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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.
Showing posts with label Washington County Arkansas. Show all posts
Showing posts with label Washington County Arkansas. Show all posts
Wednesday, June 16, 2010
Tuesday, October 06, 2009
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
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
Sunday, July 19, 2009
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
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
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:
http://www.co.washington.ar.us
http://www.co.benton.ar.us
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
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:
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
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
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:
http://www.nwanews.com:80/adg/News/230807/
http://www.nwaonline.net/articles/2008/07/10/columns/brenda_blagg/071108blagg.txt
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:
http://www.nwanews.com:80/adg/News/230807/
http://www.nwaonline.net/articles/2008/07/10/columns/brenda_blagg/071108blagg.txt
Friday, January 18, 2008
No Increase in Millage Rates
It appears the cities, counties and school districts that were all talking last fall about the necessity to raise taxes have found ways to keep that from happening – at least for another year.
If you’ll scroll down to the article I posted October 22, 2007, “Will Property Taxes Increase in Northwest Arkansas?” you’ll see that the gist of the matter was that sales tax revenues were down, bridges were falling apart, and school districts needed new schools.
Most of the councils had to work hard to reach consensus about what to cut while still providing necessary services. But the good news is they did their job - just as families are forced to do when income goes down.
The overall picture is now a little brighter. The latest report (October 2007) of Fayetteville’s sales tax receipts shows an increase of 3.8% compared to same month in 2006. The general opinion is the opening of Sam’s Club and Malco’s state-of-the-art movie theater all significantly improved Fayetteville’s revenue stream. However, Fayetteville is the anomaly for that time period. Bentonville’s receipts decreased 8.86%, Rogers down 6.11%, and Springdale down 6.17%.
Washington County Quorum Court says it has depended more on property taxes and less on sales tax receipts for the past several years. When income was greater than expenses, the county squirreled money away so that it now has approximately $15 million in reserve.
City of Rogers ended its fiscal year with a huge reserve. Not only did the city bring in more revenue than projected, it managed to decrease expenditures. Wouldn’t it be great if that feat could be accomplished throughout the area?
Another thing that helped avoid a millage increase is the increased assessed value of property in NW Arkansas. Naturally as values increase, tax revenues increase but Arkansas has laws to keep those increases from getting out of hand. Amendment 59 to the Arkansas Constitution states taxes cannot increase by more than 10% from the previous year, excluding newly discovered or constructed properties.
The bottom line is some entities, such as Washington County, have had to actually decrease the millage rate 0.2 mills from the preceding year. The rate has been set at 6.6 mills.
Millage rates in Washington County can be viewed by going to http://www.co.washington.ar.us/ then click on Information, then scroll down to Millage Rates.
Benton County does not have a list of millage rates on its website but reviewing the faxed copy I received, I think it’s fair to say the majority of entities in Washington County have slightly lower millage rates than those in Benton County.
For more information:
http://www.nwaonline.net/articles/2007/10/29/news/103007szbudget.txt
http://www.nwaonline.net/articles/2007/10/30/news/103107fzcmill.txt
http://www.nwaonline.net/articles/2007/11/18/news/111907bzschoolboardadv.txt
http://www.nwaonline.net/articles/2007/12/28/news/122907fzwaschofinances.txt
http://www.nwarktimes.com/brog/News/55839/
http://www.nwaonline.net/articles/2008/01/02/news/010308fzsalestax.txt
http://www.nwaonline.net/articles/2008/01/03/news/010408fzwaschoqc.txt
http://www.nwarktimes.com/nwat/News/60850/
If you’ll scroll down to the article I posted October 22, 2007, “Will Property Taxes Increase in Northwest Arkansas?” you’ll see that the gist of the matter was that sales tax revenues were down, bridges were falling apart, and school districts needed new schools.
Most of the councils had to work hard to reach consensus about what to cut while still providing necessary services. But the good news is they did their job - just as families are forced to do when income goes down.
The overall picture is now a little brighter. The latest report (October 2007) of Fayetteville’s sales tax receipts shows an increase of 3.8% compared to same month in 2006. The general opinion is the opening of Sam’s Club and Malco’s state-of-the-art movie theater all significantly improved Fayetteville’s revenue stream. However, Fayetteville is the anomaly for that time period. Bentonville’s receipts decreased 8.86%, Rogers down 6.11%, and Springdale down 6.17%.
Washington County Quorum Court says it has depended more on property taxes and less on sales tax receipts for the past several years. When income was greater than expenses, the county squirreled money away so that it now has approximately $15 million in reserve.
City of Rogers ended its fiscal year with a huge reserve. Not only did the city bring in more revenue than projected, it managed to decrease expenditures. Wouldn’t it be great if that feat could be accomplished throughout the area?
Another thing that helped avoid a millage increase is the increased assessed value of property in NW Arkansas. Naturally as values increase, tax revenues increase but Arkansas has laws to keep those increases from getting out of hand. Amendment 59 to the Arkansas Constitution states taxes cannot increase by more than 10% from the previous year, excluding newly discovered or constructed properties.
The bottom line is some entities, such as Washington County, have had to actually decrease the millage rate 0.2 mills from the preceding year. The rate has been set at 6.6 mills.
Millage rates in Washington County can be viewed by going to http://www.co.washington.ar.us/ then click on Information, then scroll down to Millage Rates.
Benton County does not have a list of millage rates on its website but reviewing the faxed copy I received, I think it’s fair to say the majority of entities in Washington County have slightly lower millage rates than those in Benton County.
For more information:
http://www.nwaonline.net/articles/2007/10/29/news/103007szbudget.txt
http://www.nwaonline.net/articles/2007/10/30/news/103107fzcmill.txt
http://www.nwaonline.net/articles/2007/11/18/news/111907bzschoolboardadv.txt
http://www.nwaonline.net/articles/2007/12/28/news/122907fzwaschofinances.txt
http://www.nwarktimes.com/brog/News/55839/
http://www.nwaonline.net/articles/2008/01/02/news/010308fzsalestax.txt
http://www.nwaonline.net/articles/2008/01/03/news/010408fzwaschoqc.txt
http://www.nwarktimes.com/nwat/News/60850/
Tuesday, November 13, 2007
New Zoning Regulations in Rural NW Arkansas
If you live in NW Arkansas, I’m sure you heard much talk about the rock quarry proposal for the southwest part of Washington County. Debate was loud and lengthy. The end result was the rock quarry could proceed because the county had no zoning regulations to stop it.
And it was just about one year ago that the Quorum Court took action to regulate density around existing city limits. That law established zoning areas within two miles of larger cities and within one mile of smaller towns. Development in those areas is limited to agricultural uses and single-family homes, which must be situated on at least one acre of land.
Now the Court, by a 7-6 vote, has passed an ordinance that zoned all unincorporated portions of the county as agricultural. Residents of the rural areas will now have some say about what is built in their neighborhoods.
The ordinance amends the zoning regulations passed last year. Anything other than a single-family home on at least one acre will be required to go before the Washington County Planning Board to make the case for a conditional-use permit.
Since November 2006, the Planning Board has considered 19 proposals and denied only two: one was a subdivision with 5 homes per acre and the other was to construct storage warehouses in a residential area.
So it seems to me that the new zoning regulations actually protect property values. I know I would not want a rock quarry, smelter, red-dirt pit or noisy factory situated next door to my home, and I don’t know anyone else who does.
In the debate over the most recent decision of the Quorum Court, the usual cry arose from some of the old timers who don’t want anyone telling them what they can do with their land. I think it’s time everyone realized that NW Arkansas is being coming more urbanized every day and rules and regulations are necessary to ensure an orderly society.
I’ll even go so far as to say that I believe it might even be time for building codes in rural areas. It’s not the law yet, but I’ve seen homes in the county that are practically impossible to sell because they were not “built to code.” Buyers these days almost always hire a professional building inspector who has the skill to know good from bad in such things as electrical wiring, plumbing, and structural safety.
Substandard buildings can also be hazardous to the inhabitants. There was a fire several years ago in such a home in Washington County where several small children were killed as they slept.
I don’t ever want to read sad headlines like those again. Laws are generally to protect the people, and I think the Washington County Quorum Court has shown remarkable restraint in trying to balance traditional values with the needs for orderly growth.
For more information:
Refer to my blog archives for article posted November 23, 2006
http://www.nwarktimes.com/nwat/News/59069/
And it was just about one year ago that the Quorum Court took action to regulate density around existing city limits. That law established zoning areas within two miles of larger cities and within one mile of smaller towns. Development in those areas is limited to agricultural uses and single-family homes, which must be situated on at least one acre of land.
Now the Court, by a 7-6 vote, has passed an ordinance that zoned all unincorporated portions of the county as agricultural. Residents of the rural areas will now have some say about what is built in their neighborhoods.
The ordinance amends the zoning regulations passed last year. Anything other than a single-family home on at least one acre will be required to go before the Washington County Planning Board to make the case for a conditional-use permit.
Since November 2006, the Planning Board has considered 19 proposals and denied only two: one was a subdivision with 5 homes per acre and the other was to construct storage warehouses in a residential area.
So it seems to me that the new zoning regulations actually protect property values. I know I would not want a rock quarry, smelter, red-dirt pit or noisy factory situated next door to my home, and I don’t know anyone else who does.
In the debate over the most recent decision of the Quorum Court, the usual cry arose from some of the old timers who don’t want anyone telling them what they can do with their land. I think it’s time everyone realized that NW Arkansas is being coming more urbanized every day and rules and regulations are necessary to ensure an orderly society.
I’ll even go so far as to say that I believe it might even be time for building codes in rural areas. It’s not the law yet, but I’ve seen homes in the county that are practically impossible to sell because they were not “built to code.” Buyers these days almost always hire a professional building inspector who has the skill to know good from bad in such things as electrical wiring, plumbing, and structural safety.
Substandard buildings can also be hazardous to the inhabitants. There was a fire several years ago in such a home in Washington County where several small children were killed as they slept.
I don’t ever want to read sad headlines like those again. Laws are generally to protect the people, and I think the Washington County Quorum Court has shown remarkable restraint in trying to balance traditional values with the needs for orderly growth.
For more information:
Refer to my blog archives for article posted November 23, 2006
http://www.nwarktimes.com/nwat/News/59069/
Monday, October 22, 2007
Will Property Taxes Increase in NW Arkansas?
There’s been a lot of talk lately about the need to increase taxes in our area. The City of Fayetteville, Fayetteville School District, Benton County and Washington County have all mentioned the possibility of higher taxes and the talk seems to be getting louder all the time.
First, let me explain how taxes are determined in Arkansas. One mill is 1/10 of one cent ($.001). The value for tax assessment is 20% of fair market value, which is then multiplied by the effective millage rate. This applies to real estate (homes) and personal property (vehicles, boats and other similar items). A home with a market value of $100,000 would be valued at $20,000 for tax purposes. For example, property within Fayetteville School District and the City of Fayetteville in 2006 was taxed at 50.70 mills. Multiplying $20,000 x .05070 equals a tax of $1014.00.
The City of Fayetteville says it will probably need a 0.9-mill increase to compensate for falling sales tax revenue.
Fayetteville School District says it will need a millage increase of 4 to 10 mills in the not too distant future to build a new high school.
Washington County needs money to replace bridges, one of which has been closed to all traffic and three more bridges need major repairs. This has caused county officials to seriously consider raising the road tax to 3 mills, an increase of 1.9 mills.
Benton County is thinking about a sales tax increase to cover the expenses of moving juvenile detention and court facilities.
As you can see, there are many reasons for possible tax increases and just as many pros and cons. I don’t have the space here to go into all the ramifications, but quality of life has to be given serious consideration. Without street improvements, good schools, adequate police and fire protection, clean air, parks, etc., quality of life decreases.
Higher taxes make most people unhappy. No one ever asks how much more they should pay yet most of us complain about gridlock on the roads or not having immediate response when we need a police officer.
I read recently that Fayetteville City government may cut cost-of-living adjustments for employees in order to lower the tax increase. I have to agree with police and fire fighters – that’s not the best way to balance the budget. City employees deserve to have their wages keep up not only with inflation but also with pay scales in similar cities. We don’t want to lose good, experienced police, fire fighters, and city workers.
Washington County reassessed all real estate in 2007, which resulted in higher appraised values for nearly every parcel. The increased value will be reflected on next year’s tax bills and means higher taxes even if the millage rate is unchanged.
Sam’s Club moved from Springdale to Fayetteville just a few weeks ago. Naturally, that means more sales tax revenue for the city. Malco Movie Theater just opened its brand new, state-of-the-art, digital 12-screen theater in Fayetteville, which is also expected to bring in more sales taxes. But these two new sales tax sources will not make up for the reduced level of revenue from sales taxes in Fayetteville.
Another factor to keep in mind is that Fayetteville is the lowest taxing city of any of the major towns in NW Arkansas, according to Mayor Dan Coody. And a modest increase in the millage now may prevent a larger increase in the future.
Some government entities have money in reserve accounts. I know we have to have money in the “rainy-day fund,” but dark clouds are already gathering.
The needs are numerous, expensive, and easy to justify. Maybe we need to face reality and dig deeper into our wallets.
For more information:
http://nwaonline.net/articles/2007/10/14/news/101507fzmillage.txt
http://www.nwaonline.net/articles/2007/10/11/columns/brenda_blagg/101207blagg.txt
http://www.nwarktimes.com/nwat/News/58291/
http://www.nwarktimes.com/nwat/News/58263/
http://www.nwarktimes.com/nwat/Editorial/58200/
First, let me explain how taxes are determined in Arkansas. One mill is 1/10 of one cent ($.001). The value for tax assessment is 20% of fair market value, which is then multiplied by the effective millage rate. This applies to real estate (homes) and personal property (vehicles, boats and other similar items). A home with a market value of $100,000 would be valued at $20,000 for tax purposes. For example, property within Fayetteville School District and the City of Fayetteville in 2006 was taxed at 50.70 mills. Multiplying $20,000 x .05070 equals a tax of $1014.00.
The City of Fayetteville says it will probably need a 0.9-mill increase to compensate for falling sales tax revenue.
Fayetteville School District says it will need a millage increase of 4 to 10 mills in the not too distant future to build a new high school.
Washington County needs money to replace bridges, one of which has been closed to all traffic and three more bridges need major repairs. This has caused county officials to seriously consider raising the road tax to 3 mills, an increase of 1.9 mills.
Benton County is thinking about a sales tax increase to cover the expenses of moving juvenile detention and court facilities.
As you can see, there are many reasons for possible tax increases and just as many pros and cons. I don’t have the space here to go into all the ramifications, but quality of life has to be given serious consideration. Without street improvements, good schools, adequate police and fire protection, clean air, parks, etc., quality of life decreases.
Higher taxes make most people unhappy. No one ever asks how much more they should pay yet most of us complain about gridlock on the roads or not having immediate response when we need a police officer.
I read recently that Fayetteville City government may cut cost-of-living adjustments for employees in order to lower the tax increase. I have to agree with police and fire fighters – that’s not the best way to balance the budget. City employees deserve to have their wages keep up not only with inflation but also with pay scales in similar cities. We don’t want to lose good, experienced police, fire fighters, and city workers.
Washington County reassessed all real estate in 2007, which resulted in higher appraised values for nearly every parcel. The increased value will be reflected on next year’s tax bills and means higher taxes even if the millage rate is unchanged.
Sam’s Club moved from Springdale to Fayetteville just a few weeks ago. Naturally, that means more sales tax revenue for the city. Malco Movie Theater just opened its brand new, state-of-the-art, digital 12-screen theater in Fayetteville, which is also expected to bring in more sales taxes. But these two new sales tax sources will not make up for the reduced level of revenue from sales taxes in Fayetteville.
Another factor to keep in mind is that Fayetteville is the lowest taxing city of any of the major towns in NW Arkansas, according to Mayor Dan Coody. And a modest increase in the millage now may prevent a larger increase in the future.
Some government entities have money in reserve accounts. I know we have to have money in the “rainy-day fund,” but dark clouds are already gathering.
The needs are numerous, expensive, and easy to justify. Maybe we need to face reality and dig deeper into our wallets.
For more information:
http://nwaonline.net/articles/2007/10/14/news/101507fzmillage.txt
http://www.nwaonline.net/articles/2007/10/11/columns/brenda_blagg/101207blagg.txt
http://www.nwarktimes.com/nwat/News/58291/
http://www.nwarktimes.com/nwat/News/58263/
http://www.nwarktimes.com/nwat/Editorial/58200/
Saturday, October 06, 2007
Property taxes due this coming Wednesday
Just thought I would post a reminder that property and personal property taxes in Arkansas are due this Wednesday. If you don't pay on time, there will be a 10% late fee.
Many home owners pay their taxes as part of their monthly mortgage payment. The annual tax is divided into 12 and the home owner pays 1/12 each month. Then when tax bills are sent out, the bank pays the property tax, usually in April or May. These folks can rest easy, since their property taxes have already been paid.
But if your bank is not paying your property taxes as part of your mortgage and you didn't pay them last spring when the bills were sent out, then you only have a few more days to pay them. There are also those pesky personal property taxes. Those are also due now, if you haven't already paid them when you got your bill last spring.
One good thing if you don't want to stand in line at the county courthouse in Washington or Benton County--you can now pay them on line with a credit card or have them directly deducted from your checking account. But if you want to pay from your checking account in Washington County, make sure you have your tax bill handy, since you will need it for security purposes. There is also an extra charge in Washington County to pay on line. I'm not sure about Benton County, since I don't live there.
The web addresses for the two county websites are:
http://www.co.washington.ar.us
http://www.co.benton.ar.us
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
Tuesday, July 24, 2007
New Washington County Property Appraisals
The Washington County Assessor's Office determines the value of property every three years.
Most owners have by now received Notice of Change in Assessment letters and the majority of those letters indicate increased values, much like what occurred when reassessments were done in 2004. At that time, assessed values increased significantly over previous assessments, as they were brought more in line with market value at a time when the market was increasing at double-digit rates. Previously assessed values were much less than market value.
Here’s how it works. First the 2007 Appraised Value is determined. That amount is multiplied by 20% to determine 2007 Full Assessed. Then the 2007 Full Assessed is multiplied by the millage rate in effect where the property is located.
People usually get upset anytime they see their taxes increase and this year is no different. One of the most common complaints I hear is that property values have gone down – not up. But the important thing to remember is that the reappraisal compares property values in 2004 to 2007. I think it’s fair to say most property values in Washington County have increased in the past three years.
On the other hand, some of the new appraisals are clearly out of line, but it is an individual situation. For example, I have a client who purchased a new home last August for $165,000 and whose reassessment says it is now worth $175,000. According to market data I have analyzed (check my first quarter market report in the archives of this blog), prices decreased in the last quarter of 2006 in Washington County by about 14%. Although they began rising again in the first quarter of 2007, if my clients where to market their home now, they would be hard pressed to even get what they paid for it a year ago.
Here are two important statements which I took directly from the Notice of Change in Assessment:
“Assessments on properties serving as the principal place of residence for any taxpayer who is disabled or who is 65 years of age or older prior to Jan. 1, 2007, shall be assessed at a level no greater than the Previous Taxable Assessed plus the full assessed value on any modifications made to the property that were not previously assessed.”
“Assessments on properties serving as the principal place of residence for all other taxpayers shall be limited to a 5% increase over the Previous Taxable Assessed plus the full assessed value on any modifications made to the property that were not previously assessed. The 5% increase will occur yearly until the Full Assessed Value is reached.”
This limit extends so long as the property is not sold. The full appraised value kicks in once the property is sold to a new owner.
If you feel your property is unfairly assessed, call 479-587-1130 to speak with an appraiser at Arkansas CAMA Technology, Inc., the firm that performed the appraisals for Washington County.
If you wish to schedule a formal hearing with County Equalization Board, call the County Clerk’s office at 479-444-1711 no later than August 20, 2007.
Hearings will begin August 1, 2007 and if required, will continue through October 1, 2007.
One piece of good news – With 2007 taxes, which are due in October 2008, homeowners will receive up to $350.00 property tax credit on the property serving as their principal residence. This is an increase of $50 over 2006 taxes, which are due October 2007. If you have not previously applied for this credit, do so by calling the Washington County Assessor at 479-444-1500.
For more information:
http://www.nwaonline.net/articles/2007/07/02/news/070307fzwaschoreappraise.txt
Most owners have by now received Notice of Change in Assessment letters and the majority of those letters indicate increased values, much like what occurred when reassessments were done in 2004. At that time, assessed values increased significantly over previous assessments, as they were brought more in line with market value at a time when the market was increasing at double-digit rates. Previously assessed values were much less than market value.
Here’s how it works. First the 2007 Appraised Value is determined. That amount is multiplied by 20% to determine 2007 Full Assessed. Then the 2007 Full Assessed is multiplied by the millage rate in effect where the property is located.
People usually get upset anytime they see their taxes increase and this year is no different. One of the most common complaints I hear is that property values have gone down – not up. But the important thing to remember is that the reappraisal compares property values in 2004 to 2007. I think it’s fair to say most property values in Washington County have increased in the past three years.
On the other hand, some of the new appraisals are clearly out of line, but it is an individual situation. For example, I have a client who purchased a new home last August for $165,000 and whose reassessment says it is now worth $175,000. According to market data I have analyzed (check my first quarter market report in the archives of this blog), prices decreased in the last quarter of 2006 in Washington County by about 14%. Although they began rising again in the first quarter of 2007, if my clients where to market their home now, they would be hard pressed to even get what they paid for it a year ago.
Here are two important statements which I took directly from the Notice of Change in Assessment:
“Assessments on properties serving as the principal place of residence for any taxpayer who is disabled or who is 65 years of age or older prior to Jan. 1, 2007, shall be assessed at a level no greater than the Previous Taxable Assessed plus the full assessed value on any modifications made to the property that were not previously assessed.”
“Assessments on properties serving as the principal place of residence for all other taxpayers shall be limited to a 5% increase over the Previous Taxable Assessed plus the full assessed value on any modifications made to the property that were not previously assessed. The 5% increase will occur yearly until the Full Assessed Value is reached.”
This limit extends so long as the property is not sold. The full appraised value kicks in once the property is sold to a new owner.
If you feel your property is unfairly assessed, call 479-587-1130 to speak with an appraiser at Arkansas CAMA Technology, Inc., the firm that performed the appraisals for Washington County.
If you wish to schedule a formal hearing with County Equalization Board, call the County Clerk’s office at 479-444-1711 no later than August 20, 2007.
Hearings will begin August 1, 2007 and if required, will continue through October 1, 2007.
One piece of good news – With 2007 taxes, which are due in October 2008, homeowners will receive up to $350.00 property tax credit on the property serving as their principal residence. This is an increase of $50 over 2006 taxes, which are due October 2007. If you have not previously applied for this credit, do so by calling the Washington County Assessor at 479-444-1500.
For more information:
http://www.nwaonline.net/articles/2007/07/02/news/070307fzwaschoreappraise.txt
Monday, March 12, 2007
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
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
Sunday, February 18, 2007
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
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
Monday, December 04, 2006
Manufactured Housing Could Help the Reduce the Shortage of Affordable Housing
Whether you call manufactured homes by their proper designation or still refer to them as mobile homes (or even trailers), there continues to be a stigma attached to them. On the other hand, with the increasing urbanization of Washington and Benton Counties, formerly rural areas are now becoming high-end subdivisions, so that the old mobiles in the area now detract from the value of the new housing being built.
It’s a “Catch 22.” We need affordable housing. Land prices have skyrocketed so that new “stick-built” homes are too expensive for many workers whose salaries have not kept pace with the cost of housing. Manufactured housing might provide a lower-cost alternative. But the current climate of development with regard to manufactured housing is “not in my backyard.” The old attitudes still apply.
New manufactured homes are built to an exacting Federal construction code implemented in 1974, known as the HUD Code. They are transported and installed under state and local laws and regulations. The HUD Code encompasses construction and performance of heating, air conditioning, ventilation, plumbing, thermal and electrical systems. Many manufacturers view the HUD Code as minimum performance standards and exceed those standards in their basic designs plus offer upgrades for increased energy efficiency and overall performance. And if such a home has a bank-approved permanent foundation, it is eligible for regular mortgages, rather than high-interest loans, and it has a decidedly increased re-sale value.
Some parts of the country (Arizona being a good example) have lovely parks, especially for retirees, where people can either rent a space for their manufactured home or buy their land in a park. Many of these parks offer swimming pools, community centers with large kitchens, pool tables and meeting spaces, etc. To assure ongoing aesthetics, regulations usually cover everything from maintenance of the exterior of the home to pets, fences, parking and clotheslines. Residents frequently become close friends with their neighbors and feel a deep sense of security because they care about and look out for each other.
I am sorry to say, this type of park does not exist in NW Arkansas. Most here are meccas for lower income dwellers, and they don’t have a lot of amenities such as those described above. But they do often develop a sense of community, according to local owners of existing mobile home parks. And they do provide a low-cost alternative for residents who cannot afford a “stick-built” home.
Let’s analyze the situation for a moment. The cause of the bad reputation of manufactured homes is not the quality of construction; it is what some people who live in manufactured homes do to their home sites. One does not have to go very far in NW Arkansas to find old trailers, mobile homes, and even newer manufactured homes surrounded by junk—the term for this is “trailer trash.” I have never been able to understand why some people prefer to decorate their yards with old washing machines, sofas, and vehicles that haven’t been usable for many years.
However, I must say that owners of manufactured homes do not have an exclusive on that type of décor. I have also observed many older homes where residents of stick-built homes do the same thing. A couple of these come immediately to mind. One has gone so far as to not only leave his junked vehicles and dead refrigerators in the front yard, he has even imported other refrigerators and freezers to keep them company. The other one is definitely a Ford man – every pickup he has owned in the past 30 years is parked in his yard where he can see them and be reminded daily of their past lives.
But there are many good things about manufactured homes that should not be overlooked. Foremost is affordability. With the escalating price of land in NW Arkansas, builders can no longer afford to construct "starter" homes for under $100K as was possible even a few years ago. So-called "moderately priced housing" now starts at about $140K because of escalating land prices.
The latest information I have from Northwest Arkansas Regional Planning Commission defines affordable housing as a single-family home with a permit value under $75,000 (this does not include the land or lot). In NW Arkansas only 2.1 percent of housing units added in 2004 were valued below $75,000, and in the past couple of years the situation has worsened. It is easy to see a huge gap between what is being built and what is affordable for many families.
Prices are more affordable in the far western part of Washington and Benton Counties, and in the southern part of Washington County. Madison County and other more rural areas continue to be somewhat affordable but living that far out means longer commute times and increased travel expenses to the major NW Arkansas towns, where most of the jobs are.
Another problem is zoning regulations. Arkansas’ Affordable Housing Accessibility Act took effect October 1, 2003. It requires cities to allow prefabricated homes in at least one residential zoning district but implementation has been slow. The fear (and unfortunately, the reality) is that the new, often up-scale homes will be devalued by the mobile homes next door. Fayetteville and Bentonville have already changed their ordinances to conform to the new law. Fayetteville now allows them in an agricultural-residential district, and Bentonville has one residential manufactured housing district.
Since there has been no real zoning in the unincorporated areas of Washington and Benton Counties, the rural areas are where most manufactured homes are found. However in recent years, many people with land for sale place have placed deed restrictions on the land prohibiting mobiles/manufactured homes of any kind. It is increasingly difficult, even in rural areas, to find land where manufactured homes may be placed. Perhaps one answer (with the advent of zoning rules for Washington County) would be to designate some areas and/or rules for manufactured housing.
As more and more land is gobbled up for apartment buildings and stick-built homes, spaces in existing parks for manufactured homes have become ever more scarce. I can’t think of any new parks being built in NW Arkansas recently, although several have disappeared. Several existing mobile home parks have a zero occupancy rate, so the demand is there.
The challenge becomes more acute as NW Arkansas grows from being a predominantly rural area with a scattering of small towns to an urbanized metropolitan area. Now many people simply cannot afford the average stick-built home. Should they be forced to pay rent forever? Should they be forced to move somewhere else more affordable?
We need workers if we hope to sustain and grow the economy of NW Arkansas. The workers deserve a place to live – and a home they can call their own IS the “American Dream.” Our city officials must consider affordable housing alternatives in a realistic fashion and overcome traditional stereotypes. If manufactured housing is not included by planners, then what is the alternative?
For more information:
http://www.amha.net/enter/questions.htm
http://www.nwanews.com/story.php?paper=adg§ion=Business_Matters&storyid=127513
http://www.nwanews.com/story.php?paper=adg§ion=News&storyid=37130
http://en.wikipedia.org/wiki/Mobile_homes
http://publicarticles.info/articles/mobile_homes/index.asp
http://www.hud.gov/homes/manufactured.cfm
It’s a “Catch 22.” We need affordable housing. Land prices have skyrocketed so that new “stick-built” homes are too expensive for many workers whose salaries have not kept pace with the cost of housing. Manufactured housing might provide a lower-cost alternative. But the current climate of development with regard to manufactured housing is “not in my backyard.” The old attitudes still apply.
New manufactured homes are built to an exacting Federal construction code implemented in 1974, known as the HUD Code. They are transported and installed under state and local laws and regulations. The HUD Code encompasses construction and performance of heating, air conditioning, ventilation, plumbing, thermal and electrical systems. Many manufacturers view the HUD Code as minimum performance standards and exceed those standards in their basic designs plus offer upgrades for increased energy efficiency and overall performance. And if such a home has a bank-approved permanent foundation, it is eligible for regular mortgages, rather than high-interest loans, and it has a decidedly increased re-sale value.
Some parts of the country (Arizona being a good example) have lovely parks, especially for retirees, where people can either rent a space for their manufactured home or buy their land in a park. Many of these parks offer swimming pools, community centers with large kitchens, pool tables and meeting spaces, etc. To assure ongoing aesthetics, regulations usually cover everything from maintenance of the exterior of the home to pets, fences, parking and clotheslines. Residents frequently become close friends with their neighbors and feel a deep sense of security because they care about and look out for each other.
I am sorry to say, this type of park does not exist in NW Arkansas. Most here are meccas for lower income dwellers, and they don’t have a lot of amenities such as those described above. But they do often develop a sense of community, according to local owners of existing mobile home parks. And they do provide a low-cost alternative for residents who cannot afford a “stick-built” home.
Let’s analyze the situation for a moment. The cause of the bad reputation of manufactured homes is not the quality of construction; it is what some people who live in manufactured homes do to their home sites. One does not have to go very far in NW Arkansas to find old trailers, mobile homes, and even newer manufactured homes surrounded by junk—the term for this is “trailer trash.” I have never been able to understand why some people prefer to decorate their yards with old washing machines, sofas, and vehicles that haven’t been usable for many years.
However, I must say that owners of manufactured homes do not have an exclusive on that type of décor. I have also observed many older homes where residents of stick-built homes do the same thing. A couple of these come immediately to mind. One has gone so far as to not only leave his junked vehicles and dead refrigerators in the front yard, he has even imported other refrigerators and freezers to keep them company. The other one is definitely a Ford man – every pickup he has owned in the past 30 years is parked in his yard where he can see them and be reminded daily of their past lives.
But there are many good things about manufactured homes that should not be overlooked. Foremost is affordability. With the escalating price of land in NW Arkansas, builders can no longer afford to construct "starter" homes for under $100K as was possible even a few years ago. So-called "moderately priced housing" now starts at about $140K because of escalating land prices.
The latest information I have from Northwest Arkansas Regional Planning Commission defines affordable housing as a single-family home with a permit value under $75,000 (this does not include the land or lot). In NW Arkansas only 2.1 percent of housing units added in 2004 were valued below $75,000, and in the past couple of years the situation has worsened. It is easy to see a huge gap between what is being built and what is affordable for many families.
Prices are more affordable in the far western part of Washington and Benton Counties, and in the southern part of Washington County. Madison County and other more rural areas continue to be somewhat affordable but living that far out means longer commute times and increased travel expenses to the major NW Arkansas towns, where most of the jobs are.
Another problem is zoning regulations. Arkansas’ Affordable Housing Accessibility Act took effect October 1, 2003. It requires cities to allow prefabricated homes in at least one residential zoning district but implementation has been slow. The fear (and unfortunately, the reality) is that the new, often up-scale homes will be devalued by the mobile homes next door. Fayetteville and Bentonville have already changed their ordinances to conform to the new law. Fayetteville now allows them in an agricultural-residential district, and Bentonville has one residential manufactured housing district.
Since there has been no real zoning in the unincorporated areas of Washington and Benton Counties, the rural areas are where most manufactured homes are found. However in recent years, many people with land for sale place have placed deed restrictions on the land prohibiting mobiles/manufactured homes of any kind. It is increasingly difficult, even in rural areas, to find land where manufactured homes may be placed. Perhaps one answer (with the advent of zoning rules for Washington County) would be to designate some areas and/or rules for manufactured housing.
As more and more land is gobbled up for apartment buildings and stick-built homes, spaces in existing parks for manufactured homes have become ever more scarce. I can’t think of any new parks being built in NW Arkansas recently, although several have disappeared. Several existing mobile home parks have a zero occupancy rate, so the demand is there.
The challenge becomes more acute as NW Arkansas grows from being a predominantly rural area with a scattering of small towns to an urbanized metropolitan area. Now many people simply cannot afford the average stick-built home. Should they be forced to pay rent forever? Should they be forced to move somewhere else more affordable?
We need workers if we hope to sustain and grow the economy of NW Arkansas. The workers deserve a place to live – and a home they can call their own IS the “American Dream.” Our city officials must consider affordable housing alternatives in a realistic fashion and overcome traditional stereotypes. If manufactured housing is not included by planners, then what is the alternative?
For more information:
http://www.amha.net/enter/questions.htm
http://www.nwanews.com/story.php?paper=adg§ion=Business_Matters&storyid=127513
http://www.nwanews.com/story.php?paper=adg§ion=News&storyid=37130
http://en.wikipedia.org/wiki/Mobile_homes
http://publicarticles.info/articles/mobile_homes/index.asp
http://www.hud.gov/homes/manufactured.cfm
Thursday, November 23, 2006
Washington County Takes Action to Limit Density Near Cities
The Washington County Quorum Court voted November 9, 2006, to implement new zoning requirements near its cities. Because the new ordinance received the nine votes required in order to pass and by invoking the emergency clause, it became effective immediately.
Pros and Cons
Numerous discussions and proposals have been held in past months. As is usual in these matters, citizens held varying opinions on the subject.
Those in favor of limiting density cited lack of infrastructure, particularly fire protection. Rural fire departments have limitations by their very nature and high-density developments pose many problems. Lack of schools and high traffic on country roads were other major limiting factors. A desire to maintain the rural atmosphere also appeared to be a high priority item. Without zoning regulations, there was no way to stop apartment buildings or red-dirt pits from springing up next door to an existing farmhouse.
People against the vote, at least at this time, said more time should have been devoted to public discussion. Some were against zoning restrictions of any type because they don’t like being told what they can do with their land. That is the very reason they chose to live outside city limits. Owners of acreage felt that the new regulations would negatively impact the value of their land. One citizen voiced concern that the regulations were intended to keep less affluent people from being able to buy a starter home in the area.
Regardless, guesswork about when and how the Quorum Court might act have ended. The regulations are now law.
The Bottom Line
Any proposed development that did not have preliminary approval by November 9 is subject to the new ordinance.
The ordinance establishes zoning areas within two miles of larger cities and within one mile of smaller towns. Development in those areas is limited to agricultural uses and single-family homes, which must be situated on at least one acre of land. The larger cities are Fayetteville, Springdale, Farmington, Prairie Grove, West Fork and Lincoln. The smaller cities are Elkins, Elm Springs, Goshen, Johnson, Greenland, and Tontitown.
No action was taken to establish zoning outside the one- and two-mile limits around existing cities.
Certain commercial corridors such as U.S. 412 and sections of U.S. 71, U.S. 62 and Arkansas 16 will be exempt from the ordinance. The exempted area will extend 300 feet from the centerline of the highway.
Only One Other Arkansas County Has Similar Rules
Crittendon County adopted a master use plan in 1974, but it was basically ignored for years until being used again in 2005, according to Crittendon County officials.
It is interesting to note that Benton County was unsuccessful in its efforts to pass zoning ordinances a couple of years ago.
Wiggle Room
The new ordinance also created a Zoning Board of Adjustment, which can approve conditional use permits if the development is deemed compatible with the surrounding area. The Board will require a written application and fee plus notification to neighboring property owners that a variance is under consideration. The Board will determine whether the proposed use is compatible with the area and whether or not it appears to be detrimental to the area or a danger to the public. The proposed use must also not interfere with surrounding property owner's enjoyment of their land.
Currently, a permit is not required to build a single-family home as long as it will be on at least one acre and no land splits are involved. The Quorum Court has a proposal under consideration that would require a permit in the future. The proposal will have its second reading in December and its third and final reading in January 2007.
For more information:
http://www.nwaonline.net/articles/2006/11/03/news/110306fzwshcoplanning.txt
http://www.nwaonline.net/articles/2006/11/10/news/111006wzfayzoning.txt
http://www.nwaonline.net/articles/2006/11/10/news/111106fzwashcoqc.txt
Pros and Cons
Numerous discussions and proposals have been held in past months. As is usual in these matters, citizens held varying opinions on the subject.
Those in favor of limiting density cited lack of infrastructure, particularly fire protection. Rural fire departments have limitations by their very nature and high-density developments pose many problems. Lack of schools and high traffic on country roads were other major limiting factors. A desire to maintain the rural atmosphere also appeared to be a high priority item. Without zoning regulations, there was no way to stop apartment buildings or red-dirt pits from springing up next door to an existing farmhouse.
People against the vote, at least at this time, said more time should have been devoted to public discussion. Some were against zoning restrictions of any type because they don’t like being told what they can do with their land. That is the very reason they chose to live outside city limits. Owners of acreage felt that the new regulations would negatively impact the value of their land. One citizen voiced concern that the regulations were intended to keep less affluent people from being able to buy a starter home in the area.
Regardless, guesswork about when and how the Quorum Court might act have ended. The regulations are now law.
The Bottom Line
Any proposed development that did not have preliminary approval by November 9 is subject to the new ordinance.
The ordinance establishes zoning areas within two miles of larger cities and within one mile of smaller towns. Development in those areas is limited to agricultural uses and single-family homes, which must be situated on at least one acre of land. The larger cities are Fayetteville, Springdale, Farmington, Prairie Grove, West Fork and Lincoln. The smaller cities are Elkins, Elm Springs, Goshen, Johnson, Greenland, and Tontitown.
No action was taken to establish zoning outside the one- and two-mile limits around existing cities.
Certain commercial corridors such as U.S. 412 and sections of U.S. 71, U.S. 62 and Arkansas 16 will be exempt from the ordinance. The exempted area will extend 300 feet from the centerline of the highway.
Only One Other Arkansas County Has Similar Rules
Crittendon County adopted a master use plan in 1974, but it was basically ignored for years until being used again in 2005, according to Crittendon County officials.
It is interesting to note that Benton County was unsuccessful in its efforts to pass zoning ordinances a couple of years ago.
Wiggle Room
The new ordinance also created a Zoning Board of Adjustment, which can approve conditional use permits if the development is deemed compatible with the surrounding area. The Board will require a written application and fee plus notification to neighboring property owners that a variance is under consideration. The Board will determine whether the proposed use is compatible with the area and whether or not it appears to be detrimental to the area or a danger to the public. The proposed use must also not interfere with surrounding property owner's enjoyment of their land.
Currently, a permit is not required to build a single-family home as long as it will be on at least one acre and no land splits are involved. The Quorum Court has a proposal under consideration that would require a permit in the future. The proposal will have its second reading in December and its third and final reading in January 2007.
For more information:
http://www.nwaonline.net/articles/2006/11/03/news/110306fzwshcoplanning.txt
http://www.nwaonline.net/articles/2006/11/10/news/111006wzfayzoning.txt
http://www.nwaonline.net/articles/2006/11/10/news/111106fzwashcoqc.txt
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