NW Arkansas Positions Itself as a Leader in the Sustainability Movement

It wasn’t too many years ago that NW Arkansas was known as a rural farming area, if it was known at all. But Sam Walton had a small store in Bentonville – and you know the rest of the story.

As Wal-Mart grew by leaps and bounds, so did NW Arkansas. Wal-Mart’s major vendors started opening branches here and they and their families needed housing, schools, banking, hospitals, shopping centers, highways, sewer systems, and on and on.

The burgeoning population created the housing and construction boom which, of course, brought more families with more needs.

But the economic downturn around the country and the world caused folks in NW Arkansas to wonder if this growth could continue.

The answer may well be yes! Sustainability-based research and development has the potential to drive Northwest Arkansas for years to come and action is already underway to position itself as “Green Valley.” (Think California’s Silicon Valley 40 years ago.)

Fayetteville in particular has been a leader for living green. The city has had a recycling program for several years, recently won the Arbor Day Foundation’s award as “Tree City USA” for the 14th consecutive year, and frequently wins the Garden City award for cities of its size.

Those recognitions may be small compared to the overall sustainability movement, but it bodes well for the mindset of residents and local governments.

The University of Arkansas-Fayetteville has an Applied Sustainability Center already up and running.

Forbes Magazine ranked NW Arkansas as #4 in the entire country on their new list of Top 25 Best Places for Business and Careers.

Some companies that specialize in such things as ways to improve fuel efficiency, maximize resources, minimize environmental footprints, reduce greenhouse gases, and the world's dependence on fossil fuel have moved here to take advantage of both the favorable business climate and the sustainability movement.

A few companies from Sweden, long recognized as a leader in sustainability technology, have set up U.S. headquarters here. Several other Swedish firms are in the process of doing the same and still more are seriously investigating the possibility.

Perhaps we have to give another nod to Wal-Mart for taking the position 3 years ago to reduce waste to zero and make sustainability a priority. It takes time to achieve a goal that mammoth but the fact that they’re working on it has garnered attention around the world.

Wal-Mart has more than 1,300 locally based suppliers who answered the call to develop new packaging, logistics and other practices that are now spreading throughout the industry.
Even The Washington Post and Wall Street Journal have recognized and published articles about what’s taking root in NW Arkansas.

The potential for NW Arkansas as a major player in the sustainability (green) movement is here and it’s very exciting!

For more information:

http://www.nwarktimes.com/adg/Business/252507
http://www.nwarktimes.com/adg/Business/240533
http://www.nwarktimes.com/nwat/News/75202/

The Internet – Ya Gotta Love It!

I recently came across an interesting article that discussed who uses the Internet and what they do with it.

The survey broke usage down into several age brackets. In my group (older baby boomer) only 70% of those surveyed used the Internet for anything. I use the Net so much it’s hard to visualize what the other 30% who don’t use it at all do for correspondence, news, shopping, banking and business!

Technology is an essential part of my business. I have multiple websites where buyers can access all of the NW Arkansas MLS listings plus lots of information about buying a home. I also provide many useful links to all kinds of information about NW Arkansas.

I was one of the first few agents in NW Arkansas to provide a website to search for homes. I am among an elite group of about 200 agents nationally who have been invited to join the Allen Hainge Cyberstars, and I was an early recipient of the e-Pro certification.

Ultimately the Internet has totally changed the way I do business and the way people look for homes. There used to be fear among real estate agents that the Internet would replace agents - that people wouldn't need us any more. But that is not the case; in fact, people who want to buy or sell a home need agents more than ever.

The Internet has tons of information, but the key is to be able to INTERPET that information. A good agent (for the buyer or seller) can provide key market data and help their clients maximize what they can learn for themselves from the Internet.

For sellers, a techy agent can provide the maximum exposure of their property to the 90% of buyers who now search for their home on line.

For buyers, a techy agent can provide additional information on potential properties they may want to see. And techy buyers are way ahead of the others. They go online to research potential homes and rule out the obviously unsuitable ones. Ultimately, buyers and I save lots of time, not to mention gasoline!

The Internet also provides the means for me to quickly send listings and photos by email, as well as documents for signatures.

If I can help you buy or sell, please let me know. It’s what I do, and I particularly enjoy helping first-time homebuyers fulfill their dreams.

If you would like to see how your usage compares to others in your age group, go to:

http://www.usatoday.com/tech/webguide/internetlife/2009-01-28-online-generations_N.htm

The Mortgage Melt-down explained

I just discovered a wonderful video on You Tube which explains the mortgage melt-down in terms that everyone can understand. It's very clear, and there's also part 2 to continue the explanation.

Click below to see part 1.

http://www.youtube.com/watch?v=Q0zEXdDO5JU

It applies to the current situation in NW Arkansas Real Estate in that in this area we are victim to what happened in the mortgage meltdown. In addition, there were some contributing factors.

For example, back a number of years ago, the stock market tanked. Local people (who maybe lost money in the stock market) started looking at real estate investment rather than the stock market. A piece of land or a house is a tangible entity after all. They invested in single-family rentals and other multi-family real estate.

Then in 2004 the Fayetteville-Springdale-Rogers MSA (Metropolitan Statistical Area--i.e. basically NW Arkansas) ranked #1 for the Millkin report on the economy for all of the US, ahead of Las Vegas. All of a sudden the vultures started circling. Investors from all over the country were trying to purchase the same homes that first time home buyers were trying to purchase. Prices skyrocketed on the low end as demand far exceeded supply. Builders were not constructing new homes on the low end, because land prices were too high.

The result was that it became almost impossible to purchase an affordable home in NW Arkansas.

Then the mortgage melt-down happened and the investors from elsewhere disappeared. Inventory in NW Arkansas was high (i.e. lots of homes on the market in all aprice ranges).

Now we have a lot of homes on the market including affordable homes. Prices have declined precipitously. Of course, it all depends on price range.

The bottom line is that now is a terrific time to purchase a home. There are a lot of homes on the market in all price ranges. The low end is showing homes for less than $100K, a phenomenon not seen in many years. Lots of foreclosures, but also lots of good deals.

If you want to purchase a home, give me a call. I can help. I mostly help buyers, but my knowledge of the market also helps sellers.

See my home search website: http://www.NWArkansasHomeSearch.com or my regular informational website at http://www.Judyluna.com

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

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

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

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

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

Commercial and industrial property appraisals will remain unchanged.

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

For more information:

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

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

$8,000 Income Tax Credit for First-Time Homebuyers--WOW what a deal!

The new economic stimulus bill which was recently signed into law has a tremendous benefit for first-time homebuyers – a credit of up to $8,000! This is phenomenal--basically a gift from the federal government if you buy a home this year before December 1.

The credit is 10% of the cost of the home up to a maximum of $8,000 and does not have to be repaid if the buyer lives in the home for at least three years.

This provision is the difference between night and day compared to the $7,500 tax credit that took effect last year for homes purchased after April 9, 2008. The 2008 credit had to be repaid over 15 years, which essentially meant it was an interest free loan. (See my blog of August 30, 2008, “First-Time Homebuyer Tax Credit Explained.”)

So, I repeat: under most circumstances, the credit does not have to be repaid.

The home must be purchased between January 1, 2009 and November 30, 2009. December 1, 2009 is too late! The date ownership legally passes to the buyer is the qualifying date.

Who is a "first-time home buyer?" People who have not had an ownership interest in a primary residence during the last three years are eligible. Ownership in a vacation home would not be considered a primary residence.

Income qualifications for the full credit are $75,000 or less if single or $150,000 for a married couple. Partial credit is available to singles with incomes between $75,000 - $95,000 or married people whose incomes are between $150,000 - $170,000.

This is a refundable credit taken on the buyer’s federal income tax return for 2010. For example, if you will have already paid your full tax liability through withholding, you would still receive a refund of $8,000. Another example: you owed $5,000 in taxes and your withholding was $6,000. Your refund would total of $9,000. Last example: you owed $5,000 in taxes and your withholding was $4,000. Your refund would be $7,000.

Another extraordinary provision of the new law permits the buyer to elect to treat the purchase as if it occurred December 31, 2008 and take the credit on his 2008 income tax return. Even if the return has already been filed, an amended tax return can be filed to obtain the credit. This is especially useful for buyers whose income qualified them for the credit in 2008 but may have too much income in 2009.

Of course, the situation can be turned around. If the buyer would be better served in taking the credit on his 2009 tax return, he can reduce his withholding or estimated tax payments now instead of waiting until tax time in 2010.

All in all, I believe this may be the impetus needed to get people off the fence and into a home. Interest rates are low, inventory is huge, and $8,000 means a lot to most people. And it is so much better than last years $7,500 credit that, as mentioned above, has to be repaid.

The sad part for first-time buyers who purchased last year is that their $7,500 credit still has to be repaid. There is no provision in the law to forgive that and simply avail oneself of the $8,000 credit that does not have to be repaid. I certainly commiserate with them – but who could have possibly foreseen what this year’s law would provide?

IMPORTANT NOTE: This is my interpretation of the basic provisions of the new credit. I have tried to simplify things to give a picture of how this credit works but I urge you to check with your tax professional or accountant for full provisions of the law.

In any case, if you have not owned a home in the past 3 years and are thinking of purchasing a home as your principal residence, now is the time to do so. There are a lot of homes on the market now in NW Arkansas and some very good deals (especially foreclosures and short sales). As the spring progresses a lot of these good buys will be snapped up.

For more information:

http://www.federalhousingtaxcredit.com/2009/faq.php#5

http://money.cnn.com/2009/02/13/real_estate/homebuyer_tax_credit_finalized/index.htm?postversion=2009021712

Some Good News--NW Arkansas Housing Market One of the healthiest in the nation...

This economic roller coaster that we’re all on these days has just taken another turn. Only a few days ago I wrote about Wal-Mart downsizing some 700-800 people at its corporate headquarters and the effect that might have on the overall housing situation in MW Arkansas.

Today we have good news.

Builder Online just named Fayetteville as one of the top 15 healthiest housing markets for builders in the country. In fact, Fayetteville was named #9. In today’s world, that’s quite a statement. And it comes from an independent research firm.

According to their research, the unemployment rate in Fayetteville was only 4.1% in fourth quarter 2008. Another strong factor Builder Online noted was home values dropped only 2.4% in the past year. Many, many cities suffered value declines of 10% and way up from there.

Of course Builder Online isn’t first to recognize good things about our area. Kiplinger, Sperling’s Best Places to Live, and U.S. News and World Report have already beaten them to it. Still, it’s always heartening when “outsiders” recognize what the people who live here already know. NW Arkansas is a great place to live.

The other thing is that all real estate is local. Despite “doom and gloom” in the national media, NW Arkansas is still a good place to live and to invest. There are some phenomenal “deals” out there, but now is the time to invest—low interest rates and most buyers have not hit the streets. Yet…

For more information:

http://www.builderonline.com:80/local-markets/the-healthiest-housing-markets-for-2009.aspx?page=7

Scary

I just read a newspaper article about global warming that is positively scary. I've been watching how the North Polar icecap is decreasing and polar bears are having problems. This article appears to provide some reasons.

This has absolutely nothing to do with Fayetteville or Northwest Arkansas Real Estate, but this is a blog after all, and this article appeared to merit passing along.

http://www.washingtonpost.com/wp-dyn/content/article/2009/02/14/AR2009021401757.html?nav=hcmodule

I Guess NW Arkansas Isn’t Bulletproof After All…

By now everyone has heard about Walmart cutting 700 to 800 jobs at the home office in a restructuring move. This has come as a big surprise to a lot of people including me, and I’m worried about a “chilling” effect that this could have on the local economy.

As the national media proclaim doom and gloom stories about job losses, increased unemployment rates, and yet more economic stimulus measures, we thought we weren’t as bad off as other parts of the country. Walmart and other large corporate employers in NW Arkansas have provided job growth here—smaller than in past years, but at least positive growth.

The other thing is that a discount store like Walmart usually does better when times are tough as they are now. Thus we thought this would keep our area “safe” from what’s happening elsewhere. So to have even Walmart cut 5% of their positions here is significant, and could affect the already suffering housing market.

The perceptions that the economy here isn’t as robust as people thought and that there may not be as many jobs available, may prevent new people from moving here and purchasing homes. On the other hand, some of those 700 people may have difficulty finding new jobs here and selling their homes to move elsewhere. Thus the chilling effect is magnified as the number of months of housing inventory increases at a time when sales are down compared to previous years.

For me as a Realtor® I’m disappointed. Yes, Walmart may be fiscally responsible to its shareholders, but when someone you know is one of those 700 people the negative effect is felt even more sharply. I just found out that a client of mine, a nice young man to whom I have sold a home and who was going to get married in a few months, was one of those laid off. He is, of course, devastated, and trying to take stock of his situation.

Ultimately the effect of these job cuts probably can’t be measured. But the actual as well as psychological chill this has caused locally goes beyond news reports on the situation. Only time will get us out of this economic mess.

For more information:

http://www.nwanews.com/adg/News/252028/
http://www.nwanews.com/adg/Business/252088/
http://nwanews.com/bcdr/News/70632/
http://www.nwaonline.net/articles/2009/02/11/news/021109azwalmartlayoffs.txt

What I Learned About Generators During the Recent Ice Storm

Well, we're mostly back to normal after the severe ice storm last week in NW Arkansas. The electricity at my home went out on Tuesday; we finally got energy again on Sunday.

As I write it’s 10 days after the storm and according to news reports, power has been restored to all but about 20,000 homes – mostly in remote areas. Sometimes just getting to those homes requires chainsaws, bulldozers, and manpower to cut a path through the downed trees and power lines.

I really don’t know the number of homes and businesses that were in the dark at the worst of the outage. Suffice it to say more than 100,000 in NW Arkansas alone with hundreds of thousands of others throughout southern Missouri and into western Kentucky.

It was cold, dark, uncomfortable, and a test of patience and resourcefulness.

People with wood stoves and gas-log fireplaces faired pretty well in keeping warm. Outdoor grills and camping stoves provided a means of cooking. Kerosene lanterns, flashlights, and candles were put to good use.

I heard Wal-Mart and other stores were totally out of D-batteries, kerosene, and good old-fashioned telephones that don't need electricity to function. Someone I know couldn’t find a chainsaw for purchase anywhere.

The really lucky people had a portable, gasoline-powered generator to provide electricity for essentials such central heat (electric blower on a gas furnace), refrigerators, lights, and a reasonable quality of life.

I didn’t know anything about generators but I learned a lot in a hurry. In case you’re “in the dark” (pardon the pun), I’ll pass along what I learned.

*Generators are relatively inexpensive and easy to operate. A medium-sized generator (rated between 3000-6000 watts) is sufficient for an average home. It can operate the electric blower on a gas furnace, keep refrigerator(s) cold and lights on. If necessary, it can also power the pump on a water well.

*An electric clothes dryer and a microwave oven might even be possible as long as everything isn’t running at the same time. For instance, once the house is warm, shut that off and switch on the refrigerator.

*If you don’t want to run extension cords all over the house, consider buying a transfer switch. You’ll need an electrician to install that but it really simplifies the process. Then all you need to do is flip switches.

*There’s a ton of information on the Internet – everything from how to figure power surge versus operating wattage to prices and availability. Just Google “portable generators” and start reading.

*Generators must never be run indoors. They must be operated in fresh, outdoor air. (I think we all know that but a safety reminder never hurts.)

Now that the worst is past, I just want to say how impressed I was with the way people banded together to help each other. People with electricity invited family and friends to stay with them. Strangers helped strangers clear roads. The outpouring of mutual support was phenomenal.

It was an adventure that affected everyone, so that now that it's over, the main greeting question is: How long were you without electricity?

For more information:

http://www.ozarksecc.com/content.cfm?id=2075

http://www.carrollecc.com/content.cfm?id=2041

http://www.swepco.com/news/outages/viewstorm.asp?stormName=January%2027%20Ice%20Storm

Have Home Prices in NW Arkansas Bottomed Out Yet?

See Video of Lawrence Yun of National Association of Realtors comment on the national housing market.

Recent reports indicate that the number of homes sold nationwide continued to drop in November of 2008. But, on the positive side of that statement, the rate of drop was smaller than in recent months.

Purchases of previously owned homes slid 8.6% in November to an annual rate of 4.49 million units.

The Pending Home Sales Index fell 4.0 percent to 82.3 from a downwardly revised reading of 85.7 in October, and is 5.3 percent below November 2007 when it was 86.9. The current index is the lowest since the series began in 2001.

One bright note locally is Bentonville, which actually had a 5% increase in home sales in September, and Fayetteville and Rogers experienced a slight increase in October. However, sales in all of NW Arkansas were down compared to the same periods last year.

We may (or may not, depending on your particular perspective) be hitting bottom. Although prices in NW Arkansas decreased for December the decrease was less than it has been, a flattening out. Of course, we have to wait a few months yet, to see whether prices will start increasing again.

There is also a seasonal adjustment that occurs as homes sold in the winter generally sell for slightly less than in the peak months during the spring and summer. Inventory is still high (i.e. lots of homes for sale).

For the most part homeowners who do not have to sell are staying put. People who must move due to job relocations are the ones selling and they are being forced to face reality and lower the sales price dramatically in order to more the property quickly.

Foreclosures are the other part of reality that is forcing sales prices downward. Until that sector stabilizes, it will be difficult to see prices increasing again.

The Consumer Confidence Index for November was 44.9, up from 38.8 in October, which was the lowest reading since the research group started tracking the index in 1967.

The Gross Domestic Product (GDP) index shrank 0.5% in the 3rd quarter of 2008. That was worse than expected and the weakest it’s been since 2001. GDP measures the value of all goods and services produced within the U.S. and is considered the best barometer of the country's economic fitness.

The Feds have made so many moves, projections, bailouts, refusals to bailout, promises and revisions that comprehension of it all is beyond the capability of most folks. (I’ve tried rubbing my crystal ball but all I see is clouds!)

I wish I could tell you what to do and when to do it but no one can with certainty these days.

The only thing I can say is that prices are significantly down in NW Arkansas and it’s a great time to purchase a home or investment property. If you’re thinking about selling, I would say wait if you can.

On the other hand, if you are thinking about moving up to a larger home, the amount you will save on your purchase may outweigh not getting as much as you might have hoped on the sale of your existing home. In addition, interest rates are at a record low, in the 5% range.

The main thing to keep in mind is that a real estate purchase is traditionally considered a long term investment. Whether we have hit bottom or not really isn’t important from that point of view if you plan to keep the property for awhile. The speculation frenzy of the past couple of years is past, thank goodness!

For more information:

http://tinyurl.com/a4tec3
http://www.nwanews.com/adg/Business/243513/
http://news.yahoo.com/s/ap/20081125/ap_on_bi_ge/financial_meltdown
http://www.nwarktimes.com/adg/National/244604
http://arkansasbusiness.com/article.aspx?lID=78&sID=79&ms=80&cID=Z&aID=110303.54928.122429

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

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

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

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

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

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

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

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

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

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

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

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

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

For more information:

http://nwanews.com:80/nwat/News/72251/

Real Estate Trends Report

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

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

1. The Bailout: September 17th

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

2. The Presidential Election

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

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

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

4. Facing Foreclosure Frenzy

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

5. Home Prices Spiral Downward

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

6. NAR - DOJ Settlement

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

7. Brokers Go Bust

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

8. Keeping It Short

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

9. ActiveRain Explodes Past 100,000 Members

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

10. NAR Celebrates 100 Years

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


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

For more information:

http://www.retrends.com
http://www.activerain.com

3rd Quarter Skyline Report

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

PSST – Have I got a Cave for You!

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

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

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

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

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

For more information:

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

Mystic Caverns website: http://tinyurl.com/6lpwvg

Recession or Depression – Which is it?

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

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

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

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

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

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

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

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

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

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

http://en.wikipedia.org:80/wiki/List_of_recessions_in_the_United_States

Presidential Elections and the NW Arkansas Real Estate Market

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

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

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

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

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

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

The Jones Center for Families Hosts Fall Festival

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

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

Virtually everything is FREE.

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

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

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

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

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

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

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

For more information:

http://www.jonesnet.org/index.html

Chili Cook-off Benefit for Fayetteville Meals on Wheels

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

FYI

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

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

http://www.sothebysrealty.com/PropertyDetails.aspx?R=104140528&WT.mc_id=Trulia

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

http://rismedia.com/wp/2008-10-16/fridays-featured-listing-renowned-roy-rogers-double-r-bar-ranch/

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

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

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

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

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

For more information:

http://www.usnews.com/articles/business/best-places-to-retire/2008/09/18/americas-best-healthy-places-to-retire.html

Search for homes:

http://www.nwarkansashomesearch.com/
http://www.findfayettevillehomes.com/

Property Taxes are Due

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

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

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

Late payments incur an automatic 10% penalty plus interest.

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

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

The web addresses for Washington and Benton counties are:

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

Foreclosures in NW Arkansas

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

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

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

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

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

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

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

For more information:

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

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

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

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

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

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

Bikes, Blues and BBQ in Fayetteville, Arkansas

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

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

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

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

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

Y’all come!

For more information:

http://www.bikesbluesandbbq.org/

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

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

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

NW Arkansas has a great reputation, and rightfully so.

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

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

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

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

Health care availability is excellent and quality is high.

People are friendly and polite.

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

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

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

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

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

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

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

For more information:

http://www.judyluna.com/

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

http://www.kiplinger.com/features/archives/2008/05/2008-best-cities-fayetteville.html

http://www.arkansas.com/city-listings/city_detail.aspx?city=War+Eagle

First Time Homebuyer Tax Credit Explained

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For more information:

http://www.realtor.org/gapublic.nsf/files/hbtaxcreditqa2008.pdf/$FILE/hbtaxcreditqa2008.pdf

It’s Back to Square 1 for Fayetteville High School

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

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

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

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

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

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

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

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

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

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

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

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

Stay tuned for the next move.

For more information:

http://arkansasbusiness.com:80/article.aspx?lID=84&sID=85&ms=86&cID=Z&aID=107448.53153.119574

http://www.nwaonline.net/articles/2008/08/22/news/082208fzuawithdraws.txt

http://www.nwarktimes.com/adg/News/234962/

http://www.nwarktimes.com/nwat/News/68346/

Benton County Property Appraisals - The Saga Continues

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

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

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

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

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

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

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

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

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

For more information:

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

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

Market Report for June 2008, Northwest Arkansas Real Estate

According to a recent report from the National Association of Realtors®, existing home sales in June in the US are down by 2.6% compared to May and down 15.5% compared to June of last year. For all home sales, single-family home sales declined 3.2% to a seasonally adjusted annual rate of 4.27 million in June from 4.41 million in May, and are 14.8% below the 5.01 million-unit pace in June 2007.

Total inventory in June was up by 0.2%, which represents an 11.1-month supply at the current sales pace, up from a 10.8-month supply in May. The median price for June was $215,100 in June, down 6.1% from a year ago when the median was $229,000.

So how does NW Arkansas compare to statistics for the country? It’s different for each town, and also differs according to price range. Following are some statistics for the area with global numbers for each town (doesn’t take into account price range).

No. of Sales Median Price Av. DOM Supply (in Mo.)

Bentonville

June 2008
78 $197,950 147 20.18

June 2007
87 $196,000 140 11.70

Fayetteville

June 2008
109 $168,500 140 14.96

June 2007
135 $178,500 117 10.97

Rogers

June 2008
84 $166,500 167 18.01

June 2007
125 $178,500 157 13.64

Springdale

June 2008
82 $143,000 140 15.36

June 2007
108 $139,900 128 11.58

Bella Vista

June 2008
83 $155,000 150 13.15

June 2007
108 $162,450 135 10.72

So what do these numbers mean? In terms of months supply of homes, all of the NW Arkansas towns are above the national average, with Rogers and Bentonville significantly so. In fact, the Bentonville supply of homes on the market is almost double what is was last year.

In all cases, the Days on Market (DOM) is higher than it was last year, which means that homes are taking longer to sell. In all of the NW Arkansas towns the number of homes sold in June of this year is down, compared to June of last year. However, unlike the national statistics, more homes were sold in June of this year in all NW Arkansas towns than in May (statistics not reproduced here).

The median price for homes in all of the NW Arkansas towns is much lower than the national average. This means that NW Arkansas is still a very affordable place to live. Springdale and Bella Vista are the most affordable with a significant supply of homes in price ranges within reach of “average” folks. However, the median price range of homes in Springdale and Bentonville in June of this year is higher than that of June of 2007.

I should mention that median price is not necessarily the best indicator of whether prices are coming down or not. However, that is the best statistic we Realtors® have to work with. The median price is that price at which half of the homes sold are more expensive than the median price and half are less expensive.

From practical experience, I am finding that many offers are coming in at substantially lower prices than the list price. Buyers seem to think that all sellers are desperate, which is not necessarily the case. In addition, buyers are asking for more in the way of amenities (i.e. throw in blinds, fences, etc.) on new homes, and on re-sale homes they are asking for closing cost help and down payment assistance.

On the other hand, there are also many bank-owned homes (foreclosures) on the market. This has brought prices down, when considered from a statistical point of view. These homes are competing with “normal” homes for sale and making it difficult for the latter to sell at prices that they would usually bring.

For those who are worried about the so-called "declining" value of their home, the thing to remember is that a home purchase is traditionally a long-term investment. Real estate is cyclical, and what comes down will eventually go up. For folks who will be in their homes over a longer period of time, not to worry. These numbers will change and the market will improve. For sellers that don't have to sell right now, my recommendation is not to put your home on the market; wait a year or two.

Bottom line is that there are a lot of homes on the market now in NW Arkansas. In “realtor-speak” we have a “large inventory.” What this means for sellers who must sell now is that they must price their homes competitively for them even to be looked at, let alone sold. For buyers, it is a golden opportunity—lots to choose from at lower prices. Now is the time to buy, especially since interest rates are still low.

For more information:

http://rismedia.com/wp/2008-07-24/existing-home-sales-down-in-june/
http://www.realtor.org/research/research/ehsdata
http://www.realtor.org/press_room/news_releases/2008/ehs_down_in_june

Benton County Reappraisal Process is Complete

I no sooner posted the article (see blog posted July 12) than Benton County completed its appraisal process for property taxes.

Values are up – way up in some cases – and people are not happy. The total value of property in Benton County’ increased from $2.9 billion in 2005 to more than $4 billion this year. That includes increases in value of existing properties as well as new construction.

What many folks haven’t taken in to consideration is the fact that the last reappraisal was in 2005 and values have certainly risen since then, although not at the double-digit rates of the past several years. Instead, they seem to be looking only at the past year or so when values started coming down from their all-time high.

There is so much bad news these days it’s easy to get caught up in the doom and gloom. However, NW Arkansas is still growing and adding jobs, though not as rapidly as in the past.

As I’ve said before, real estate is local. You can’t look at California (or Florida or Nevada), for instance, and assume the same thing is happening here.

Arkansas law does provide important benefits to homeowners.

The increase in assessed value on a person’s homestead is capped at 5% per year. Thus, if the assessed valuation of the owner’s personal residence increased 9% over 2005 value, the 2009 value would be capped at 5%. It would be 2010 before the remaining 4% took effect.

Another advantage helps homeowners age 65 or older and those considered disabled as defined by Social Security Administration. It prevents the taxable assessment on an owner’s personal residence from ever increasing due to a reappraisal. Taxes can go up if improvements are made to the property or if millage rates go up, but not because of periodic increase in value.

In other words, all you have to do is notify the county assessor once you reach age 65 or become disabled and your taxable assessed valuation will be frozen forever (at least as long as you live in the same house).

(I’ve included below links to the application forms for both Benton and Washington counties.)

The new assessments will take effect January 1, 2009 with taxes due October 10, 2009.

Taxpayers can appeal the new valuation to the Benton County Equalization Board. You must make an appointment before August 20.

For more information:

Benton County Assessor’s office: 479-271-1037

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

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

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

Is Your Home Over-Appraised?

By law in Arkansas, each county must appraise all real estate every three years. When values are increasing, as they have been in NW Arkansas for many years, that timetable actually gives a break to property owners. A home appraised at $125,000 in 2004 stayed at that appraised value in years 2005 and 2006 even as the actual value increased to $150,000 or more.

Washington County completed its reappraisals in 2007, which in retrospect appears to be when property values hit the top.

Since then, some properties have actually lost value. I know because my old home, which I just sold in May, was appraised by the county for tax purposes at $195,000. I had it listed in the MLS for $179,900. It sold for slightly less.

Speculators have gone elsewhere looking for the next boom and left behind empty homes and empty lots. Builders desperate to get out from under their construction loans are pricing homes on the lower end of any price ranges of recently sold similar homes.

With the next appraisal in Washington County not set to occur until 2010, the county assessor has taken the unusual step of asking and receiving permission of the county’s Equalization Board to examine the situation.

There are more than 90,000 properties in the county and not all properties will be reexamined.
The target will most likely be subdivisions with homes costing more than $200,000. The plan is to compare homes sold in those subdivisions with the appraised value assigned in the same neighborhood on Jan. 1, 2007.

For example, if a home appraised at $200,000 actually sold for $190,000 and that pattern is repeated on several homes in the neighborhood, the appraised value would drop $10,000. A reduction of that amount would decrease property taxes by roughly $100. (Annual property taxes are about 1 percent of a home’s value.)

In my opinion, this is the fair thing to do and I commend Washington County for taking the high road. Things would probably work themselves out at the next scheduled reappraisals in 2010, but meanwhile some people would be paying more than their fair share of taxes.

Incidentally, properties in Benton County are currently undergoing their scheduled reappraisals, which will set property values beginning Jan. 1, 2009. We would expect those values to be indicative of current values.

For more information:

http://www.nwanews.com:80/adg/News/230807/

http://www.nwaonline.net/articles/2008/07/10/columns/brenda_blagg/071108blagg.txt

Happy Fourth of July

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

Fayetteville School Board Receives $60 million Option for High School Campus

As I mentioned in my blog June 8, Fayetteville School Board offered to sell its 40-acre high school campus to University of Arkansas for $59 million. U of A officials responded with a counter offer of $50 million. The school board took no further action, deciding more time was needed to consider terms of U of A’s offer.

Now a limited liability corporation has come forward with a request for a 90-day option on the property. The usual reason for an option is to allow time to evaluate the property and consider conditions of sale.

If the board accepts the option, it could not sell the property to anyone else during that time. The corporation would have the exclusive right to buy the property for $60 million, a $10 million increase over U of A’s offer.

However, the corporation would not be obligated to go through with the purchase.

As of this writing, the school board has not taken any action on the latest offer, citing a need for more information.

U of A was caught offguard by the corporation’s request. It will be interesting to see how the university responds in light of the fact that its offer was already $9 million short of the asking price.

So now another opportunity of sorts is on the table. $60 million over $50 million means $10 million taxpayers would not have to come up with to build a new high school – if everything falls into place and the corporation does indeed buy the campus. At this point, that’s a big IF.

Do I hear $70 million? Anyone?

For more information:

http://www.nwaonline.net/articles/2008/06/26/news/062708fzfayschoolbrd.txt
http://www.nwarktimes.com/nwat/News/66578/

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For more information:

http://www.buynwanow.com/

Clean Up or Pay Up

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

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

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

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

For more information:
http://www.nwaonline.net/articles/2008/05/28/news/052908bzbvregulate.txt

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

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

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

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

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

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

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

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

For more information:

http://www.nwaonline.net/articles/2008/06/04/news/060408fy412bypass.txt

http://www.nwarktimes.com/adg/News/227680/

Fayetteville High School Update

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

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

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

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

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

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

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

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

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

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

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

How large a millage increase will be needed?

Stay tuned for further details.

For more information:

http://nwahomepage.com/content/fulltext/?cid=13296
http://www.nwaonline.net/articles/2008/05/30/news/053008fzfayschoolbrd.txt
http://www.nwarktimes.com/adg/News/227184/
http://www.nwanews.com/nwat/News/65523/
http://www.nwanews.com/adg/News/227921

Fayetteville Girl Going to the Olympics

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

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

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

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

For more information:

http://www.nwarktimes.com/nwat/Sports/65877/

http://www.usatoday.com/sports/olympics/summer/2008-05-13-teenpentathlete_N.htm

http://www.olympic-usa.org/11671_54142.htm