Fayetteville Arkansas, University of Arkansas--Old Main Overview

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

Sunday, March 21, 2010

Crystal Ball Look into the NW Arkansas Housing Market

Predicting what's going to happen in the NW Arkansas housing market is somewhat difficult. People always ask me if the market has hit bottom yet, but I can't really tell them, since generally speaking, prices are still declining.

For those who want to get the "best" deal, there are several factors consider:

1. If you are waiting for the market to hit bottom in NW Arkansas, I think it's close, but not necessarily there yet. It also varies by town.

2. Interest rates are still very low, but predictions are that they will rise this year. What this means is that if a house is cheaper a few months from now, but the interest rates are higher, the monthly payment may still be the same. If home prices begin to rise, and interest rates rise as well, buyers may not be able to purchase as nice a home for the amount they have qualified for. Thus, buyers who are serious about purchasing a home may want to do so sooner rather than later if they find a home they really like.

3. The first time home buyers tax credit of up to $8000 was extended at the end of last year, but to get it, buyers must have an accepted offer by April 30 and close by June 30. Buyers who already have a home and want to purchase another as their principal residence may get a tax credit of up to $6500. They must have lived in their current home for at least 5 of the past 8 years. Check the IRS website to get specific information about these programs.

4. Real estate purchases are normally considered to be long-term investments. During the recent housing bubble, investors and other speculators treated them as short-term investments because they could--prices were appreciating by double digit percentages. Now that is not the case, market adjustments have occurred or are occuring, and buyers need to plan to hold on to their real estate purchases for a longer time before selling.

Which brings me to an interesting article from CNN Money about
homes prices in NW Arkansas and whether it's a good time to purchase a home here.

According to their data, the market in NW Arkansas will hit bottom in the 3rd quarter of 2011 (i.e. next year). Also that there will be a 3.1% decline in prices from the first quarter of this year to the first quarter of 2011. A couple of observations about this data:

1. It refers to all of NW Arkansas, or the Fayetteville-Springdale-Rogers Metropolitan Statistical Area, which also includes part of SW Missouri and Madison County, in addition to Washington and Benton Counties.

2. I'm not sure where Moody's gets their data from, but according to sales in the NW Arkansas MLS (Multiple Listing Service), the peak was different in Washington and Benton Counties, and also differed by town. According to my data from the NW Arkansas MLS, Washington County median home prices peaked in the 3rd-4th quarter of 2006 whereas Benton County's peaked in early 2007. I suppose that if they got their data from county records and/or other sources which also includes homes not listed by a realtor, the aggregate could have been the third quarter of 2006.

Who knows when the bottom will occur? In any case, we won't know it happened until after the fact and we can look at the data. And then it will be too late--prices will already have begun to rise, and who knows about interest rates?

For more current data and an ongoing look at the housing market in NW Arkansas and nationally check out Judy Luna's daily "real estate tidbits" on her Facebook business page.

Sunday, March 14, 2010

NW Arkansas Housing Market--4th Quarter Skyline Report

In the last few weeks the 4th quarter Skyline report was released by the Center for Business and Economic Research at the U of A. At the quarterly Washington County breakfast sponsored by Arvest (also sponsor of the report), Kathy Deck, director of the Center and chief researcher for the Skyline report, talked about the economy as well as the housing market.

The economy—particularly employment—strongly influences the housing market for Northwest Arkansas. If there are no jobs then people will not move to the area. If we don’t have more people moving to the area, there will be no need to construct new homes, establish new businesses (to fill up the vacant commercial and office space we have), improve rental vacancy rates, etc. And if people don’t need homes, the real estate market suffers. It’s that simple.

Nationally it seems that the economy is picking up slightly, and NW Arkansas figures are somewhat better than the national ones. The GDP is up—which means that production is up. Inventories have been depleted so factories are producing more. Some folks who were laid off have been called back to work, a good sign. On the other hand, employers don’t feel confident enough to hire a lot of new people either. Thus in NW Arkansas employment figures are now at about 2006 levels, while nationally they’re at about 2000 levels.

Bottom line is that although there is some positive growth again, it will not be the “go-go” growth of the bubble years. What is needed is good, sustainable growth. According to Deck, “flat is the new up,” when compared to declines during the recent recession.

In the realm of commercial space in Q4 in NW Arkansas, there was near record available space in all sectors. This is one area where NW Arkansas figures are worse than the national figures. For example, office and retail space in all of the NW Arkansas communities is a lot above the national average, although it varies by town. Thus leasing costs have gone down and there are anecdotal reports of greater demands by tenants—leasing incentives such as greater build-out allowances, free rent, and delays in scheduled lease rate increases, for example.

For multifamily, vacancy rates are also above national levels. The national vacancy rate is 8.5% for 1-2 bedroom apartments. NW Arkansas rates approached 15% in Q4, primarily because of a lot of new apartments which were constructed, especially in Fayetteville. Expected population growth didn’t materialize, so the number of vacant units remains high. Springdale is lower, but still over 10%.

In the single family arena, building permits are now very low but the market can sustain this level. The value of permits issued has risen, since many of the residential building permits are for custom homes in Fayetteville and Springdale. In the smaller towns of Washington County most of the new permits issued have been for small, affordable homes.

The inventory is down and the problem of absorption is no longer due to overbuilding, but rather a slow down of demand (i.e. fewer people are to the area). According to Deck, the market can support a low level of construction, in fact we need to have some construction occur. As available units are absorbed, there needs to be replacement or prices will rise significantly as demand outpaces supply.

Prices on single family homes have continued to decline, so that values are now at approximately 2004 levels. In Benton County, the decline was 7.7% compared to the same period last year, and in Washington County there was nearly a 14% decline. There may be continued adjustment due to downward pressure caused by foreclosures and sales of distressed properties as well as by the decreased absorption rate.

Ultimately, low interest rates, lower prices, and the first time home buyer tax credit make this a wonderful time to purchase a home in NW Arkansas. Not a great time for selling, however. The thing buyers need to remember is that purchasing a home is normally considered to be a long-term investment, so that even if prices continue to decline, they will eventually begin to appreciate again.

Predictions are that interest rates will begin to rise, and (with low rates of construction of new homes) absorption of current inventory will also cause prices to begin to rise again.

For more information about real estate in NW Arkansas visit Judy Luna’s main website:

To search for homes or other property in the NW Arkansas MLS:

For more information about the Q4 Skyline report:

Monday, March 08, 2010

2010 Census Coming Soon to Your Mailbox

National Census Day is April 1, 2010. Use that date as your reference point for completing the census forms which will be arriving in mailboxes all over the country in March.

The Census Bureau says this census will be one of the shortest in history - just ten simple questions. Most Americans grew up knowing the national census takes places every ten years. But for newcomers, the census can cause questions, uncertainty, and apprehension.

There is nothing to fear about the census. There are no questions regarding whether you are living in this country legally or illegally, Social Security numbers are not collected, and your privacy is secure.

The data are grouped together and used in a variety of important ways (for example):

--Congressional districts will be redrawn and reapportioned.

--$400 billion is distributed annually to state and local governments for infrastructure and community services (think bridges, hospitals, senior citizen centers, and job training, for example).

--Pools of skilled workers can be located.

Completing the census is mandated by the U.S. Constitution and it makes good sense for the welfare of our community.

All you have to do is take about ten minutes to complete ten questions and mail it back in its postage-paid envelope. If you don’t do that promptly, a census worker will have to drive to your home, knock on your door and ask the questions - and that costs considerably more than the postage-paid envelope. So give yourself a break and save the government some money at the same time.

For more information:

To see the actual questions:


And to get a part time job as a census taker: