filing of the 2010 tax return in spring of 2011. No interest will be charged. Let’s say a taxpayer was due a refund of $1,000 on his 2010 return. His refund would be reduced to $497.50 after repaying $502.50).

If the home was sold at a profit before the 15-year payback period ended, the unpaid balance would be deducted from the profit before the proceeds were paid to the seller. If the home was sold at a loss, the balance of the payback would be forgiven.

If the taxpayer dies before paying back all the credit, the unpaid balance would be forgiven.

IMPORTANT NOTE: This is my interpretation of the basic provisions of the Homebuyer Tax Credit. I have tried to simplify things to give a picture of what is now available but I give no guarantees. There are many complicated provisions I haven’t touched upon. As with most new laws, many details will need to be worked out, defined, and applied. You should check with your tax preparer for further provisions of the law.

And whether it’s worth it for you to apply for the credit will depend on your personal financial situation. If you need money to tide you over these tough economic times, it may be worth your while. Just keep in mind that you do have to pay it back in future years.

For more information:


Saturday, August 23, 2008

It’s Back to Square 1 for Fayetteville High School

University of Arkansas has withdrawn its offer to purchase the Fayetteville High School. High school officials were taken off guard and were extremely surprised by the move.

The final version of $50 million offer would probably have contained some provisions for the school district to lease back the property while waiting for a new high school to be built. Now, all that is off the table and the district is back to square one.

It’s been a long, convoluted process to get back to the starting point. Space and time do not permit much detail here, but a brief summary will help:

· After lengthy deliberations, extensive research, committee meetings, and input from the public, Fayetteville School Board decided to have one high school grades 9-12.

· A new high school should be built as opposed to remodeling the existing school.

The best location would be the “Morningside” property in south Fayetteville.

The current 40-acre high school campus would be offered to University of Arkansas for $59 million, a sum that fell between independent appraisals conducted by both entities. Deadline for response to the offer was July 1, 2008.

U of A countered on June 6 with its offer of $50 million. The offer did not contain a deadline.

A group of independent investors stepped forward to request a 60-day option on the property. If granted, the option would preclude any other sale during that time. If the investors decided to buy the property, they would pay $60 million.

The school district took no action on the option offer. Subsequently, the investors withdrew their request.

On August 21, citing a decision to not leave the offer in limbo any longer, U of A officials withdrew their $50 million offer to purchase the existing campus.

It’s possible the U of A may reconsider purchasing the property at some point in the future.

Stay tuned for the next move.

For more information:





Wednesday, August 06, 2008

Benton County Property Appraisals - The Saga Continues

Don’t lose this phone number: 479-271-1037. If you can get through the busy signals, it will connect you to the Benton County Assessor’s office where you can make an appointment to meet with the Equalization Board if you feel your property has been assessed too high.

Property owners who are unable to get through to the Assessor's may stop by the office in the Benton County Administration Building, fax a letter of request to (479 ) 271-1073 or mail a letter to the attention of Cathy Lee, scheduler for the Equalization Board, 215 E. Central Ave., Bentonville, AR 72712.

All letters requesting an appointment with the board should include the property owner's name, address, phone number and parcel number. If residents chose to mail a letter requesting a meeting, they should send the letter via certified mail.

Keep in mind you must contact the assessor’s office before August 20. The board will meet from August 1 to October 1 to hear why you believe your property value is incorrect. Bring along some evidence such as an independent appraisal of the property or a new mortgage on the property.

The board can adjust the property values for three reasons:
--The assessment is unfair compared with other lands of the same kind, similarly situated.
--It is appraised higher than neighboring properties with the same uses, size, materials and conditions.
--The assessment is clearly erroneous.
--The assessment is manifestly excessive.

On the one hand, we can’t point too hard at the assessor’s office for the high numbers. Assessments must be done every third year but it takes time to assess all the parcels. People must go out and physically inspect the properties. Things were still flying high during much of 2007 when the appraisals were being conducted. It was late 2007 and into 2008 when things started spiraling downhill.

On the other hand, however, I was distressed to read that when one property value has been readjusted, all similarly situated property should automatically be re-examined and that part of the law has been ignored.

Many Benton County residents have become galvanized to fight the increased appraisals. On Monday night the NW Arkansas Property Rights Association hosted a town meeting to inform residents of their rights and to help them get some answers. Present at the meeting were County Assessor Bill Moutray; Sen. Kim Hendren, R-Gravette; Larry Kelly, a local real-estate agent; Benton County Appraiser Charles Hudson Jr.; and Benton County Clerk Mary Lou Slinkard.

Now that property owner’s concerns are being brought to the forefront, Benton County officials will hopefully be taking a more proactive approach to protecting owner’s rights.

For more information:

My blog postings dated July 12 and July 29 - http://nwarealestateblog.blogspot.com/


Monday, July 28, 2008

Market Report for June 2008, Northwest Arkansas Real Estate

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.)


June 2008
78 $197,950 147 20.18

June 2007
87 $196,000 140 11.70


June 2008
109 $168,500 140 14.96

June 2007
135 $178,500 117 10.97


June 2008
84 $166,500 167 18.01

June 2007
125 $178,500 157 13.64


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:


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




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:



Friday, July 04, 2008

Happy Fourth of July

Hope your July 4th holiday is a pleasant and safe one. Enjoy the long weekend.

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:


Sunday, June 22, 2008

Now is a Great Time to Purchase a Home in NW Arkansas

It is a great time to purchase a home in NW Arkansas and here’s why:

The median home price in Northwest Arkansas is approximately $155,000 and there are well over 1,000 homes for sale for less than that. New homes, resale homes, condos, country settings, subdivisions close to work, and everything in between are available.

Prices have come down but may not come down much more. No one can accurately predict when prices will hit bottom and begin to climb upward again.

Interest rates are extremely low -- 6% or below for fixed-rate 30-year mortgages. Rates on 15-year mortgages are even lower.

Interest rates and sales prices of homes do not go up and down together so waiting to see if home prices will go lower could cost you more in the long run. For example, say you waited for the purchase price of a home to drop $10,000 but interest rates moved up by as little as one half of one point during this period. You would end up losing money because of the higher monthly mortgage payment you would be making over the life of the loan.

Rent payments can change substantially from year-to-year but a fixed-rate mortgage offers unbeatable stability.

A wide range of financing options is available for consumers in all price ranges. Lenders have plenty of money to loan to credit worthy homebuyers.

Many sellers are offering incentives to buy, such as help with closing costs or allowances for repairs.

Although local housing markets adjust periodically according to overall economic conditions, over the long term real estate has consistently appreciated.

Homeownership is a stepping-stone to personal financial security and is the single largest creator of wealth for Americans. Historically, home appreciation has risen 5-6% annually. At that rate, the value of a home doubles every 13 years.

Income tax incentives are considerable. The interest you pay on your mortgage and property taxes are deductible at income tax time.

Even better than the annual income tax deductions for interest and taxes is tax-free profit when you sell your home. Couples who own and live in their home for two years and then sell can keep up to $500,000 of the profit tax-free. (An unmarried owner can keep $250,000 profit tax-free.)

Tax-free profit can be repeated over and over. If the person or couple buys another home and lives in it home for at least two years, the same rules hold true when they sell again.

The intangible benefits of homeownership are considerable. Overall, homeownership strengthens communities. Homeowners tend to be active in charities, churches and neighborhood activities. Homeownership inspires civic responsibility, and homeowners are more likely to vote and get involved with local issues. Children of homeowners are generally better students, due in part to the stability in their lives.

All the above, plus the personal satisfaction of owning your own home should be more than enough to take action now. Homeownership is truly the cornerstone of the American way of life, and the fulfillment of the American dream.

For more information:


Clean Up or Pay Up

Bella Vista is the latest city in Northwest Arkansas to pass an ordinance to control unsightly and unsanitary conditions. (Bella Vista became a city only 18 months ago – before that the property owners association enforced similar rules.)

Bella Vista’s recent action means all NW Arkansas cities now have laws on the books that cover such things as front yards that have been taken over by weeds, junk, or inoperable vehicles.

With the number of unsold, unoccupied homes increasing the number of complaints has also gone up. No one wants to live next door or even a few houses down the street from an eyesore. It’s not just a matter of aesthetics; overgrown yards become havens for insects, rodents and slithery creatures that few people want around.

Cities usually enforce their regulations beginning with a warning letter that states a time limit to correct the problem. Citations and fines come after that. Sometimes a city will have the necessary work done and bill the property owner. The final straw is a lien placed on the property.

For more information:

Saturday, June 14, 2008

Alignment Plans Finalized for U. S. Hwy. 412 Bypass

Arkansas Highway and Transportation Department unveiled June 4 the proposed final alignment for the U. S. Hwy. 412 northern bypass around Springdale. This project has been talked about since 1996 and may now be one step closer to reality. The bypass would begin west of Tontitown and end east of Sonora (west of the White River bridge). An entrance/exit at U.S. 71B would be the only other access.

While the alignment seems closer to finalization, the subject of financing is far from solved. Current estimates are $415 million to build the bypass – and that doesn’t include an estimated $80 million to purchase land for right of way.

In summer of 2007, estimates were $310 million for construction and $60 million for right-of-way acquisitions. The increase costs are due to inflation, increased constructions costs the fact that some of the land has been developed recently.

The Highway Department has a total of $27 million available to begin purchasing right of way and expects to start that phase before the end of this year.

Who knows when and where the rest of the money will come from. Requests to the state legislature have fallen on deaf ears.

Anyone driving the section of U. S. Hwy 412 (Sunset Avenue) in Springdale is cognizant of the fact that a bypass is sorely needed. Tractor-trailer rigs are bumper to bumper alongside cars trying to access the many businesses lining the road. There are all kinds of businesses lining the road; motels and restaurants, supermarkets, gas stations, pizzerias, second-hand stores, car lots, shoe stores, ice cream parlors, movie rental stores, and lots and lots of traffic lights. Delays and frustration are the norm.

The need for the bypass exists – the money doesn’t.

For more information:



Sunday, June 08, 2008

Fayetteville High School Update

The Fayetteville School Board, at its meeting May 29, 2008, voted 6 to 1 to offer to sell its 40-acre high school campus to University of Arkansas for $59 million. The offer is for land and buildings, including the high school, administrative offices, and sports facilities. At a meeting last Friday, U of A officials responded with a counter offer of $50 million. Terms and conditions would still need to be worked out.

Of course, the amount is subject to much discussion. Whether it appears too high or too low depends on which side of the fence people interviewed are on. From the U of A side, some feel that even $50 million is too high, given that substantial remodeling and refitting of the building will be required. From the School Board’s point of view and that of Buildsmart (an organization which favors keeping Fayetteville HS in its current location), the offer seems low.

Another issue from the U of A point of view is where the money to pay for it will come from. Some oppose adding to student fees to finance the purchase.

A sale of this magnitude is the largest either the U of A or Fayetteville School Board has ever undertaken. An appraisal commissioned by the district has placed the value of the property at $61.28 million, while another commissioned by the university put the price at $56.4 million.

If and when the sale is accepted, Fayetteville School Board will have many more crucial items to face before a new high school is built. First is location and second is funding. (I should have said first is funding because without that, location won’t matter.)

A new high school (and land) will cost somewhere around $110 million and inflation drives up the price every day. Even with $50 million in hand, a millage increase (between 3 and 5 mills) will have to be approved by the voters and that’s tough to do in Fayetteville.

In April the Fayetteville High School Select Committee 2 recommended that a new high school be built on a 73-acre site they refer to as Morningside (701 E. Huntsville Road). The school board has authorized the superintendent to explore that purchase for $5 million.

The board will also have to decide whether to sell 100 acres it owns in the northwest section of the district since it has now been eliminated as the site of the new high school.

The whole responsibility of whether, where, when, and how to build a new high school is complex at best. There are so many what ifs ---

Will the U of A and the Fayetteville School Board be able to negotiate a price agreeable to both sides?

What if U of A buys and voters deny a millage increase?

How large a millage increase will be needed?

Stay tuned for further details.

For more information:


Fayetteville Girl Going to the Olympics

At 16 years of age, Margaux Isaksen is an amazing young woman. The Fayetteville, Arkansas native has qualified to represent the U. S. at the 29th Olympic games in Beijing, China. She will compete in the modern pentathlon -- epee fencing, equestrian show jumping, swimming 200 meters, cross-country running 3,200 meters, and pistol shooting.

It’s unusual to have someone so young train for the triathlon, never mind excel in it. Isaksen did not start training fulltime until September 2007. Her original plan was to train for the 2012 Olympics but she has performed so well in recent months that she is now ranked second highest scoring American in the Modern Pentathlon World Cup Standings.

Only two competitors are permitted from each country. Isaksen’s teammate is 39-year-old Sheila Taormina.

Isaksen’s accomplishments give me more reasons to follow the Olympics this year. I wish her well.

For more information:




Friday, May 30, 2008

Marshallese Citizens in NW Arkansas Welcome President Litokwa Tomeing

Thousands of Marshallese people, many of them residents of NW Arkansas, welcomed Litokwa Tomeing, President of the Republic of the Marshall Islands (RMI), to Springdale over the Memorial Day weekend. Others came from as far away as Oregon and Florida.

The reason for President Tomeing’s visit was two-fold: to celebrate the 29th anniversary of Marshall Island independence and to announce there would soon be a fully staffed consulate in Springdale.

NW Arkansas is currently home to roughly 5,000 to 6,000 Marshallese. Hawaii and Oregon also have large populations with smaller groups living in Oklahoma, Texas and Florida.

A little background is necessary to understand why so many Marshallese come to this country to live and work --

During World War II, the United States conquered the Japanese who controlled and occupied the islands after the First World War. In 1947 the Marshall Islands and several more island groups in the South Pacific Sea were added to the Trust Territory of the Pacific Islands, administered by the U.S.

From 1946 to 1958 the U.S. tested 66 nuclear weapons in the Marshall Islands including the largest nuclear test the U.S. ever conducted. (If you’re old enough, I’m sure the names Bikini Atoll, Rongelap, and Aniwetok are familiar). Some health effects were virtually immediate while long term results still linger.

RMI consists of 29 atolls and 5 isolated islands spread over an area of about one million square miles. The population totals about 62,000 people. Most of the land lies at sea level and is vulnerable to typhoons. The economy is mainly agricultural but has few natural resources. Imports far exceed exports.

The U.S. Army maintains its Ronald Reagan Ballistic Missile Defense Test Site on Kwajalein Atoll and in addition to paying rent to the land owners, it is the largest employer.

The Republic of the Marshall Islands (RMI) was officially established in 1979 and became self governing.

In 1986 RMI and the U.S. entered into the Compact of Free Association which provided for U.S. aid to and defense of RMI in exchange for continued U.S. military use of the missile testing range on Kwajalein Atoll.

Under the Compact of Free Association, Marshallese citizens can come and go freely between their homeland and the United States. They can live, work and receive education in the U.S. but they maintain Marshallese citizenship. They are considered migrants — not immigrants or refugees. The migrant designation permits the Marshallese to enter and leave the U.S. without being screened.

Obviously, many have chosen the U.S.

To celebrate President Tomeing’s visit local Marshallese organized food, sports, singing, lots of visiting, and health and job fairs. Marshallese communities across the country sent 60 teams to compete in sports tournaments that included basketball, softball and volleyball. The 3-day celebration was held at Jones Center for Families in Springdale.

Foreign Minister Tony DeBrum who accompanied President Tomeing said the largest overseas Marshallese community lives in NW Arkansas. RMI is in the process of meeting U.S. requirements for the establishment of a consulate in Springdale to look after its citizens.

For more information:





Wednesday, May 21, 2008

Did you know it's possible to get an Energy Efficient Mortgage?

Energy Efficient Mortgage (EEM) is one of many FHA programs that insure mortgage loans. The mortgages are actually made by many banks, savings and loan associations, and mortgage companies, and the loans are covered by EEM insurance through FHA.

The idea behind the EEM program is to help achieve national energy-efficiency goals and reduce pollution as well as to provide better housing for people who might not otherwise be able to afford it.

The program considers the anticipated savings on monthly utility bills when a buyer purchases an energy-efficient home.

For example, let’s say the utilities in an older home you are considering will cost $200 a month and you qualify for a mortgage payment of $700/month but if you buy a certified energy-efficient home instead, the utility expense will be only $100/month. Now you can qualify for an $800 monthly mortgage payment.

This is a very simplified explanation but I hope it’s sufficient to give some serious consideration to an EEM.

Other provisions of the program are geared to adding energy efficient improvements to an existing home – one you already own or one you are considering buying.

Click on the links below for more details and technical information, such as maximum amounts, who qualifies, and how to get an EEM:


Wednesday, May 14, 2008

Investment Opportunity?

I came across an interesting tidbit the other day.

Remember the movie Sleepless in Seattle that starred Tom Hanks and Meg Ryan? Well, grab your checkbook and come on down! The houseboat seen in that motion picture can be yours for a mere $2.5 million.

The houseboat was built in 1978 and at 2,075 square feet is probably the largest houseboat on Lake Union. It features four bedrooms, nearly two full bathrooms, large windows and views of downtown Seattle, according to a Seattle newspaper article. (I’m still trying to figure out what “nearly two full bathrooms” means).

Don’t spend all your money to purchase it though because you’ll need $6,450 annually for taxes plus $388 monthly for homeownership dues.

The Realtor® showing the houseboat says about 50 agents and perhaps a dozen potential buyers have viewed it – but so far no offers.

According to my calculations, $2.5 million for 2,075 square feet of livable space equals an astronomical $1,200 per square foot.

(And I've been complaining about $200 per square foot for the downtown Fayetteville condos)...


Light Rail – What is it and when is it coming to Northwest Arkansas?

As a professional Realtor®, I spend a good amount of time on the roads of NW Arkansas and frequently get stuck in gridlock. Traffic backs up on the ramps to and from I-540. The major intersections in Fayetteville and Bentonville repeatedly resemble parking lots. Traffic congestion is a huge waste of productive time, causes unnecessary expense at the gas station, adds to pollution, and increases daily stress.

If you’ve read my previous blogs, you heard me complain about the need for improvements to infrastructure and a light rail transportation system in NW Arkansas. Perhaps the time is getting closer for some serious consideration of light rail.

First, let me explain the term “light rail.” It generally refers to a system of streetcars that operate on some type of electric rail, ideally separated from automobile traffic. However, life is seldom ideal so light rail is often mixed with other city traffic.

Light rail usually makes frequent stops to load and unload passengers. It does not operate as fast as true rapid transit systems such as those found in large cities (think subways and elevated trains in New York or Chicago). Neither is it a railroad train that runs between cities and across the country.

Infrastructure has simply not been able to keep up in NW Arkansas. No matter how fast new roads are built or widened, they become clogged. Yet, many people don’t want to seriously consider light rail yet. Would they rather wait until we way behind on that front as well?

No one knows what a light rail system would cost. Coupling design/engineering/utility costs with right-of-way acquisitions and construction costs puts the estimate as high as $1 billion. That’s an astronomical amount of money. On the other hand, doing nothing for another 10 or 15 years would probably make $1 billion sound like a bargain.

There are many points to consider, such as:

Is our population large enough to support a light rail system? (Estimates are approximately 400,000 people live in Washington and Benton Counties.)

Would people avail themselves of light rail or continue to drive their gas-guzzling SUVs?

What other economic benefits would a light rail system provide?

What are the costs of not building a light rail system? (More and more roads?)

What high will the cost of gasoline rise?

I am not the first to think a feasibility study needs to be conducted to evaluate light rail and other methods of moving people around this area. The study might cost $1 million but the cost of doing nothing is much more expensive. My hope is that we can get moving on the study within the next year.

For more information:



Thursday, May 08, 2008

First Quarter 2008 Skyline Report

The quarterly Skyline Report breakfast, sponsored by Arvest Bank, was held last week for Washington County at the Clarion Inn in Fayetteville. Kathy Deck of the U of A Center for Business and Economic Research presented the highlights.

It’s always tough to get up early for these breakfasts, but the information for a real estate agent like me is invaluable, and I never miss them. We’re really lucky to have such good data, which usually confirms my own anecdotal evidence.

Anyhow, here’s a summary:

NW Arkansas’ supposedly “bullet proof” economy is showing some cracks. Of concern is the fact that new job growth in the area is less than the previous few years. And jobs are what primarily attract new people to the area (aside from retirees and those who move here for “quality of life” reasons).

Principally, there was a decline in new jobs created in the Professional and Business Services sector and in the Trade, Transportation and Utilities sector. These are large sectors of NW Arkansas employment and have a significant effect on job growth in the area.

In the commercial real estate sector things are not too bad, according to Deck, since commercial spaces in existing buildings are being filled and there has been restraint in initiating new commercial projects. At present there are 32.7 million square feet of competitive commercial space in NW Arkansas.

However, the multifamily situation is less positive. Fayetteville has the most healthy multifamily situation with one-bedroom vacancy rates under 10% while two-bedroom vacancy rates are just over 10%. Springdale’s two-bedroom vacancy rate is at almost 20%, as is that of Rogers. Bentonville’s two-bedroom vacancy rate is about 15%. Economists consider 5% as a healthy multi-family vacancy rate.

The average lease rate for an apartment in NW Arkansas in the first quarter of 2008 was $513, down 1.4% from the fourth quarter of 2007. The average price per square foot was $0.62 in the first quarter.

What I have been terming “condomania” in previous blog posts continues to plague NW Arkansas, as new complexes continue to be built and not necessarily sold. The luxury condos on the market have a list price of between $150-$200 per square foot. But only one of these was sold in the first quarter at a price above $200 per square foot, and only two were sold at prices above $150 per square foot (actually they sold at $152 per square foot).

There are also lots of lower priced condos on the market, for example, for the university market in Fayetteville. But condos in other towns are not doing as well. In Bentonville the average price of the 3 condos sold in the first quarter was $134,480 or $99.18 per square foot. In Fayetteville the average price was $136,362 for the 13 units sold in Q1 or $106.79 per square foot. Rogers had the highest average price for the 8 units sold there in Q1 at $244,684 or $134.30 per square foot.

For single family homes the situation continues as it has been for the past quarters—lots of homes for sale. In Q4 of 2007, there were 44.9 months of lot/ house inventory in active subdivisions and building permits were low. Few new subdivisions were getting approval and average prices were flat to declining.

In Q1 of 2008 building permits are significantly down compared to Q1 of 2007 in all of the major NW Arkansas towns. However, in some of the smaller towns, building permits are up slightly. The value of the permits is also down, reflecting a more realistic view by builders and developers of what buyers can actually purchase. There remains a glut of high-end homes on the market in NW Arkansas. The average value for building permits in both Washington and Benton Counties during Q1 of 2008 was approximately $150,000. (This does not include the value of the land).

The number of lots in active subdivisions continues to be high and has grown during the past couple of years. Benton County had 11,688 lots in active subdivisions in Q1 of 2006, 15,290 in Q1 of 2007, and 17,001 in Q1 of 2008. Washington County had 7,518 lots in active subdivisions in Q1 of 2006, 9,751 in Q1 of 2007 and 10,561 in Q1 of 2008.

However, new homes continue to be absorbed and (with the decrease in building permits) the inventory is decreasing little by little. This is a necessary adjustment. Nevertheless, there was still a surfeit of lots/new homes on the market in NW Arkansas in Q1 of 2008. Bentonville increased to 57.1 months’ worth. Centerton increased to 70.9 months. Fayetteville stayed at the same level at 41.5 months. Rogers increased to 31.8 months, and Springdale decreased to 29.8 months. For NW Arkansas as a whole, there is 49.4 months of lots/new homes available.

But at the same time new subdivisions were approved through the preliminary plat process by city entities in NW Arkansas. If all of these subdivisions were to be built, this would increase the inventory in NW Arkansas to 108 months’ worth. However, according to Deck, with the current credit crunch, many of these developers may not be able to get financing and thus this potential increase in inventory may not occur.

In terms of prices of homes, the situation varies from city to city. The average price of a home sold in Fayetteville actually increased in Q1 of 2008 compared to Q4 of 2007. In Springdale there was a slight increase, and in the smaller towns of Washington County there was a significant decrease in average sale price. In Benton County, Bentonville’s average sale price increased, as did that of Centerton. The average sale price in Rogers and Siloam Springs decreased in Q1 of 2008. But what is not shown in these numbers are concessions made to buyers, such as help with closing costs.

My own take: the bottom line, confirmed by this data from the U of A, is that there is still a lot of inventory, so it’s a great time to purchase a home in NW Arkansas. For sellers, it’s a less attractive scenario. They must price their homes competitively (i.e. on the lower end of any price ranges of recently sold similar homes) due to discounts that builders are giving to get out from under their construction loans on “spec” homes.

The Skyline Report normally deals with new construction for the residential market, but the average price figures also include re-sale homes. With so many new homes on the market in all price ranges, re-sale homes are suffering and staying on the market longer.

For sellers the key is to price their home to sell, not to sit on the market. For buyers, with so much to choose from, it may be difficult to make a decision. But these low prices (along with low interest rates and high inventory) may not last forever.

A lot of people are waiting for the market to “hit bottom” before they purchase a home. The problem with this strategy is that we won’t know when the bottom hits until it is past, and then prices will be on the rise again.

After the speculative frenzy of the past few years in NW Arkansas, it’s time for some sanity to enter the equation again. The outside investors looking for a quick buck have largely left NW Arkansas, and the main thing to keep in mind is that purchasing a home is traditionally a long-term investment. It’s a place to live and enjoy, raise a family, not just a paper investment like stocks and bonds. The market has declined here, but real estate is cyclical. What goes up must come down, and eventually our market will start appreciating again.

It IS a great time to buy now in NW Arkansas.

For more information on purchasing a home now:

http://www.buynwanow.com (why it’s a great time to buy now)
http://www.NWArkansasHomeSearch.com (search the NW Arkansas MLS)
http://www.JudyLuna.com (general information about NW Arkansas and the home purchase process)

Wednesday, May 07, 2008

Removing the Kinks at NW Arkansas’ Professional Baseball Stadium

Springdale’s brand new baseball stadium opened April 10 to a full house of cheering fans, including Arkansas Governor Mike Beebe, Springdale Mayor Jerry Van Hoose, team owners, celebrities, and a flyover by four A-10 Thunderbolts from the Arkansas Air National Guard.

The stadium is beautiful by all accounts but now that the festivities are over, a few kinks need to be worked out – most notably traffic and parking.

Opening night traffic was congested in all directions but 56th Street was probably the worst of all. Of course, it was a sell-out crowd but one would have to hope that big crowds continue to come to the park.

There has been talk of widening 56th Street as well as possibly creating a new exit to the park directly off I-540, both of which would take a lot of money and time.

But, let’s face it; people will not be happy about spending an hour or more in traffic just to get to the stadium.

If development as envisioned by the City of Springdale is to occur in that area, the roads must be improved. It’s that simple!

Moving on to parking (no pun intended), much has to be fixed. The number of parking spaces (1,700) is insufficient for a big crowd. I have never been able to understand how the number of parking spaces is determined when building a new venue. Surely there’s a formula somewhere that needs to be reworked! For example, the new stadium can hold 7,800 fans but has parking for only 1,700 vehicles. That’s roughly 4 1/2 people per car, not counting players and workers. Maybe a lesson from Disney on people moving is in order.

If you think that’s worthy of note, you should have been at the Komen Race for the Cure April 19, which started at the ballpark. At least 17,000 people participated. Tents were set up in the parking lot so even fewer parking spaces were available. Shuttle buses ran from other parking lots but even at that, parking was a total mess.

The City of Springdale has rights to the stadium for concerts throughout the summer with seating for up to 12,000 people. I’m already wondering where those people will park.

I don’t mean to take anything away from the stadium or professional baseball in NW Arkansas, but the reality is that major enhancements will be needed for the success of the entire venture. By the way, the Naturals lost their opening game and have had more losses than wins since then.

For more information:


Friday, April 25, 2008

Employment/Unemployment Picture in NW Arkansas

With all of the doom and gloom about the economy in the media, I wanted to share a few thoughts on the employment/unemployment picture in NW Arkansas---

Benton and Washington counties are alive and well compared to a host of other communities throughout Arkansas and the U.S. in general.

The unemployment rate for the country as a whole was 4.8% in February – a drop of one-tenth of one percentage point.

For the Fayetteville Metropolitan Statistical Area, the drop was six-tenths of one percentage point – from 4.8% to 4.2%. Fayetteville MSA, as defined by the U. S. Bureau of Labor Statistics, includes Washington, Benton, and Madison Counties in Arkansas and McDonald County in extreme southwest Missouri.

For sake of comparison, Little Rock MSA saw a drop of three-tenths of one percentage point – from 5.2% to 4.9%. Fort Smith MSA dropped to 5.1%, and Pine Bluff MSA dropped to 7.7%.

The overall unemployment rate for the State of Arkansas was 5% in February.

Looking at it from a different perspective, Benton County with a total population of some 196,000 people, had approximately 99,000 employed in February. Washington County figures are similar. The population there is estimated at 186,500 and 98,950 people were employed in February.

All in all, these figures are somewhat encouraging. For example, nine Metropolitan Statistical Areas in California are suffering with unemployment rates in excess of 10%. We hear a lot about Detroit these days and no wonder. The unemployment rate for that MSA is 8.5%. It’s disheartening to know that throughout the U. S., 42 Metropolitan Statistical Areas have unemployment rates of 7% or higher!

Things could certainly be better but after reading many facts and figures about the employment/unemployment picture, I know it could be much worse than it is in NW Arkansas.

For more information:


Sunday, April 13, 2008

Walton Arts Center - Grow or Go?

There’s been a lot of talk lately about the future of the Walton Arts Center on Dickson Street in Fayetteville. Has it outgrown its current facility? Can it be enlarged? If a larger facility is needed, will it be in Fayetteville or possibly Benton County?

Along with those questions, the lack of sufficient parking spaces in Fayetteville inevitably surfaces. The city often talks about the need to build a parking garage on the site of the WAC’s current parking lot.

Parking has been a major problem in Fayetteville as long as I can remember.

WAC opened in 1992 and since then has hosted myriad performances such as Broadway shows, YoYo Ma, Bill Cosby, ballet, musicals, ad infinitum.

Fayetteville and Washington County residents have been huge supporters of WAC – there’s no argument about that fact. But, so have Benton County residents and businesses. Attendance at WAC is nearly equal between residents of the two counties, which would indicate WAC would be successful in either county.

Individual contributors are fairly evenly split between the two counties. However, donations by Benton County’s many corporations outpace Washington County donations by a 3-1 margin.

The City of Fayetteville and University of Arkansas jointly own WAC and the city considers it a jewel. WAC was a major impetus in revitalizing run-down Dickson Street and Fayetteville does not want to lose the Walton Arts Center. The University of Arkansas performs multiple shows and concerts in it each year and prefers to have it remain near their campus.

Given all that, there is no doubt that Rogers or Bentonville would be more than happy to see a new, larger WAC more to their area. They have land available with easy access to I-540 and they understand, as does Fayetteville, the economic benefits of a regional arts center.

The first of three feasibility studies has been completed and results indicate NW Arkansas could support a facility of approximately 2,500 seats. The current facility has only 1,200 seats. That makes it much too small for large shows that must sell many tickets to be financially feasible.

Enlarging WAC at its current site would be difficult – but not impossible.

Meanwhile, WAC’s board says it is not planning to move and will make no decisions until after the studies have been completed later this year. No matter whether they choose to grow or go, fund raising would be the next logical step.

So, while all the studies and plans are completed, the subject of a parking garage remains on the table.

Here’s my take on the situation: If, perish the thought, a new and larger WAC is built outside of Fayetteville, the current facility will still be there undoubtedly hosting events that require a concert hall of its size. Additionally, something is always happening on Dickson Street. Parking is a problem now and as the city continues to grow, more parking will be needed.

Let’s not talk the parking garage to death; let’s get started building it.

For more information: