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In local and state publications, the official announcement of the most recent Skyline report happened last week. Actually, the Washington County preview for real estate agents and others was a couple of weeks ago at the now-biannual (used-to-be-quarterly) breakfast in Fayetteville. I was there; I just didn’t get my blog post written before the official announcement.
Anyhow, things are looking up in the NW Arkansas housing market, according to economist Kathy Deck, director of the Center of Business and Economic Research at the U of A, which is in charge of preparing the report for Arvest Bank.
In her presentation, she contrasted the positive economic outlook in NW Arkansas to that in the country as a whole, which she described as “slow, slogging steady growth.” She said that employment in NW Arkansas in June was at an all-time record high of 211,100 jobs, which equals what it was during the peak of the housing boom about 5 years ago. The importance of good employment opportunities is a constant theme in Deck’s presentations, since jobs are what draw people to the area and thus stimulates the housing market here.
Another positive highlight from the report was the lowering of multifamily vacancy rates in the area, which now generally are near 5%. Just a few yours ago in the 4th quarter of 2009 these hovered between 15% and 20%. In Fayetteville particularly, these positive numbers have resulted from the increase in enrollment at the University of Arkansas, which now has about 25,000 students. Recent university announcements have set the new goal for projected growth at 28,000 students. Although there are a number of projects in the pipeline, based on building permit applications, there is some room for expansion of multifamily dwellings.
As to residential building permits, there has been a small increase, but this is warranted as the existing inventory of single family homes is absorbed (that means that people are finally out there buying houses). Another factor is that more expensive homes are being built. Nevertheless, the number of so-called “spec” homes is still relatively low, unlike the boom years when too many homes, especially expensive homes, were being built.
The bottom line is that home prices in NW Arkansas appear to have bottomed out in many price ranges. It also varies according to town. In Bentonville, for example, absorption is up compared to Washington County, where it has remained somewhat flat.
Deck also suggested that interest rates will probably remain low for the foreseeable future, as the Federal Reserve tries to stimulate the economy. With continuing low interest rates and with continued absorption of inventory, prices may continue to rise—a definite turnaround from recent years.
For some of the more detailed data in the report, articles in the NW Arkansas Business Journal and the Arkansas Business Journal have some specifics.
I am a big fan of the Skyline report, and I think we NW Arkansas real estate agents are very fortunate to have such a wonderful resource at our disposal. Basically, it gives me facts and figures to support what I’m seeing on an anecdotal basis in my daily business of selling homes. Most realtors I talk to are in agreement that the market has picked up significantly this year, starting last spring. The new Skyline Report supports that perception.
Showing posts with label economic development. Show all posts
Showing posts with label economic development. Show all posts
Saturday, September 01, 2012
Friday, November 26, 2010
NW Arkansas’s Economy Continues to Improve - Slowly
Slow and steady seem to be the key words to describe improving economic conditions, in Arkansas as well as the country. We all wish the words could be dynamic or thriving – but let’s appreciate every bit of good news we get.
The U.S. Labor Department reported the economy added more than 150,000 jobs in October. That’s good news.
The average number of hours worked increased by 6 minutes. Doesn’t sound like much but it is good news because employers tend to increase employees’ work hours before adding new hires. Let’s face it, these days any increase in hours worked is good because people take home more money.
The number of first-time applicants for unemployment decreased. I don’t even have to tell you that’s good news.
But even better news has been happening all along in Arkansas.
Arkansas’ unemployment rate has consistently been about 2% lower than the national average, although it rose 0.1% in October compared to September to 7.8%. The national unemployment rate continued at 9.6%. The Fayetteville-Springdale-Rogers MSA* leads the state's metros with the lowest 2010 third-quarter jobless rate, at 6.3%.
Arkansas is ranked in the top 10 for states with the LEAST number of foreclosures.
Arkansas’ taxable sales were up 0.9% in the third quarter of 2010.
Projections are that Arkansas will show personal-income growth ahead of the U.S. rate at 6% for 2011.
Positive signs are beginning to appear. Keep your fingers crossed for the trend to continue. Why? Because the more jobs there are, the more people will want to move here and buy houses.
* Fayetteville-Springdale-Rogers MSA (Metropolitan Statistical Area) includes Benton, Madison, and Washington counties in Arkansas as well as McDonald County in extreme southwest Missouri.
For more information:
National Public Radio Report
Arkansas Business Report
The U.S. Labor Department reported the economy added more than 150,000 jobs in October. That’s good news.
The average number of hours worked increased by 6 minutes. Doesn’t sound like much but it is good news because employers tend to increase employees’ work hours before adding new hires. Let’s face it, these days any increase in hours worked is good because people take home more money.
The number of first-time applicants for unemployment decreased. I don’t even have to tell you that’s good news.
But even better news has been happening all along in Arkansas.
Arkansas’ unemployment rate has consistently been about 2% lower than the national average, although it rose 0.1% in October compared to September to 7.8%. The national unemployment rate continued at 9.6%. The Fayetteville-Springdale-Rogers MSA* leads the state's metros with the lowest 2010 third-quarter jobless rate, at 6.3%.
Arkansas is ranked in the top 10 for states with the LEAST number of foreclosures.
Arkansas’ taxable sales were up 0.9% in the third quarter of 2010.
Projections are that Arkansas will show personal-income growth ahead of the U.S. rate at 6% for 2011.
Positive signs are beginning to appear. Keep your fingers crossed for the trend to continue. Why? Because the more jobs there are, the more people will want to move here and buy houses.
* Fayetteville-Springdale-Rogers MSA (Metropolitan Statistical Area) includes Benton, Madison, and Washington counties in Arkansas as well as McDonald County in extreme southwest Missouri.
For more information:
National Public Radio Report
Arkansas Business Report
Saturday, April 10, 2010
University of Arkansas Has Huge Impact on NW Arkansas
The University of Arkansas’ flagship campus is located in Fayetteville, right where it’s been since it was founded in 1871. The university offers more than 200 graduate and post-graduate programs and its research, development, and outreach aids local public and private sectors.
None of that is news to most folks but I wonder how many of us ever stop to think about the overall economic impact the university has in NW Arkansas…
$725.4 million for the fiscal year ended June 30, 2009 was the amount concluded by an exhaustive study recently produced for the Office of the Chancellor. The study looked at direct expenditures by the university as well as spending and taxes paid by faculty, staff, students and visitors.
A few examples include payroll of $246 million, direct expenditures to NW Arkansas businesses by the university of $56.9 million, student expenditures of $173.7 plus visitors added an additional $127.5 million to the local economy.
Not only are those numbers huge, they must be extrapolated many times over to take trickle-down factors into consideration. Most of that payroll is spent locally. Homes and vehicles are purchased, state and local taxes paid, children of faculty and staff are enrolled in schools, contributions made to local churches and charities, restaurants, medical professionals, gas stations, clothing stores – the list is endless.
If University of Arkansas were not here, this area would have an entirely different landscape.
Go Hogs!
Read the entire 106-page report:
http://www.uark.edu/rd_vcad/economicImpact/rd_vcad/documents/The_Economic_Impact_of_the_University_of_Arkansas_Final_Version_for_Print.pdf
None of that is news to most folks but I wonder how many of us ever stop to think about the overall economic impact the university has in NW Arkansas…
$725.4 million for the fiscal year ended June 30, 2009 was the amount concluded by an exhaustive study recently produced for the Office of the Chancellor. The study looked at direct expenditures by the university as well as spending and taxes paid by faculty, staff, students and visitors.
A few examples include payroll of $246 million, direct expenditures to NW Arkansas businesses by the university of $56.9 million, student expenditures of $173.7 plus visitors added an additional $127.5 million to the local economy.
Not only are those numbers huge, they must be extrapolated many times over to take trickle-down factors into consideration. Most of that payroll is spent locally. Homes and vehicles are purchased, state and local taxes paid, children of faculty and staff are enrolled in schools, contributions made to local churches and charities, restaurants, medical professionals, gas stations, clothing stores – the list is endless.
If University of Arkansas were not here, this area would have an entirely different landscape.
Go Hogs!
Read the entire 106-page report:
http://www.uark.edu/rd_vcad/economicImpact/rd_vcad/documents/The_Economic_Impact_of_the_University_of_Arkansas_Final_Version_for_Print.pdf
Sunday, October 11, 2009
Good Economic News in NW Arkansas
Some thoughts from the Arkansas Economic Issues Breakfast meeting I attended a few weeks ago on September 30…
First, at little background: This was the first in a semi-annual series bringing together Arkansas’s business, community, education and government leaders via video conferencing. There were people gathered in 7 locations, and speakers at three of them. In Fayetteville, the gathering was held at the Sam Walton School of Business at the U of A. The series is sponsored by Arkansas Business to promote economic development by disseminating high-quality information and analyses.
Governor Mike Beebe in Little Rock kicked off the event with good news: "We've added 22,000 new manufacturing jobs in the last 20 months.” Beebe also said we are on the brink of several non-U.S. companies coming to Arkansas.
The general consensus is that Arkansas has endured the recession considerably better than many states. Unemployment rates here never came close to double digits and the housing market did not suffer the huge declines seen elsewhere.
Kathy Deck, director of the University of Arkansas (Fayetteville) Center for Business and Economic Research, stated the recession is technically over, while at the same time acknowledging that the average consumer may not yet be ready to agree. People are still worried about the future in general and continue to be concerned about possibility of unemployment and the decline in value of homes and 401(k) retirement accounts.
On a scale of 1 to 5, with 1 being much better and 5 being much worse, the Fayetteville area's economic condition was ranked 2, which is better than all other areas in the state.
To summarize, NW Arkansas appears to have come through the recession better than the rest of the state and Arkansas, better than many other states.
However, there is always room for improvement. Highway construction, transportation, education, improving job skills, and business investment and expansion are at the top of everyone’s list. Other concerns include the overbuilt real estate market and health care.
For more information:
http://www.arkansasbusiness.com/printable.asp?aid=117380
First, at little background: This was the first in a semi-annual series bringing together Arkansas’s business, community, education and government leaders via video conferencing. There were people gathered in 7 locations, and speakers at three of them. In Fayetteville, the gathering was held at the Sam Walton School of Business at the U of A. The series is sponsored by Arkansas Business to promote economic development by disseminating high-quality information and analyses.
Governor Mike Beebe in Little Rock kicked off the event with good news: "We've added 22,000 new manufacturing jobs in the last 20 months.” Beebe also said we are on the brink of several non-U.S. companies coming to Arkansas.
The general consensus is that Arkansas has endured the recession considerably better than many states. Unemployment rates here never came close to double digits and the housing market did not suffer the huge declines seen elsewhere.
Kathy Deck, director of the University of Arkansas (Fayetteville) Center for Business and Economic Research, stated the recession is technically over, while at the same time acknowledging that the average consumer may not yet be ready to agree. People are still worried about the future in general and continue to be concerned about possibility of unemployment and the decline in value of homes and 401(k) retirement accounts.
On a scale of 1 to 5, with 1 being much better and 5 being much worse, the Fayetteville area's economic condition was ranked 2, which is better than all other areas in the state.
To summarize, NW Arkansas appears to have come through the recession better than the rest of the state and Arkansas, better than many other states.
However, there is always room for improvement. Highway construction, transportation, education, improving job skills, and business investment and expansion are at the top of everyone’s list. Other concerns include the overbuilt real estate market and health care.
For more information:
http://www.arkansasbusiness.com/printable.asp?aid=117380
Monday, February 26, 2007
More Tax Cuts for Arkansans
In addition to the state’s largest tax cut in history (reducing the sales tax on groceries by 50%) more good news arrived this week on a variety of tax cuts. These measures are designed to boost the economy, make Arkansas more attractive to business and retirees who carefully study tax implications before moving to a new state, and help many of our most vulnerable residents.
Increase in Homestead Tax Credit Becomes Law
An increase of $50 in the homestead tax credit was signed into law. Currently, homeowners in Arkansas are eligible for a credit of up to $300 on taxes for their principal residence. The new maximum credit of $350 will become effective with the 2007 assessment year and will appear on property tax bills in 2008.
There are approximately 696,000 homesteads in Arkansas and it is expected that about 538,000 homesteads will we benefit from some or all of the additional $50 tax credit.
The homestead tax credits are financed by a one-half percent sales tax collected by the state, which, in turn, reimburses the counties for the property taxes they did not collect because of the tax credits. According to the state finance department, a $60 million balance was on hand at the end of last year. Governor Beebe has stated, “We were able to determine that we could conservatively and reasonably [increase the credit] and still be sound going into the future.”
Income Tax Cuts for Working Poor Move Closer
It looks like state income tax cuts for low-income people are on the horizon. The House tax committee has endorsed a bill that would exempt approximately 62,000 Arkansans from paying state income tax.
In its current form, the bill would eliminate the following groups from state income tax:
Single people with an annual gross income tax (AGI) of less than $10,200;
Married couples filing jointly with less than two dependents and AGI less than $17,200;
Married couples filing jointly with two or more dependents and AGI less than $20,700;
Head of Household filers with AGI less than $13,700.
Arkansans with income above the federal poverty level but less than 33% above it would receive tax credits to partially offset state income tax. The state finance department estimates 89,000 taxpayers would be eligible for these credits.
This is a step in the right direction. Just imagine a family of four (or more) trying to make ends meet on less than $20,700 a year. If this bill becomes law, it would provide tax relief for people in low-paying jobs and cut the workload at the Department of Revenue at the same time.
A Bill Advances to Equalize Taxes on Military Officers and Enlisted Personnel
Under existing law, enlisted military personnel do not pay state income tax on the first $9,000 of pay. However, officers are taxed on all military pay over $6,000.
The $3,000 difference seems strange to me and apparently to Rep. Sandra Prater, D-Jacksonville, as well. She has introduced a bill that would make the first $9,000 of military pay exempt from state income tax, regardless of rank. The bill passed the House and Senate and has been sent to the Governor.
Reducing Sales Taxes on Utilities Paid by Manufacturers
Bills to reduce the sales tax that manufacturers pay on natural gas and electricity seem to be sailing through the legislature. If signed into law as expected, the sales tax paid on utilities used by manufacturers would decrease from 6% to 4.5% on July 1, 2007. Another scheduled decrease would drop the tax to 4% on July 1, 2008.
State officials say the decreases will reduce state revenue by $20.2 million next fiscal year and $30.5 million the next year.
Perhaps your first reaction to this news might be “What about the taxes I pay on utilities? I’d like to pay less, too.” But the situation bears a closer look.
Arkansas needs to retain the industry it has while at the same time it must recruit more economic development to the state. The 6% sales tax on utilities puts Arkansas at a disadvantage. Most of the neighboring states charge manufacturers lower or even zero sales tax on utilities.
The Arkansas Chamber of Commerce is a strong advocate of this tax cut. If it passes, Arkansas will be in a more favorable position to recruit new employers. Arkansas is still trying to land a huge Toyota plant and there are other possibilities on the horizon.
I say go for it - I’m tired of hearing about the ones that get away, especially now with the recent loss of manufacturing jobs in this area.
For more information on these subjects:
http://www.nwanews.com/adg/National/182567/
http://www.nwaonline.net/articles/2007/02/22/topics/assembly07/022207lrlegpropertytax.txt
http://www.nwanews.com/story.php?paper=adg§ion=News&storyid=182003
http://www.nwanews.com/story.php?paper=adg§ion=National&storyid=182089
Increase in Homestead Tax Credit Becomes Law
An increase of $50 in the homestead tax credit was signed into law. Currently, homeowners in Arkansas are eligible for a credit of up to $300 on taxes for their principal residence. The new maximum credit of $350 will become effective with the 2007 assessment year and will appear on property tax bills in 2008.
There are approximately 696,000 homesteads in Arkansas and it is expected that about 538,000 homesteads will we benefit from some or all of the additional $50 tax credit.
The homestead tax credits are financed by a one-half percent sales tax collected by the state, which, in turn, reimburses the counties for the property taxes they did not collect because of the tax credits. According to the state finance department, a $60 million balance was on hand at the end of last year. Governor Beebe has stated, “We were able to determine that we could conservatively and reasonably [increase the credit] and still be sound going into the future.”
Income Tax Cuts for Working Poor Move Closer
It looks like state income tax cuts for low-income people are on the horizon. The House tax committee has endorsed a bill that would exempt approximately 62,000 Arkansans from paying state income tax.
In its current form, the bill would eliminate the following groups from state income tax:
Single people with an annual gross income tax (AGI) of less than $10,200;
Married couples filing jointly with less than two dependents and AGI less than $17,200;
Married couples filing jointly with two or more dependents and AGI less than $20,700;
Head of Household filers with AGI less than $13,700.
Arkansans with income above the federal poverty level but less than 33% above it would receive tax credits to partially offset state income tax. The state finance department estimates 89,000 taxpayers would be eligible for these credits.
This is a step in the right direction. Just imagine a family of four (or more) trying to make ends meet on less than $20,700 a year. If this bill becomes law, it would provide tax relief for people in low-paying jobs and cut the workload at the Department of Revenue at the same time.
A Bill Advances to Equalize Taxes on Military Officers and Enlisted Personnel
Under existing law, enlisted military personnel do not pay state income tax on the first $9,000 of pay. However, officers are taxed on all military pay over $6,000.
The $3,000 difference seems strange to me and apparently to Rep. Sandra Prater, D-Jacksonville, as well. She has introduced a bill that would make the first $9,000 of military pay exempt from state income tax, regardless of rank. The bill passed the House and Senate and has been sent to the Governor.
Reducing Sales Taxes on Utilities Paid by Manufacturers
Bills to reduce the sales tax that manufacturers pay on natural gas and electricity seem to be sailing through the legislature. If signed into law as expected, the sales tax paid on utilities used by manufacturers would decrease from 6% to 4.5% on July 1, 2007. Another scheduled decrease would drop the tax to 4% on July 1, 2008.
State officials say the decreases will reduce state revenue by $20.2 million next fiscal year and $30.5 million the next year.
Perhaps your first reaction to this news might be “What about the taxes I pay on utilities? I’d like to pay less, too.” But the situation bears a closer look.
Arkansas needs to retain the industry it has while at the same time it must recruit more economic development to the state. The 6% sales tax on utilities puts Arkansas at a disadvantage. Most of the neighboring states charge manufacturers lower or even zero sales tax on utilities.
The Arkansas Chamber of Commerce is a strong advocate of this tax cut. If it passes, Arkansas will be in a more favorable position to recruit new employers. Arkansas is still trying to land a huge Toyota plant and there are other possibilities on the horizon.
I say go for it - I’m tired of hearing about the ones that get away, especially now with the recent loss of manufacturing jobs in this area.
For more information on these subjects:
http://www.nwanews.com/adg/National/182567/
http://www.nwaonline.net/articles/2007/02/22/topics/assembly07/022207lrlegpropertytax.txt
http://www.nwanews.com/story.php?paper=adg§ion=News&storyid=182003
http://www.nwanews.com/story.php?paper=adg§ion=National&storyid=182089
Monday, February 19, 2007
What is the Economic Impact of Hispanic-Owned Businesses in NW Arkansas?
Seeing signs recently in Fayetteville about a Korean restaurant preparing to open triggered thoughts of the many small businesses in NW Arkansas owned and operated by immigrants.
Minority-owned businesses are nothing new, of course. They have been the backbone of America since immigrants first came to America. As the immigrant population grows throughout the U.S., so does the number of businesses owned by minorities.
According to a new study by the Center for an Urban Future, a New York City think tank, immigrants have been more likely to be self-employed than native-born residents in every U.S. census since 1880. Further, immigrant entrepreneurs have been an overlooked and little-understood piece of cities' economies. The research shows that more businesses are being started by foreign-born vs. native-born entrepreneurs in major cities, driving growth in sectors from food manufacturing to health care.
NW Arkansas mirrors the nationwide trend.
Benton County’s overall population grew by 22% in the five-year period 2000 to 2005. At the same time, the Hispanic population grew 78%, from slightly over 13,000 to nearly 24,000. Hispanic population in Washington County showed a slightly smaller percentage of increase, 73%, while the overall population increase in Washington County was 14%. Translating that to numbers means the Hispanic population grew from approximately 13,000 to more than 22,000. Certainly no other ethnic group comes close to such an increase in our area.
So, it’s no surprise to see to see more and more signs in Spanish while traveling in the two counties. There are restaurants, grocery stores, auto sales and repair shops, clothing stores, daycare centers, real estate agents, notaries public, Spanish-speaking radio stations and newspapers, and more.
For many immigrants, entrepreneurship is the best way to rise above a menial, low-paying. Immigrants are known for their willingness to work hard to obtain a brighter future for themselves and their children.
However, they face many significant roadblocks, notably the language barrier and lack of available business loans. Another problem stems from the perception of banks and chambers of commerce the immigrants brought with them from their native lands.
It sometimes takes years for immigrants to feel secure enough to divulge business and personal information to banks. Many immigrants do not comprehend what a banker means when asked about their “business plan.” Their plan is to join with family members and work long, hard hours.
There is no doubt that minority-owned businesses contribute greatly to our local economy but the amount of the impact is difficult to determine. No one in NW Arkansas has made a thorough study. Some area chambers of commerce are reaching out to the Hispanic community, as are some banks. However, a comprehensive study is lacking.
The cost of such a study is the biggest obstacle. The Skyline Report, an economic summary of the real estate market in NW Arkansas which I frequently mention in my blog, is prepared for Arvest Bank by the Center for Business and Economic Research of the Sam Walton School of Business at the University of Arkansas. I’ve read estimates that the Skyline Report costs $250,000 annually. While certainly expensive, this comprehensive analysis is extremely useful for measuring the real estate market.
I believe the economic impact of Hispanic-owned businesses is being overlooked at best and ignored at worst. It is time for a thorough study of their importance in NW Arkansas.
The Hispanic population is the largest minority group in NW Arkansas and the U.S. There is no sense in burying our heads in the sand any longer; Hispanics, as well as other ethnic groups, are here to stay.
Perhaps one of the banks could see the benefits of such a study or area chambers of commerce could join together to fund an analysis. It needs to be done.
For more information:
http://www.nwanews.com/story.php?paper=adg§ion=Special&storyid=180945
http://www.hispanicbusiness.com/news/newsbyid.asp?id=55217
http://www.boston.com/news/local/massachusetts/articles/2006/09/17/
immigrant_businesses_transform_us_neighborhoods/?rss_id=Boston.com
+--+Massachusetts+news (copy and paste this entire link to read the article)
Minority-owned businesses are nothing new, of course. They have been the backbone of America since immigrants first came to America. As the immigrant population grows throughout the U.S., so does the number of businesses owned by minorities.
According to a new study by the Center for an Urban Future, a New York City think tank, immigrants have been more likely to be self-employed than native-born residents in every U.S. census since 1880. Further, immigrant entrepreneurs have been an overlooked and little-understood piece of cities' economies. The research shows that more businesses are being started by foreign-born vs. native-born entrepreneurs in major cities, driving growth in sectors from food manufacturing to health care.
NW Arkansas mirrors the nationwide trend.
Benton County’s overall population grew by 22% in the five-year period 2000 to 2005. At the same time, the Hispanic population grew 78%, from slightly over 13,000 to nearly 24,000. Hispanic population in Washington County showed a slightly smaller percentage of increase, 73%, while the overall population increase in Washington County was 14%. Translating that to numbers means the Hispanic population grew from approximately 13,000 to more than 22,000. Certainly no other ethnic group comes close to such an increase in our area.
So, it’s no surprise to see to see more and more signs in Spanish while traveling in the two counties. There are restaurants, grocery stores, auto sales and repair shops, clothing stores, daycare centers, real estate agents, notaries public, Spanish-speaking radio stations and newspapers, and more.
For many immigrants, entrepreneurship is the best way to rise above a menial, low-paying. Immigrants are known for their willingness to work hard to obtain a brighter future for themselves and their children.
However, they face many significant roadblocks, notably the language barrier and lack of available business loans. Another problem stems from the perception of banks and chambers of commerce the immigrants brought with them from their native lands.
It sometimes takes years for immigrants to feel secure enough to divulge business and personal information to banks. Many immigrants do not comprehend what a banker means when asked about their “business plan.” Their plan is to join with family members and work long, hard hours.
There is no doubt that minority-owned businesses contribute greatly to our local economy but the amount of the impact is difficult to determine. No one in NW Arkansas has made a thorough study. Some area chambers of commerce are reaching out to the Hispanic community, as are some banks. However, a comprehensive study is lacking.
The cost of such a study is the biggest obstacle. The Skyline Report, an economic summary of the real estate market in NW Arkansas which I frequently mention in my blog, is prepared for Arvest Bank by the Center for Business and Economic Research of the Sam Walton School of Business at the University of Arkansas. I’ve read estimates that the Skyline Report costs $250,000 annually. While certainly expensive, this comprehensive analysis is extremely useful for measuring the real estate market.
I believe the economic impact of Hispanic-owned businesses is being overlooked at best and ignored at worst. It is time for a thorough study of their importance in NW Arkansas.
The Hispanic population is the largest minority group in NW Arkansas and the U.S. There is no sense in burying our heads in the sand any longer; Hispanics, as well as other ethnic groups, are here to stay.
Perhaps one of the banks could see the benefits of such a study or area chambers of commerce could join together to fund an analysis. It needs to be done.
For more information:
http://www.nwanews.com/story.php?paper=adg§ion=Special&storyid=180945
http://www.hispanicbusiness.com/news/newsbyid.asp?id=55217
http://www.boston.com/news/local/massachusetts/articles/2006/09/17/
immigrant_businesses_transform_us_neighborhoods/?rss_id=Boston.com
+--+Massachusetts+news (copy and paste this entire link to read the article)
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
Wednesday, January 31, 2007
Economic Forecast for Northwest Arkansas
I attended the Business Forecast 2007 luncheon January 26th, which is presented annually by the Center for Business and Economic Research at the U of A Sam M. Walton College of Business. Once again, NW Arkansas outshines the rest of the state in almost every aspect one might consider.
Three top economic forecasters presented their vision of the world, national, and state/ regional economies.
Here is a summary of the NW Arkansas information I took away from the meeting:
Arkansas in general conforms closely to the national economy, but NW Arkansas far surpasses the rest of the state.
The key point of Arkansas Bankers Association Chairman and UA Associate Professor of Finance Timothy J. Yeager is that NW Arkansas has been the main economic driver for the entire state and this will continue into the foreseeable future.
Arkansas has three main economies – Little Rock/North Little Rock Metropolitan Statistical Area, the Fort Smith MSA and the Fayetteville-Springdale-Rogers MSA, which includes Bentonville plus McDonald County, Missouri.
Although a loss of manufacturing jobs slowed the state’s overall economy in 2006, the state is expected to closely echo the economic growth of the country during 2007 with some variations in regional performance.
NW Arkansas created 62,400 new jobs in 2006, or 61% of all the new jobs created in the state. Little Rock created 36,500 jobs, or 35% of the total. The rest of the state saw only 4,000 jobs created, or 4% of the total.
The Fort Smith area is suffering greatly due to the loss of manufacturing jobs, which are being out-sourced to other countries.
The main negative in NW Arkansas is the oversupply of new homes available. However, NW Arkansas remains recession-proof despite the housing slowdown. People are still moving here at the rate of some 1,100 people per month which means the homes will be absorbed--it will just take a year or possibly longer. “Housing will not take Northwest Arkansas off track” said Yeager.
All in all, an excellent forecast for NW Arkansas.
For more information:
http://www.nwanews.com/adg/Business/180090/
Three top economic forecasters presented their vision of the world, national, and state/ regional economies.
Here is a summary of the NW Arkansas information I took away from the meeting:
Arkansas in general conforms closely to the national economy, but NW Arkansas far surpasses the rest of the state.
The key point of Arkansas Bankers Association Chairman and UA Associate Professor of Finance Timothy J. Yeager is that NW Arkansas has been the main economic driver for the entire state and this will continue into the foreseeable future.
Arkansas has three main economies – Little Rock/North Little Rock Metropolitan Statistical Area, the Fort Smith MSA and the Fayetteville-Springdale-Rogers MSA, which includes Bentonville plus McDonald County, Missouri.
Although a loss of manufacturing jobs slowed the state’s overall economy in 2006, the state is expected to closely echo the economic growth of the country during 2007 with some variations in regional performance.
NW Arkansas created 62,400 new jobs in 2006, or 61% of all the new jobs created in the state. Little Rock created 36,500 jobs, or 35% of the total. The rest of the state saw only 4,000 jobs created, or 4% of the total.
The Fort Smith area is suffering greatly due to the loss of manufacturing jobs, which are being out-sourced to other countries.
The main negative in NW Arkansas is the oversupply of new homes available. However, NW Arkansas remains recession-proof despite the housing slowdown. People are still moving here at the rate of some 1,100 people per month which means the homes will be absorbed--it will just take a year or possibly longer. “Housing will not take Northwest Arkansas off track” said Yeager.
All in all, an excellent forecast for NW Arkansas.
For more information:
http://www.nwanews.com/adg/Business/180090/
Saturday, October 21, 2006
More Options for NW Arkansas Sports Fans
The City of Bentonville had big plans for a new sports arena. It recently outlined plans for City West, a 90-acre mixed-use development that city leaders hoped would be developed in the western section of the city.
It sounded great – in addition to a 9,000-seat sports and entertainment arena, the complex would also have had a bowling alley, a multi-screen movie complex, and a movie and sound studio. Hotels, office, retail and residential spaces would have completed the complex when it was built out.
Everything changed October 19th when the Rogers City Council announced the sports arena would be built in their city near I-540 and Pleasant Crossing. Seems the distance from I-540 and lack of infrastructure (mainly roads) were the deciding factors in moving the development from Bentonville to Rogers.
The name has also changed. It will be known as the Northwest Arkansas Sports and Entertainment Arena.
Talk has already started about bringing a WNBA team to the new arena. The plans for the arena are basically the same as before: 9,000 seats and forty luxury boxes. The project will include a training center, as well as two hotels and various commercial and retail businesses.
Site work is expected to begin in four to six weeks with a projected completion date of Sept. 15, 2008.
Meanwhile, the City of Springdale has formally signed a contract to bring Double-A baseball to the stadium it plans to build in southwest Springdale. The Kansas City Royals’ farm team of the Texas League, currently known as the Wichita Wranglers, will be renamed and call Springdale home when the 2008 season starts.
For more background on the baseball stadium in Springdale, please read my blog article dated July 21, 2006.
Both projects are huge undertakings and are sure to spur even more economic development in our area.
For more information:
http://www.nwanews.com/story.php?paper=bcdr§ion=News&storyid=39468
http://ww .nwaonline.net/articles/2006/09/27/news/092806szrichvisit.txt
http://www.nwanews.com/bcdr/News/41098/
It sounded great – in addition to a 9,000-seat sports and entertainment arena, the complex would also have had a bowling alley, a multi-screen movie complex, and a movie and sound studio. Hotels, office, retail and residential spaces would have completed the complex when it was built out.
Everything changed October 19th when the Rogers City Council announced the sports arena would be built in their city near I-540 and Pleasant Crossing. Seems the distance from I-540 and lack of infrastructure (mainly roads) were the deciding factors in moving the development from Bentonville to Rogers.
The name has also changed. It will be known as the Northwest Arkansas Sports and Entertainment Arena.
Talk has already started about bringing a WNBA team to the new arena. The plans for the arena are basically the same as before: 9,000 seats and forty luxury boxes. The project will include a training center, as well as two hotels and various commercial and retail businesses.
Site work is expected to begin in four to six weeks with a projected completion date of Sept. 15, 2008.
Meanwhile, the City of Springdale has formally signed a contract to bring Double-A baseball to the stadium it plans to build in southwest Springdale. The Kansas City Royals’ farm team of the Texas League, currently known as the Wichita Wranglers, will be renamed and call Springdale home when the 2008 season starts.
For more background on the baseball stadium in Springdale, please read my blog article dated July 21, 2006.
Both projects are huge undertakings and are sure to spur even more economic development in our area.
For more information:
http://www.nwanews.com/story.php?paper=bcdr§ion=News&storyid=39468
http://ww .nwaonline.net/articles/2006/09/27/news/092806szrichvisit.txt
http://www.nwanews.com/bcdr/News/41098/
Sunday, July 09, 2006
Condo Mania in NW Arkansas--How Many is Too Many?
The debate has now been settled over whether the Divinity Hotel and Condos project can become reality. The newly-approved Divinity development has roused much controversy because of its size and scale in comparison to existing buildings in central Fayetteville. Its plans call for 30 condos and 137 hotel rooms above commercial space and restaurants.
A few years ago there wasn't a condo for sale in Fayetteville but that changed rapidly as developers began turning everything available into condos in central Fayetteville.
With the new mixed-use zoning plan expected to be approved soon, city planners anticipate turning Fayetteville into a "real city" with shops and commercial entities on the first floors of some of the new construction buildings, with condos upstairs.
There is already one large building under construction behind Dickson Street, and many older buildings have been already turned into condos, including the UArk Bowl, St. Joseph's Catholic Church and School, and others in the Dickson Street area.
Thanks in part to tax incremental financing (TIF), the abandoned Mountain Inn has been demolished and a new building has been approved for the site, conforming to the city's new guidelines. It will be known as the Renaissance building and its 18 stories will house a Marriott Hotel and condos.
The 9-story Lofts at Underwood Plaza is another new condo project located right on the square in Fayetteville. And the Legacy building is already underway, bringing 37 new condos to the Dickson Street area.
In addition, an apartment complex behind the NW Arkansas Mall (formerly Bristol Gardens, now called the Reserve at Steele Crossing) has gone through a condo-conversion and sales are underway. And there are new condos on Zion Road east of the mall for sale.
The problem is that land prices, especially in town, have risen so high that these condos are undoubtedly for an affluent group of people. The latest project to come before city planners calls for 20 condos, retail space and parking on a piece of land that is less than 1 acre in size. The land and existing building, which will be demolished, sold this year for $980,000.
Condos currently on the market in central Fayetteville are listed at close to $200 per square foot—certainly not for the average working person. Granted, many retirees who might be downsizing may have the money to pay these prices, as may some young, well-paid professionals who want to be within walking distance of restaurants and nightlife on Dickson Street.
I'm not arguing with the concept proposed by the planning commission--a vibrant center city where commercial entities are within walking distance. It's just that it seems that no one has asked the question, "will there be too many condos as a result"? Can Fayetteville's population absorb this large number of expensive multi-family units downtown?
A similar pattern is occurring in Benton County. Many condo complexes are being constructed in Rogers, and a development calling for three 15-story condos has been proposed for the shores of Beaver Lake. Much opposition has occurred for this project, leading to a question about what kind of development should occur near the lake.
A lesson could be learned from the folks in the Lake Tahoe area back in the 70s and 80s as lakefront condos proliferated. The pristine natural beauty was destroyed in some places due to lakefront condo complexes.
If you are concerned about condos, building heights, lakefront development or any other aspect of life in NW Arkansas, I urge you to make your voice heard. Stay informed, go to meetings, and take a stand. Your opinion counts.
For more information:
http://www.nwarktimes.com/nwat/News/42328/
http://www.nwarktimes.com/nwat/News/41377/
http://www.nwanews.com/adg/Business_Matters/153398/
http://www.nwanews.com/nwat/News/42544/
http://www.nwarktimes.com/nwat/News/42366/
http://www.nwaonline.net/articles/2006/07/01/news/01bzcondosuit.txt
http://www.gill-law.com/assets/pdfs/Article_TIF%20Financing%2007%2008%2004.pdf#search='mountaininnfayetteville'
A few years ago there wasn't a condo for sale in Fayetteville but that changed rapidly as developers began turning everything available into condos in central Fayetteville.
With the new mixed-use zoning plan expected to be approved soon, city planners anticipate turning Fayetteville into a "real city" with shops and commercial entities on the first floors of some of the new construction buildings, with condos upstairs.
There is already one large building under construction behind Dickson Street, and many older buildings have been already turned into condos, including the UArk Bowl, St. Joseph's Catholic Church and School, and others in the Dickson Street area.
Thanks in part to tax incremental financing (TIF), the abandoned Mountain Inn has been demolished and a new building has been approved for the site, conforming to the city's new guidelines. It will be known as the Renaissance building and its 18 stories will house a Marriott Hotel and condos.
The 9-story Lofts at Underwood Plaza is another new condo project located right on the square in Fayetteville. And the Legacy building is already underway, bringing 37 new condos to the Dickson Street area.
In addition, an apartment complex behind the NW Arkansas Mall (formerly Bristol Gardens, now called the Reserve at Steele Crossing) has gone through a condo-conversion and sales are underway. And there are new condos on Zion Road east of the mall for sale.
The problem is that land prices, especially in town, have risen so high that these condos are undoubtedly for an affluent group of people. The latest project to come before city planners calls for 20 condos, retail space and parking on a piece of land that is less than 1 acre in size. The land and existing building, which will be demolished, sold this year for $980,000.
Condos currently on the market in central Fayetteville are listed at close to $200 per square foot—certainly not for the average working person. Granted, many retirees who might be downsizing may have the money to pay these prices, as may some young, well-paid professionals who want to be within walking distance of restaurants and nightlife on Dickson Street.
I'm not arguing with the concept proposed by the planning commission--a vibrant center city where commercial entities are within walking distance. It's just that it seems that no one has asked the question, "will there be too many condos as a result"? Can Fayetteville's population absorb this large number of expensive multi-family units downtown?
A similar pattern is occurring in Benton County. Many condo complexes are being constructed in Rogers, and a development calling for three 15-story condos has been proposed for the shores of Beaver Lake. Much opposition has occurred for this project, leading to a question about what kind of development should occur near the lake.
A lesson could be learned from the folks in the Lake Tahoe area back in the 70s and 80s as lakefront condos proliferated. The pristine natural beauty was destroyed in some places due to lakefront condo complexes.
If you are concerned about condos, building heights, lakefront development or any other aspect of life in NW Arkansas, I urge you to make your voice heard. Stay informed, go to meetings, and take a stand. Your opinion counts.
For more information:
http://www.nwarktimes.com/nwat/News/42328/
http://www.nwarktimes.com/nwat/News/41377/
http://www.nwanews.com/adg/Business_Matters/153398/
http://www.nwanews.com/nwat/News/42544/
http://www.nwarktimes.com/nwat/News/42366/
http://www.nwaonline.net/articles/2006/07/01/news/01bzcondosuit.txt
http://www.gill-law.com/assets/pdfs/Article_TIF%20Financing%2007%2008%2004.pdf#search='mountaininnfayetteville'
Saturday, April 29, 2006
Arkansas Increases Minimum Wage
When Arkansas enacted legislation recently increasing the minimum wage from $5.15 to $6.25 per hour, it seemed everyone I talked with had an opinion of the benefits or the negative repercussions of such a move.
I’m going to pass along some of the comments, but first some facts:
Some of our neighboring states, namely Texas, Oklahoma, and Missouri, have done nothing to increase the minimum wage in their states above the Federal minimum of $5.15. Other neighbors – Tennessee, Louisiana, and Mississippi - don’t even have a minimum wage law. Kansas is the only state below the Federal minimum – a miniscule $2.65.
About half the states have minimum wage rates the same as the Federal rate. The state of Washington is currently the highest at $7.63 and that amount will increase periodically because it is pegged to inflation. Most of California is set at $6.75 but in the San Francisco area, it is $8.50. Minnesota is $6.15, Illinois $6.50, Massachusetts and New York are $6.75, and Oregon $7.50. The other states have rates between Washington’s and the Federal rate of $5.15.
Now for a sampling of the conflicting comments:
“Increasing the minimum wage will increase inflation and unemployment.”
“This will help the poorest paid workers in our state.”
“This will help the economy by giving workers more disposable income.”
“It will be harder for young people to find a job.”
Arkansas’ $1.10 increase becomes effective October 1, 2006. Only time will prove the whether the effects of this increase are beneficial or detrimental.
Click Comments below to let us know your thoughts.
For more information:
http://www.dol.gov/esa/minwage/america.htm
http://en.wikipedia.org/wiki/Minimum_wage
http://www.stateaction.org/blog/?p=140
I’m going to pass along some of the comments, but first some facts:
Some of our neighboring states, namely Texas, Oklahoma, and Missouri, have done nothing to increase the minimum wage in their states above the Federal minimum of $5.15. Other neighbors – Tennessee, Louisiana, and Mississippi - don’t even have a minimum wage law. Kansas is the only state below the Federal minimum – a miniscule $2.65.
About half the states have minimum wage rates the same as the Federal rate. The state of Washington is currently the highest at $7.63 and that amount will increase periodically because it is pegged to inflation. Most of California is set at $6.75 but in the San Francisco area, it is $8.50. Minnesota is $6.15, Illinois $6.50, Massachusetts and New York are $6.75, and Oregon $7.50. The other states have rates between Washington’s and the Federal rate of $5.15.
Now for a sampling of the conflicting comments:
“Increasing the minimum wage will increase inflation and unemployment.”
“This will help the poorest paid workers in our state.”
“This will help the economy by giving workers more disposable income.”
“It will be harder for young people to find a job.”
Arkansas’ $1.10 increase becomes effective October 1, 2006. Only time will prove the whether the effects of this increase are beneficial or detrimental.
Click Comments below to let us know your thoughts.
For more information:
http://www.dol.gov/esa/minwage/america.htm
http://en.wikipedia.org/wiki/Minimum_wage
http://www.stateaction.org/blog/?p=140
Saturday, April 01, 2006
Immigration Reform Protests and NW Arkansas
The massive demonstrations by Hispanics throughout the nation on the issue of immigration reform are a demonstration that this growing segment of the population may finally be coming of age politically. There have been immigration reform bills in the past, but the public outpouring by the Hispanic community has never been so great. There were no protests here in NW Arkansas, but the effect of the protests may eventually be felt here.
Immigration of people from other nations and cultures are what has made the US a great and dynamic nation, and although laws are necessary, I don't think they should be racist and restrictive. As the granddaughter of immigrants from Finland and Sweden, I have experienced first hand how people from other nations make our own nation stronger. The strong work ethic and emphasis on education made the northeastern Minnesota area where I grew up a dynamic community of many cultures where education was prized. Our public schools there were far superior to those in other parts of the state until the mining boom there dissipated in the past 25 years or so. The desire to assimilate spurred the new citizens to raise their children to surpass their own educational and professional achievements and contribute to their communities in a positive manner. The original arrivals could not speak English when they arrived and most worked at menial jobs. Their children all spoke English, worked at better jobs than their parents had, and many encouraged their children, in turn, to obtain college educations to become professionals.
In the past, various ethnic groups have provided massive migrations to our shores. Many of these groups were discriminated against when they first arrived, but now they have become part of the fabric of our nation. The Irish and Italians who arrived in the late 19th and early 20th century are typical of this pattern. Many of the Irish became policemen in the Eastern cities where they settled. And in NW Arkansas the Italians who settled here have created traditions which continue to enrich the area culture and economy (for example, the Tontitown Grape Festival, restaurants, and home-grown industries), even as their children and grandchildren have assimilated and prospered.
For northwest Arkansas, the continued development of the area depends on immigrants. Our area is in a new initial phase of the typical immigration pattern for newly arrived groups. There are increasing numbers of Asians and Pacific Islanders as well as Hispanics moving to the area. Many of the latter are first generation arrivals who don't speak much English. Some are illegal. But their children all attend our public schools and enrich the cultural environment, enhancing the world view of the native Arkansan children. With time these families will assimilate, just as previous generations have done. And our area will be richer for their presence.
The economy of our area also depends on these new arrivals. Much of the new construction of area housing, as well as factory jobs, is made possible by these new arrivals. Many builders now prefer Hispanic crews--they work hard and they take pride in their work, creating beautiful homes for residents and others who are relocating here because of Wal-mart and other major businesses in the area. Many of these new immigrants also work in jobs--for example, in the poultry plants--that local people do not want. They pay taxes and pay into the social security system, helping to assure that when baby boomers and even their children retire, there will be money for the system to be able to pay social security benefits. Without them, our area would not be the driving economic engine that it is.
For additional information, see also:
http://immigration.about.com/b/a/255666.htm
http://www.msnbc.msn.com/id/10704013
http://www.cnn.com/2006/POLITICS/03/27/immigration.rallies.ap/
http://www.npr.org/templates/story/story.php?storyId=5308394&ft=1&f=1001
http://www.usimmigrationsupport.org/
http://teacher.scholastic.com/scholasticnews/news/article_thu.asp
Immigration of people from other nations and cultures are what has made the US a great and dynamic nation, and although laws are necessary, I don't think they should be racist and restrictive. As the granddaughter of immigrants from Finland and Sweden, I have experienced first hand how people from other nations make our own nation stronger. The strong work ethic and emphasis on education made the northeastern Minnesota area where I grew up a dynamic community of many cultures where education was prized. Our public schools there were far superior to those in other parts of the state until the mining boom there dissipated in the past 25 years or so. The desire to assimilate spurred the new citizens to raise their children to surpass their own educational and professional achievements and contribute to their communities in a positive manner. The original arrivals could not speak English when they arrived and most worked at menial jobs. Their children all spoke English, worked at better jobs than their parents had, and many encouraged their children, in turn, to obtain college educations to become professionals.
In the past, various ethnic groups have provided massive migrations to our shores. Many of these groups were discriminated against when they first arrived, but now they have become part of the fabric of our nation. The Irish and Italians who arrived in the late 19th and early 20th century are typical of this pattern. Many of the Irish became policemen in the Eastern cities where they settled. And in NW Arkansas the Italians who settled here have created traditions which continue to enrich the area culture and economy (for example, the Tontitown Grape Festival, restaurants, and home-grown industries), even as their children and grandchildren have assimilated and prospered.
For northwest Arkansas, the continued development of the area depends on immigrants. Our area is in a new initial phase of the typical immigration pattern for newly arrived groups. There are increasing numbers of Asians and Pacific Islanders as well as Hispanics moving to the area. Many of the latter are first generation arrivals who don't speak much English. Some are illegal. But their children all attend our public schools and enrich the cultural environment, enhancing the world view of the native Arkansan children. With time these families will assimilate, just as previous generations have done. And our area will be richer for their presence.
The economy of our area also depends on these new arrivals. Much of the new construction of area housing, as well as factory jobs, is made possible by these new arrivals. Many builders now prefer Hispanic crews--they work hard and they take pride in their work, creating beautiful homes for residents and others who are relocating here because of Wal-mart and other major businesses in the area. Many of these new immigrants also work in jobs--for example, in the poultry plants--that local people do not want. They pay taxes and pay into the social security system, helping to assure that when baby boomers and even their children retire, there will be money for the system to be able to pay social security benefits. Without them, our area would not be the driving economic engine that it is.
For additional information, see also:
http://immigration.about.com/b/a/255666.htm
http://www.msnbc.msn.com/id/10704013
http://www.cnn.com/2006/POLITICS/03/27/immigration.rallies.ap/
http://www.npr.org/templates/story/story.php?storyId=5308394&ft=1&f=1001
http://www.usimmigrationsupport.org/
http://teacher.scholastic.com/scholasticnews/news/article_thu.asp
Monday, March 06, 2006
A Western By-Pass? Great Idea!
Planners and elected officials in Northwest Arkansas are eyeing a four-lane highway to cut through western Benton and Washington counties and avoid additional gridlock on Interstate 540. It doesn’t have an exact location, nor money to pay for it--yet.
The Northwest Arkansas Council, which includes some of the region’s wealthiest and most influential people, has placed the proposed highway on its list of road projects it deems important to the region’s future. And a committee of the Northwest Arkansas Regional Planning Commission has included the highway, known as the western bypass, in the draft of a 2030 long-range transportation plan the commission will hand over to the Arkansas Highway and Transportation Department next month.
The proposed highway wouldn’t be constructed until after a western bypass of the Bella Vista stretch of I-540 and a U.S. 412 bypass north of Springdale are completed, according to John McLarty, the transportation planner for the regional planning commission. “But it’s not too early to begin planning the road.”
The western freeway is a great idea, and it’s encouraging to note that planners are starting to think in longer terms. It takes years to go from identifying the need to completing the project, and it is essential to get this project in place while there is still sufficient, undeveloped land available. The 412 bypass has been delayed again and again by impact studies while the areas where the original three proposed routes might have been built have been filled up with new homes. And since the 412 bypass won’t be built for many years due to funding deficits, maybe these planners can begin getting their proposal to legislators so that when the project is ready, the funding will be there.
In the meantime, there will have to be improvements and additions to I-540. Twenty-five years is a long time for the western bypass to become a reality. But knowing that planners are even thinking about it is a start.
For more information: http://nwanews.com/adg/News/147123/
The Northwest Arkansas Council, which includes some of the region’s wealthiest and most influential people, has placed the proposed highway on its list of road projects it deems important to the region’s future. And a committee of the Northwest Arkansas Regional Planning Commission has included the highway, known as the western bypass, in the draft of a 2030 long-range transportation plan the commission will hand over to the Arkansas Highway and Transportation Department next month.
The proposed highway wouldn’t be constructed until after a western bypass of the Bella Vista stretch of I-540 and a U.S. 412 bypass north of Springdale are completed, according to John McLarty, the transportation planner for the regional planning commission. “But it’s not too early to begin planning the road.”
The western freeway is a great idea, and it’s encouraging to note that planners are starting to think in longer terms. It takes years to go from identifying the need to completing the project, and it is essential to get this project in place while there is still sufficient, undeveloped land available. The 412 bypass has been delayed again and again by impact studies while the areas where the original three proposed routes might have been built have been filled up with new homes. And since the 412 bypass won’t be built for many years due to funding deficits, maybe these planners can begin getting their proposal to legislators so that when the project is ready, the funding will be there.
In the meantime, there will have to be improvements and additions to I-540. Twenty-five years is a long time for the western bypass to become a reality. But knowing that planners are even thinking about it is a start.
For more information: http://nwanews.com/adg/News/147123/
GROWTH - Outward or Upward?
OUTWARD GROWTH is the current norm along the Interstate 540 corridor in Benton and Washington counties, and this worries some city planners and elected officials. They want to see developers build upward, filling in existing city space with denser developments such as multistory apartments.
Dense, upward development leads to more people living per square mile, less cost to the cities to provide water, roads and other services, and less need for outward development of rural land, said Steve Luoni, director of the Community Design Center in the School of Architecture of the University of Arkansas at Fayetteville.
But people have been slow to embrace UPWARD GROWTH according to Fayetteville’s Senior Planner Jeremy Pate, “It’s going to take a while to slow down outward development. People want to live at the end of a cul-de-sac.”
Developers say they are building houses outward from the cities instead of upward with denser apartments and condominiums because that’s what people want and that’s where they can make a profit. They built 36,201 new housing units in the four major cities from 1990 to 2004. About 63 percent of those were single-family dwellings, according to statistics from the Northwest Arkansas Regional Planning Commission.
“Primarily, that’s what the market demands. People don’t want ‘up’ — not around here,” said Gary Brandon, who is building several subdivisions on the western edge of the I-540 corridor, including one of 117 acres between Lowell and Cave Springs and another of 54 acres on the outskirts of Tontitown. “They’re not that keen on condos yet.”
Kathy Deck, associate director of the UA Center for Business and Economic Research, said the growing population will continue to demand homes on the outskirts of town. Condos will not appeal to families until the price of gasoline becomes too high or traffic becomes too congested to commute from outlying communities, she said.
Richard Alexander, a developer of condominiums and mixed-use buildings in central Fayetteville, would agree. He said his market is based on the downtown location of the projects and will appeal to people because they won’t have to drive to go shopping or to the university. “There is that niche looking for a lack of a commute,” said Alexander.
Even though cities are spreading, some officials say the finite supply of land and market forces eventually will make upward growth the norm in Northwest Arkansas. “Our land space is dwindling,” said Rogers Alderman Mark Kruger. “At some point we will run out of space, and up will be the only way to go.”
For more information: http://nwanews.com/adg/News/147079/
Dense, upward development leads to more people living per square mile, less cost to the cities to provide water, roads and other services, and less need for outward development of rural land, said Steve Luoni, director of the Community Design Center in the School of Architecture of the University of Arkansas at Fayetteville.
But people have been slow to embrace UPWARD GROWTH according to Fayetteville’s Senior Planner Jeremy Pate, “It’s going to take a while to slow down outward development. People want to live at the end of a cul-de-sac.”
Developers say they are building houses outward from the cities instead of upward with denser apartments and condominiums because that’s what people want and that’s where they can make a profit. They built 36,201 new housing units in the four major cities from 1990 to 2004. About 63 percent of those were single-family dwellings, according to statistics from the Northwest Arkansas Regional Planning Commission.
“Primarily, that’s what the market demands. People don’t want ‘up’ — not around here,” said Gary Brandon, who is building several subdivisions on the western edge of the I-540 corridor, including one of 117 acres between Lowell and Cave Springs and another of 54 acres on the outskirts of Tontitown. “They’re not that keen on condos yet.”
Kathy Deck, associate director of the UA Center for Business and Economic Research, said the growing population will continue to demand homes on the outskirts of town. Condos will not appeal to families until the price of gasoline becomes too high or traffic becomes too congested to commute from outlying communities, she said.
Richard Alexander, a developer of condominiums and mixed-use buildings in central Fayetteville, would agree. He said his market is based on the downtown location of the projects and will appeal to people because they won’t have to drive to go shopping or to the university. “There is that niche looking for a lack of a commute,” said Alexander.
Even though cities are spreading, some officials say the finite supply of land and market forces eventually will make upward growth the norm in Northwest Arkansas. “Our land space is dwindling,” said Rogers Alderman Mark Kruger. “At some point we will run out of space, and up will be the only way to go.”
For more information: http://nwanews.com/adg/News/147079/
Sunday, February 26, 2006
My Take on the New Millken Report (see below)
The new Millken Report has NW Arkansas continuing in the top 10 nationally as a vibrant economic zone. However, there were two areas of concern for possible future trends in the area: a low rating on technology output growth (a positive rating on this factor leads to higher paying professional and high-skill jobs) and increased housing values, which are now at the national average. The two trends, together with the strong job growth rating, points to a strong economy with low unemployment. But that job growth is and will continue to be of lower paying jobs which require less education. This, in my mind, hints at salaries for the average working person not keeping up with the cost of housing, thus creating a potential crisis in affordable housing.
When NW Arkansas topped the Millken Report a few years ago ahead of Las Vegas, the region catapulted to the top of the national radar in many respects. In the real estate market all of a sudden, in addition to local investors, there appeared investors from all over the country looking for “reasonable” investment property, beginning the upward exponential curve in prices for low-end homes and multi-family properties.
What happened was that many of the older existing homes, previously priced under $100K, began creeping upward in price as investors competed with first-time and low-income home buyers. Homes in that price range became smaller and shabbier as prices continued to rise significantly over the past couple of years. Now it is almost impossible to find a livable home for under $130K. Most homes in that price range either need work or are very small or both.
Sometimes these small fixer-uppers are even priced higher per square foot than nicer, larger homes. As recently as 3-4 years ago (before NW Arkansas was #1 according to the Millken Report), an older home in Springdale usually was listed for and sold for under $55 per square foot in the under $100K price range. Now these same homes—many in barely livable condition—are listed for and sell for over $85 per square foot. Some even sell for over $100 per square foot if they are in excellent condition.
On the other hand, larger, older homes in the $150K-$200K price range--completely remodeled--are being listed and sold at between $75 and $85 per square foot. But a home like this is not a suitable “rent house” and there is still a lot of building going on in this price range. The law of supply and demand applies here.
A contributing factor is that because of escalating land prices and higher construction and development costs, almost no builders are making small “starter” homes any more. As these costs increase, the new starter homes are now larger than they were previously, but they also have significantly higher price tags. It is no longer possible to acquire a home like this for under $100K, whereas about 3-4 years ago there were several builders offering such new homes as low as $75K. But such homes are also great rent houses. With the increased competition from investors as well as the lack of construction of new homes at affordable prices, first-time and low-income home buyers are having a tougher time finding adequate housing.
Even rental prices are rising as a result. In 2002 an average newer duplex with 3 bedrooms on each side in east Springdale was listed and sold for about $120K or less, depending on condition. Rents for those duplexes were about $550-$575. Now rents have risen to between $600-$650 for those units, and those same duplexes are listed for sale at $175K or above and selling for a minimum of $165K. Even some 2-bedroom units are selling for $165K. And the new duplexes being built are listed at $200K or above. Supposedly these can be rented at $850 per side per month, but I wonder….
In any case, because home prices on the low end and multi-family properties are now so expensive due to increased demand and low supply, rents are also rising as units are sold.
Is affordable housing in NW Arkansas a thing of the past? I hope not.
When NW Arkansas topped the Millken Report a few years ago ahead of Las Vegas, the region catapulted to the top of the national radar in many respects. In the real estate market all of a sudden, in addition to local investors, there appeared investors from all over the country looking for “reasonable” investment property, beginning the upward exponential curve in prices for low-end homes and multi-family properties.
What happened was that many of the older existing homes, previously priced under $100K, began creeping upward in price as investors competed with first-time and low-income home buyers. Homes in that price range became smaller and shabbier as prices continued to rise significantly over the past couple of years. Now it is almost impossible to find a livable home for under $130K. Most homes in that price range either need work or are very small or both.
Sometimes these small fixer-uppers are even priced higher per square foot than nicer, larger homes. As recently as 3-4 years ago (before NW Arkansas was #1 according to the Millken Report), an older home in Springdale usually was listed for and sold for under $55 per square foot in the under $100K price range. Now these same homes—many in barely livable condition—are listed for and sell for over $85 per square foot. Some even sell for over $100 per square foot if they are in excellent condition.
On the other hand, larger, older homes in the $150K-$200K price range--completely remodeled--are being listed and sold at between $75 and $85 per square foot. But a home like this is not a suitable “rent house” and there is still a lot of building going on in this price range. The law of supply and demand applies here.
A contributing factor is that because of escalating land prices and higher construction and development costs, almost no builders are making small “starter” homes any more. As these costs increase, the new starter homes are now larger than they were previously, but they also have significantly higher price tags. It is no longer possible to acquire a home like this for under $100K, whereas about 3-4 years ago there were several builders offering such new homes as low as $75K. But such homes are also great rent houses. With the increased competition from investors as well as the lack of construction of new homes at affordable prices, first-time and low-income home buyers are having a tougher time finding adequate housing.
Even rental prices are rising as a result. In 2002 an average newer duplex with 3 bedrooms on each side in east Springdale was listed and sold for about $120K or less, depending on condition. Rents for those duplexes were about $550-$575. Now rents have risen to between $600-$650 for those units, and those same duplexes are listed for sale at $175K or above and selling for a minimum of $165K. Even some 2-bedroom units are selling for $165K. And the new duplexes being built are listed at $200K or above. Supposedly these can be rented at $850 per side per month, but I wonder….
In any case, because home prices on the low end and multi-family properties are now so expensive due to increased demand and low supply, rents are also rising as units are sold.
Is affordable housing in NW Arkansas a thing of the past? I hope not.
Expanded Region Slips to 8th Place in Milken Rating
Northwest Arkansas’ slip from No. 7 to No. 8 in the Milken Institute’s rating of the nation’s most vibrant economies for 2005 is a cause for celebration rather than concern, state economists say.
In the rankings released February 22, the Fayetteville-Springdale-Rogers Metropolitan Statistical Area (MSA), which includes Bentonville, ranked in the top 10 of the largest 200 cities for the third year in a row. The area made the No. 1 spot in 2003, then dropped to No. 7 in 2004. In 2002, the MSA ranked 23 rd in the top cities list.
The nonprofit Santa Monica, Calif.-based think tank ranks the nation’s metropolitan statistical areas for the best overall economies each year. Researchers base the rankings on several criteria, including job and wage and salary growth over the past five years. The institute helps business and public policy leaders identify and implement innovative ideas for creating broad-based prosperity, according to its Web site.
Lorna Wallace, a Milken Institute research fellow and senior staff member, attributed the drop to No. 8 to the U. S. Census Bureau’s addition of Madison County and McDonald County, Mo., to the MSA. The two counties were not considered in the Milken study last year. The Milken Institute relies on the Census Bureau’s definition of metropolitan statistical areas for its study groupings.
“The Fayetteville-Springdale-Rogers MSA has a robust economy that outshines the rest of the state and most of the country,” Wallace said. “Its job growth rate by far exceeds the national pace.”
Wallace cited Bentonville-based Wal-Mart Stores Inc. ’s heavy influence on the regional economy for both positive and possible future negative factors. She also cited the presence of other national-level employers such as J. B. Hunt Transport Services Inc. and Tyson Foods Inc. and the University of Arkansas, a strong research university, as positives for the area.
The next-highest ranked larger metropolitan area in Arkansas was Little Rock-North Little Rock, ranked No. 94 overall and up from No. 106 in 2004. The city’s lowest sector ranking was in job growth, at No. 168 with 0. 24 percent. Fort Smith also ranked higher this year, moving up to No. 154 from No. 155 in 2004.
Three Arkansas MSAs were included in the Milken listing of the best 179 small cities. Hot Springs was ranked at No. 69. It was not ranked in 2004. Jonesboro ranked No. 99, down from No. 64 in 2004. Pine Bluff was ranked at No. 144, down from No. 94 in 2004.
Mitch Chandler, director of communications for the Arkansas Department of Economic Development, said Northwest Arkansas ’ ranking for the third year shows that the area’s growth is a proven trend. “This shows the phenomenal and consistent growth of the area.” he said.
Job and wage growth are the strongest contributors to the listing, said Jeff Collins, director of the Center for Business and Economic Research at the Sam M. Walton College of Business.
The Walton College is part of the University of Arkansas at Fayetteville. “Job and wage growth is a 15- to 20-year trend, not a one- to two-year trend,” Collins said. “Given that this measures the entire country on the same data, it gives a lot of validation to be listed in the top 10 from year to year.” He predicts that the region will continue to do well with those growth drivers in place. The region scored its highest ranking in the five-year wage and salary growth category, taking the No. 3 spot. It was ranked 14th in one-year wage and salary growth. The five-year job growth ranking was 7th and the one-year job growth was ranked 23 rd.
WEAKEST LINK:
The region’s lowest ranking — No. 154 — was in the area of technology output growth. Collins said the high-tech industry is one in which the state traditionally performs poorly. “Employment opportunities for Arkansas seem to be overly weighted to the lower educated and lower-paying jobs,” he said. And added that even the University of Arkansas ’ efforts to push technology-based business is not enough to push the state out of the lowest levels of technology development. “We still don’t attract a lot of research and development activity, which is the precursor to higher-wage industries,” Collins said. “The UA is still too small in this area. Larger universities can get concentrations of engineers and scientists who can cooperate and collaborate on research.”
HOUSING CONCERNS:
Milken’s Wallace also cited the increased housing values as a growth factor in the region, a positive indicator of the present economy but a possible future concern. “Housing rates and values are near the national level,” she said. “That may pose a risk going forward.” Unless other economic indexes also rise to the national level, increased interest rates or a slowing of the construction rate will influence the affordability of housing in the region. Collins said the housing component is a relatively small sector in the Milken Institute’s ranking data. “But there is some disconnect between supply and demand in housing,” he said. “While I have some concerns about segments in the market, there is still opportunity for growth and profit in housing after careful planning and consideration.” He said the national housing values really don’t contribute much to the local housing market. “The people who are moving in here and buying houses are already paying the national rates,” he said. “This doesn’t affect them.”
Condensed from: NWA News, Arkansas Democrat Gazette, February 23, 2006
In the rankings released February 22, the Fayetteville-Springdale-Rogers Metropolitan Statistical Area (MSA), which includes Bentonville, ranked in the top 10 of the largest 200 cities for the third year in a row. The area made the No. 1 spot in 2003, then dropped to No. 7 in 2004. In 2002, the MSA ranked 23 rd in the top cities list.
The nonprofit Santa Monica, Calif.-based think tank ranks the nation’s metropolitan statistical areas for the best overall economies each year. Researchers base the rankings on several criteria, including job and wage and salary growth over the past five years. The institute helps business and public policy leaders identify and implement innovative ideas for creating broad-based prosperity, according to its Web site.
Lorna Wallace, a Milken Institute research fellow and senior staff member, attributed the drop to No. 8 to the U. S. Census Bureau’s addition of Madison County and McDonald County, Mo., to the MSA. The two counties were not considered in the Milken study last year. The Milken Institute relies on the Census Bureau’s definition of metropolitan statistical areas for its study groupings.
“The Fayetteville-Springdale-Rogers MSA has a robust economy that outshines the rest of the state and most of the country,” Wallace said. “Its job growth rate by far exceeds the national pace.”
Wallace cited Bentonville-based Wal-Mart Stores Inc. ’s heavy influence on the regional economy for both positive and possible future negative factors. She also cited the presence of other national-level employers such as J. B. Hunt Transport Services Inc. and Tyson Foods Inc. and the University of Arkansas, a strong research university, as positives for the area.
The next-highest ranked larger metropolitan area in Arkansas was Little Rock-North Little Rock, ranked No. 94 overall and up from No. 106 in 2004. The city’s lowest sector ranking was in job growth, at No. 168 with 0. 24 percent. Fort Smith also ranked higher this year, moving up to No. 154 from No. 155 in 2004.
Three Arkansas MSAs were included in the Milken listing of the best 179 small cities. Hot Springs was ranked at No. 69. It was not ranked in 2004. Jonesboro ranked No. 99, down from No. 64 in 2004. Pine Bluff was ranked at No. 144, down from No. 94 in 2004.
Mitch Chandler, director of communications for the Arkansas Department of Economic Development, said Northwest Arkansas ’ ranking for the third year shows that the area’s growth is a proven trend. “This shows the phenomenal and consistent growth of the area.” he said.
Job and wage growth are the strongest contributors to the listing, said Jeff Collins, director of the Center for Business and Economic Research at the Sam M. Walton College of Business.
The Walton College is part of the University of Arkansas at Fayetteville. “Job and wage growth is a 15- to 20-year trend, not a one- to two-year trend,” Collins said. “Given that this measures the entire country on the same data, it gives a lot of validation to be listed in the top 10 from year to year.” He predicts that the region will continue to do well with those growth drivers in place. The region scored its highest ranking in the five-year wage and salary growth category, taking the No. 3 spot. It was ranked 14th in one-year wage and salary growth. The five-year job growth ranking was 7th and the one-year job growth was ranked 23 rd.
WEAKEST LINK:
The region’s lowest ranking — No. 154 — was in the area of technology output growth. Collins said the high-tech industry is one in which the state traditionally performs poorly. “Employment opportunities for Arkansas seem to be overly weighted to the lower educated and lower-paying jobs,” he said. And added that even the University of Arkansas ’ efforts to push technology-based business is not enough to push the state out of the lowest levels of technology development. “We still don’t attract a lot of research and development activity, which is the precursor to higher-wage industries,” Collins said. “The UA is still too small in this area. Larger universities can get concentrations of engineers and scientists who can cooperate and collaborate on research.”
HOUSING CONCERNS:
Milken’s Wallace also cited the increased housing values as a growth factor in the region, a positive indicator of the present economy but a possible future concern. “Housing rates and values are near the national level,” she said. “That may pose a risk going forward.” Unless other economic indexes also rise to the national level, increased interest rates or a slowing of the construction rate will influence the affordability of housing in the region. Collins said the housing component is a relatively small sector in the Milken Institute’s ranking data. “But there is some disconnect between supply and demand in housing,” he said. “While I have some concerns about segments in the market, there is still opportunity for growth and profit in housing after careful planning and consideration.” He said the national housing values really don’t contribute much to the local housing market. “The people who are moving in here and buying houses are already paying the national rates,” he said. “This doesn’t affect them.”
Condensed from: NWA News, Arkansas Democrat Gazette, February 23, 2006
Saturday, January 28, 2006
Business Forecast '06
On Friday, January 27, the 12th annual Business Forecast '06 luncheon was held at the Springdale Convention Center. Over 1000 local business people attended. Speakers addressed economic issues affecting not only NW Arkansas, but also the nation and the world.
Sponsored by the Center for Business and Economic Research of the Sam Walton College of Business at the University of Arkansas, the speakers included Dan Worrell, Dean of the Walton College of Business; Thomas "Mack" McLarty (former chief of staff for President Clinton), who introduced the panelists and served as moderator; Ellen Hughes-Cromwick, Chief Economist for Ford Motor Company; James Glassman, Managing Director and Senior Policy Strategist for JPMorgan Chase & Company; and Jeff Collins, Director of the Center for Business and Economic Research.
The general consensus among the panelists with regard to the economic forecast for the coming year was one of "cautious optimism." Ellen Hughes-Cromwick spoke on international trends, James Glassman on the US economy, and Jeff Collins on the state of Arkansas and the northwest region in particular. In response to a question from the audience on "what worries you?" each responded in turn: Hughes-Cromwick--energy markets and political instability in oil producing areas, Glass--the danger of protectionist policies which might be implemented by the US, and Collins--the eroding commitment to US innovation, research and development, which (in the past) has led to wealth creation.
With regard to the state of Arkansas as a whole, Jeff Collins discussed growth in different areas of the state, most of which is occuring in the Little Rock/Central Arkansas area and in NW Arkansas. However, the state is losing manufacturing jobs, which in the past have provided high pay, due to globalization. Although new jobs are being created at a steady pace, the majority of these are low-paying, low-skill jobs. Collins expressed the need for an educated work force which would allow for the creation of high-wage, high-skill jobs. 80% of the new jobs in the state during the past 10 years have been created in Northwest Arkansas and Little Rock--62% in NW Arkansas and 18% in central Arkansas.
Underlying economic trends in NW Arkansas and the central part of the state is increased urbanization, as well as a remarkable rate of population and employment growth. About 1000 people per month are moving to NW Arkansas while about 560 jobs are being created each month. The largest sector for job growth is natural resources, mining and construction.
As a side observation with regard to home construction, he noted that in NW Arkansas in the 2nd quarter of 2005, there were 13,000 lots actively being built upon with 12,000 more platted but not yet active. By the 3rd quarter of the year, there were 16,000 lots being built upon with 15,000 more platted but not yet active. This represents a gain of 5000 lots in only 3 months.
Collins observed that the state economy is dominated by low-wage, low-skill employment, making the current workforce in much of the state ill-equipped to compete in the global marketplace for high-wage, high-skill jobs. The initiative to bring an auto manufacturing plant to Arkansas, which is being discussed in the media, will temporarily forestall the erosion in manufacturing jobs, but he suggested that the auto plant would be like adding a bucket of water to a bathtub with a slow leak.
In summary, Collins stated that the challenge to Northwest Arkansas is to provide state leadership commensurate with the economic power held in the area. Increasingly the whole state depends on the economic development here. But there are obstacles to continued growth--in particular, lack of infrastructure (especially roads, water supply and wastewater treatment). The area must respond with cooperation across governmental organizational boundaries and a unified vision for the future of the area.
Sponsored by the Center for Business and Economic Research of the Sam Walton College of Business at the University of Arkansas, the speakers included Dan Worrell, Dean of the Walton College of Business; Thomas "Mack" McLarty (former chief of staff for President Clinton), who introduced the panelists and served as moderator; Ellen Hughes-Cromwick, Chief Economist for Ford Motor Company; James Glassman, Managing Director and Senior Policy Strategist for JPMorgan Chase & Company; and Jeff Collins, Director of the Center for Business and Economic Research.
The general consensus among the panelists with regard to the economic forecast for the coming year was one of "cautious optimism." Ellen Hughes-Cromwick spoke on international trends, James Glassman on the US economy, and Jeff Collins on the state of Arkansas and the northwest region in particular. In response to a question from the audience on "what worries you?" each responded in turn: Hughes-Cromwick--energy markets and political instability in oil producing areas, Glass--the danger of protectionist policies which might be implemented by the US, and Collins--the eroding commitment to US innovation, research and development, which (in the past) has led to wealth creation.
With regard to the state of Arkansas as a whole, Jeff Collins discussed growth in different areas of the state, most of which is occuring in the Little Rock/Central Arkansas area and in NW Arkansas. However, the state is losing manufacturing jobs, which in the past have provided high pay, due to globalization. Although new jobs are being created at a steady pace, the majority of these are low-paying, low-skill jobs. Collins expressed the need for an educated work force which would allow for the creation of high-wage, high-skill jobs. 80% of the new jobs in the state during the past 10 years have been created in Northwest Arkansas and Little Rock--62% in NW Arkansas and 18% in central Arkansas.
Underlying economic trends in NW Arkansas and the central part of the state is increased urbanization, as well as a remarkable rate of population and employment growth. About 1000 people per month are moving to NW Arkansas while about 560 jobs are being created each month. The largest sector for job growth is natural resources, mining and construction.
As a side observation with regard to home construction, he noted that in NW Arkansas in the 2nd quarter of 2005, there were 13,000 lots actively being built upon with 12,000 more platted but not yet active. By the 3rd quarter of the year, there were 16,000 lots being built upon with 15,000 more platted but not yet active. This represents a gain of 5000 lots in only 3 months.
Collins observed that the state economy is dominated by low-wage, low-skill employment, making the current workforce in much of the state ill-equipped to compete in the global marketplace for high-wage, high-skill jobs. The initiative to bring an auto manufacturing plant to Arkansas, which is being discussed in the media, will temporarily forestall the erosion in manufacturing jobs, but he suggested that the auto plant would be like adding a bucket of water to a bathtub with a slow leak.
In summary, Collins stated that the challenge to Northwest Arkansas is to provide state leadership commensurate with the economic power held in the area. Increasingly the whole state depends on the economic development here. But there are obstacles to continued growth--in particular, lack of infrastructure (especially roads, water supply and wastewater treatment). The area must respond with cooperation across governmental organizational boundaries and a unified vision for the future of the area.
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