Benton County Among the Best in the Country for Employment Growth

Who would have guessed that among thousands of counties in the United States, Benton County, Arkansas, would be in second place for employment? It’s true according to CreditDonkey, a credit card comparison website that publishes various data-driven analyses.

The CreditDonkey study primarily looked at employment growth, wage growth, and improving unemployment rates during the twelve months March 2012 to 2013.

San Mateo County, California was the only county ahead of Benton County. Falling behind Benton County were counties in the Denver, Atlanta, and Seattle metropolitan areas among others. That’s enough to make some of us long-time residents overjoyed. It is always exhilarating to learn that outsiders concur with what we’ve known all along.

During the study period, employment growth in the U.S. grew slightly more than 1.6%. Wage growth in Benton County increased 2.7%.

Wage growth in Benton County increased a whopping 14.3% to an average weekly pay of $1,339. San Mateo County was only one-half of one-percent ahead at 14.8%. The next best rate after Benton County was Loudoun County, Virginia, in the Washington, D. C. area at 2.4% and that’s not even close.

During the same time, average U.S. weekly wages grew by 0.6%, or $6, resulting in an average U.S. paycheck of $989.

Benton County’s unemployment rate also moves in the right direction. In January 2013, the U.S. rate unemployment rate was 7.9% and Benton County’s rate was 6%.  As of August 2013, Benton County’s rate had fallen to 5.4% and the U.S. rate was still above 7%.

Good things are happening all the time in beautiful Northwest Arkansas.

Will Benton County Finally Become “Wet?”

A new effort is underway to give voters an opportunity to decide the question of whether to make Benton County "wet."

The petition will require signatures equal to 38% of the voters in the most recent general election. In Benton County that means nearly 40,000 valid signatures. That is a huge number and is the biggest reason why voters have not had the opportunity to vote on the question since 1944.

The difference this time around is money, organization, experience and the support of some members of the Walton family. An experienced professional firm has been hired to gather the signatures, which must be turned in to the county clerk’s office by August 28.

I’m all for it and while I respect differing opinions, I think the overwhelming majority of residents will agree the time has come.

The backers, with good reason, are calling their initiative “Keep Dollars in Benton County.” The economic benefits of going “wet” are far reaching. In addition to the direct sales tax revenue to the county and the resulting trickle-down effect, it would place the county more favorably in the minds of prospective businesses and visitors alike.

Locals know how to overcome the lack of packaged liquor stores in Benton County. They drive a few miles to Washington County or McDonald County, Missouri. Those counties are more than happy to have thriving businesses within their borders that send sales tax receipts to their local county governments. I’d be willing to bet businesses in these counties will be in direct opposition to Benton County going “wet.”

Arkansas liquor laws are arcane, outdated, even ludicrous in many respects. Some restaurants become "private clubs". Those who purchase a permit and serve food can serve alcoholic drinks to their members – and any adult can become a member by simply signing their name in a register. But restaurants per se cannot serve alcoholic beverages.

Just think of the huge number of people who will come specifically to visit the beautiful Crystal Bridges Museum of American Art. My guess is most will find it amazing and disappointing that they cannot have wine or a cocktail with dinner.

If I lived in Benton County, my vote would be a definite yes.

For more details on this, click here.

Property Tax Appeals – NW Arkansas

Home prices in NW Arkansas are still falling, but the decline is less than in the recent past. In fact, we may be nearing the bottom of the market, but we won’t know that until after that moment has passed. Nevertheless, July is generally when property tax notices for the coming year go out, so residents may find that the value given their property does not conform to current market conditions.

In Washington and Benton County, Arkansas, assessments are normally done every three years. And appeals normally are accepted during the month of July and part of August. However, this year is an assessment year in Washington County, so notices will be sent out to all property owners during the first two weeks of July with the new assessed values. There will be instructions on the notices on how to appeal if you think your taxes are too high, compared to the market value. The latest date for appeal will be August 18.

In Benton County, next year is the assessment year. Tax notices this year will go out in early July and residents may call to schedule appointments to appeal their property tax bill from July 15 to the 3rd Monday in August. The Benton County website has a special page on the appeals process for that county.

One thing to keep in mind is that Washington County Assessor’s Office personnel are aware that we are in a declining real estate market and will be reassessing accordingly. Another is that in Arkansas on one’s principal residence, there is a $350 annual Homestead Credit. You only have to apply once for this and then it is subtracted every year as long as you live in the home. Also there are caps for senior citizens and tax breaks for disabled veterans.

Washington County also has established a website, explainmypropertytax.org, where county residents can obtain answers to their property tax questions. Once notices have gone out by mid-July, it will be possible for property owners to obtain information about their properties and taxes on that website. At this time, only general explanatory information about the tax and appeal process is available.

Deadline to Pay Property Taxes is October 13, 2009

The normal deadline for paying property taxes and personal property taxes is October 10th each year but because the 10th is a Saturday, 11th a Sunday, and Monday the 12th is a Holiday, there is a small reprieve.

Many homeowners 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. The bank holds the tax portion of the payment and then pays the property tax when due. If this is your situation, you can relax since your property taxes have already been paid.

But if you don’t have a mortgage or don’t pay taxes as part of your mortgage, be aware October 13th is rapidly approaching.

When the bills were sent out last spring, they included an option to pay taxes in three payments. If you took advantage of that, don’t forget the third and final payment.

Personal property taxes on cars, trucks, boats, etc., are also due October 13th.

Late payments incur an automatic 10% penalty plus interest.

You can pay your taxes in person but in Washington County this year that is rather inconvenient due to very limited parking. The parking garage is being demolished and a new one will be operational next year. In addition to paying in person or mailing a check, both Benton and Washington Counties offer an ePayment Service. You can pay by Visa, MasterCard, Discover or American Express credit card. Washington County also accepts payment via eCheck - a method of debiting the funds electronically from your checking account just as though you had written a check.

However, be advised that if you use any of the methods just mentioned, you will incur a processing fee. The county websites state, “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.”

The web addresses for paying online are:

https://www.ark.org/washingtoncounty/index.php
https://www.ark.org/bentoncounty/index.php

Benton County Property Taxes Lowered for Some

Benton County has lowered values on some residential real estate by more than $2.5 million dollars. That means about 38,000 people will see their tax bills lowered for 2009. Note that 2008 taxes, which must be paid in full by October 10, 2009 will not be affected.

The move was a result of a report by an independent appraiser that Benton County had hired due to the public outcry on reassessments. The adjustments were limited to residences in towns and cities, not business or commercial properties or rural residences, since the majority of devaluations were residential properties located in cities, according to the report.

The county is under no obligation to send notices of the adjustments to owners via U.S. Mail. To find out if your property is affected, you need to go online http://www.co.benton.ar.us/BentonCountyNews.aspx?id=22 and fill out a short form.

If you wish to appeal the assessment on your home, you need to contact the Benton County Assessor at 479-271-1000 between July 20 and August 17 to make an appointment with the board of equalization.

Washington County property owners take heart. The county assessor is seeking permission to begin a similar process. If she receives the go-ahead, it’s possible homeowners and landlords may see tax relief next year.

You can call the Washington County Assessor’s Office now at 479-444-1500 if you wish to appeal the appraised value on your property.

For more information:

http://www.nwaonline.net/articles/2009/07/08/news/070909bzequalization.txt

Benton County Homeowners to Receive a Break on Property Taxes—Yeah!

Benton County will be lowering values on residential properties by 2% - 6%. The percentages vary by area. Northeast Benton County will decrease by 6%, the southwest portion of the county will decrease by 2%, and other areas will be between those two figures.

When homeowners received their property assessments in 2008 there were thousands of unhappy people. By law, those values were based on 2005-2007 sales when prices were rapidly escalating. Thousands of appeals were filed, which resulted in many lowered valuations.

Now that property values have decreased again the county assessor is taking the first steps to lower appraisals.

This is a bit of good news for homeowners who are seeing the value of their homes shrink.

Commercial and industrial property appraisals will remain unchanged.

Note: In Arkansas, counties assess properties every third year. Thus, the next reappraisal was not scheduled until 2011. (For more details about the hows and whys of Arkansas appraisals, see my blog “Benton County Reappraisal Process is Complete” which I posted July 19, 2008.)

For more information:

http://www.nwaonline.net/articles/2009/03/02/news/030309bzequalization.txt

http://www.nwarktimes.com/adg/News/253986/

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:

http://www.co.washington.ar.us
http://www.co.benton.ar.us

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:

http://www.nwarktimes.com/adg/News/232968

http://www.nwarktimes.com/adg/Business_Matters/233953

http://www.nwarktimes.com/adg/News/233166

http://www.nwarktimes.com/adg/Business/233671

http://www.nwaonline.net/articles/2008/08/19/business/082008foreclosures.txt

http://www.nwarktimes.com/adg/National/236465
http://www.realtytrac.com/ContentManagement/pressrelease.aspx?ChannelID=9&ItemID=5163&accnt=64847#statetable

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/

http://nwanews.com:80/bcdr/News/64125/
http://nwanews.com/bcdr/News/64436/

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

http://www.nwanews.com:80/adg/News/231396/

http://www.co.benton.ar.us/Assessor/HomesteadApp.pdf

http://www.co.washington.ar.us/Assessor/Am79.htm

Property taxes due this coming Wednesday

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

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

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

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

The web addresses for the two county websites are:

http://www.co.washington.ar.us
http://www.co.benton.ar.us

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

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

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

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

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

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

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

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

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

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

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

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

For more information:

http://www.nwanews.com/adg/Editorial/190255
http://www.nwanews.com/nwat/News/54771/

January Home Prices Declined in Northwest Arkansas

According to an article in the business section of the Morning News last Monday, home prices began sliding down in Benton County (decrease of almost 6%) in January with a significant drop in sales (down 19.69% from January of 2006). At the same time, while average prices in Washington County also decreased by 11%, the number of sales increased by 8.28% compared to January of last year.

This is a good-news/bad-news scenario for Northwest Arkansas, depending on whether you are a buyer or a seller of a home. For sellers, it means that they may not be able to sell their home at the price they might have hoped had the market continued rising at the same pace as during the past several years. For buyers, it means that with lower prices, they might be able to get a nicer home in their price range, and perhaps more people will now be able to consider purchasing a home.

A positive trend, not mentioned in the article, is that an increasing supply of more modestly-prices homes has contributed to the decrease in the average price of homes sold. This is good news, since it means that builders have finally seen the light and started building more affordable homes. This is also good news for buyers who haven’t been able to afford a new home because prices for such homes were so high. For example, there are now new homes being built in Fayetteville for less than $150K (only 2 subdivisions so far, but hey, it’s a start). This price for a new home hasn’t been seen for several years in Fayetteville. And this trend also exists in other communities in NW Arkansas.

According to Kathy Deck of the U of A Center for Business and Economic Research, the decline in home sales could be the beginning of the kind of corrections which have been occurring elsewhere in the nation. Until recently the NW Arkansas real estate market has largely been immune to these trends.

For more specific data on the January Arkansas Home Sale figures, the Morning News article can be seen at:

http://www.nwaonline.net/articles/2007/03/05/business/030607arrealtors.txt

To view a copy of Judy’s Market Report for 2006, write her an email at judy@judyluna.com

4th Quarter Skyline Report Released on NW Arkansas Housing Market

This past week the Skyline Report for the 4th Quarter of 2006 was released. Announced at a breakfast sponsored by Arvest Bank for Realtors®, developers, and others on Tuesday, February 13, Kathy Deck (Interim Director for the Center for Business and Economic Research) summarized the trends as presented by the data for the 4th quarter of 2006.

The Skyline Report is an economic summary of the real estate market in NW Arkansas, prepared for Arvest Bank by the Center for Business and Economic Research of the Sam Walton School of Business at the University of Arkansas. As Realtors®, we are very fortunate to have this kind of statistical analysis available to us, since it provides scientifically prepared data which confirms our sometimes-anecdotal experience of the real estate market.

The 4th quarter summary provided some interesting statistics. For the past several years, the results have revealed a tendency of builders and developers to build too many homes, especially expensive homes, which are now sitting on the market. However, this report showed some changes in this behavior, which I would interpret as positive indicators for the NW Arkansas housing market. But there was bad news as well as good news, depending on whether one lives or does business in Washington or Benton County.

According to Kathy Deck, the number of building permits drawn in Benton County has “fallen off a cliff,” particularly in Rogers. They were significantly down in the 4th quarter of 2006. For the housing market as a whole, this was a very necessary step because of the extreme oversupply of homes available in Benton County. The result has been that the number of complete but unoccupied homes in Benton County fell for the first time in many quarters, while the annual absorption rate continued to grow. This means that homes on the market are being purchased by people continuing to move into the area. There are still homes being built but at a slower pace, and employment growth continues at over 600 new jobs per month, which bodes well for continued absorption of homes. Another positive factor is that the price point of the permits pulled indicates a recognition of the need for more affordable housing. In Benton County this was for homes between $100,000 and $150,000 (not including the value of the land).

The data for Washington County, on the other hand, posed some warning signals. Although the number of building permits for Washington County was also down, and the number of homes under construction in active subdivisions was also down, the number of complete but unoccupied homes in Washington County continued to rise, while the absorption rate fell slightly. This means that homes currently on the market will take somewhat longer to sell, compared to Benton County. And with regard to the price point of permits pulled, the price point during the 4th quarter of 2006 was between $150,000 to $200,000 (not including land), which means that more expensive homes are still being built, despite a somewhat inflated supply already available in Washington County.

What this means for buyers is that it is a very good time to purchase a home, since interest rates are still low and there is a lot of housing inventory to choose from, especially if the buyer wants to purchase a new home. For sellers (including builders of new homes) this means that buyers are now calling the shots, so sellers need to price their homes competitively. Conditions are still “worse” in Benton County than in Washington County for builders with a lot of new unsold homes.

Some of the statistics of the report summary include:

1. There were 21,037 lots in the 301 active subdivisions in NW Arkansas in the 4th quarter, up from the previous quarter. Using the most recent annual absorption rate, the supply of remaining lots in those active subdivisions is sufficient for 47.0 months (almost 4 years worth).

2. In the 4th quarter of 2006, there were 2551 complete but unoccupied houses, compared to 2956 in the 3rd quarter. Benton County experienced a decline of 25.5% in available complete inventory from the 3rd quarter of 2006, but an increase of 92.4% in available complete inventory from the 4th quarter of 2005. This is to be compared with the 3rd quarter increase if 229% increase in inventory between the 3rd quarter of 2005 and 2006. In comparison, Washington County experienced a 28.1% inventory increase over the past quarter and a cumulative increase of 33.4% over the past year.

3. From August 16 to November 15, 2006, there were 1784 existing houses sold in Benton and Washington Counties. This is a decline of 21.1% from the same time period in 2005. Even as recently as the 3rd quarter, the decline (compared to the 3rd quarter of 2005) was only 3.1%. What that means is that home sales during the 3rd quarter of 2006 continued relatively stable, while in the 4th quarter the number of home sales declined significantly.

4. In the 4th quarter of 2006 in NW Arkansas, the average sales price of existing houses declined from 4th quarter 2005 levels by 4.5% in Washington County (compared to a continued increase of 2.3% in the 3rd quarter). In Benton County the average sales price continued to climb by 8.0%. .

5. There were an additional 19,811 residential lots that have been at least preliminarily approved in NW Arkansas. Adding these proposed lots to those in active subdivisions yields a whopping 114.8 months of inventory in NW Arkansas (that’s 9.6 years for those who don’t want to do the math).

6. Surprisingly, although construction is down, in terms of employment in NW Arkansas the Construction sector continued to have the highest growth rate. Manufacturing lost jobs, while all other sectors increased. The 2nd highest sector was Professional and Business services, while 3rd was Health and Educational services. Other sectors grew more slowly.

So what does this all mean for buyers and sellers of homes?

As with my analysis of the previous, 3rd quarter 2006 report, the same trends apply. If no new subdivisions are approved, even in the ones already approved and underway, there are a lot of homes out there, ready for sale—over 4 years worth in active subdivisions and almost 10 years worth in additional subdivisions already approved if these are built out. Economists might see the drop in new building permits as a negative factor, but I see it as an indication that builders and developers are finally getting smart and putting on the brakes to conform to the current reality. A further aspect of this data means that many of the approved subdivisions may not get built out quickly, given the supply of already finished homes on the market now.

Home prices as a whole are not going down, at least in Benton County. There may be some individual sellers who had their homes priced too high (from the recent seller’s market) and have adjusted them to current market conditions (a buyer’s market). But although home values are not increasing at the double digits of the past several years, there is still appreciation taking place. In Washington County, however, home prices have come down. What this means for buyers still sitting on the fence is that a significant adjustment has already taken place. It may continue into the present quarter, but I would foresee that by the time the good weather hits during the 2nd quarter of this year, prices will begin to go up again as more buyers hit the streets.

All in all, the “sky is NOT falling”, and I see the outlook for the NW Arkansas housing market as positive. Contrary to the national media hype, what’s happening in California and elsewhere is not happening here, and buyers seem to realize this. Anecdotally, business has been picking up despite the bad weather, and because inventory is still high, buyers have a lot to choose from. But because of the overbuilding as indicated by the Skyline report, some of those high-ticket homes may continue to sit for awhile.

One thing I should mention is that that Skyline Report is a phenomenal undertaking. What the Center for Business and Economic Research does is obtain data from the different cities about subdivision approvals, building permits, etc. Then they send out university students to physically examine what is happening on each lot in active subdivisions. They note whether lots are vacant, started (i.e. a slab), under construction, finished but not occupied, or occupied homes. The center also examines data from the NW Arkansas Multiple Listing Service as to home sales data and prices for homes, i.e. average and median prices for different areas