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According to the National Association of Realtors®, the GDP (Gross Domestic Product—or total value of goods and services produced in the US) grew at a slower than expected 1.3% in the first quarter of 2007, due in part to the housing slump across the nation.
On April 25 the National Association of Realtors® announced that sales of existing homes plunged 8.4% in March, the worst one-month decline in 18 years. The median price of an existing home nationally fell to $217,000, a 0.3% decline from March 2006. Inventories of unsold homes nationally rose to a 7.3-month supply, the highest level since October. New home sales in March rose 2.6% over February, but were down 23% from March 2006, the second weakest year-over-year sales performance since September 2001, according to an April 25 report from the Census Burea. Surprisingly, the median price nationally of a new home sold in March was $254,000, up 6.3% from the price of a new home sold a year earlier.
Home sales in NW Arkansas, as elsewhere, were down in the first quarter of 2007 compared to the last quarter of 2006. This is a normal seasonal occurrence, since the NW Arkansas housing market is largely weather driven, and we had awful, cold weather. But homes are now taking longer to sell due to elevated inventory in almost all price levels, with the average days on market (DOM) up in all of the NW Arkansas towns. The “buyer’s market” discussed in media reports does exist here, and with high inventory and falling prices, it might be a good time for buyers to purchase a home in NW Arkansas. Nevertheless, each town does have slightly different market trends.
An exception to what I have said above, Fayetteville actually experienced an increase in home sales in Q1 2007 with 258 homes sold (86 per month), compared to 248 homes sold in the Q4 of 2006 and the same number sold in the Q1 of 2006. As for prices, after a drop of almost 14 percent in the last quarter of 2006, the average price of homes sold in the first quarter of 2007 increased by almost 6% to $216,013. The median price of homes sold was $189,900, and the DOM was 137, up from 110 in the 4th quarter of 2006. The highest average sales price in the past couple of years was $236,616 in the 3rd quarter of 2005.
Springdale’s housing market is down from both the past quarter and from the same quarter last year. There were 275 homes sold in Q1 of 2007 compared to 283 in Q4 of 2006 and 313 in Q1 of 2006. Average DOM has increased to 132 over the past year from 111 in Q1 of 2006. The average and median sales prices have also decreased over the past year. Average sales price is down almost 8% compared to Q1 last year and almost 3% from the last quarter. The average sales price for Springdale during Q1 of 2007 was $160,882 after a peak in Q2 of 2006 of $181,380. The median price of homes in Springdale in Q1 of 2007 was $149,900—a decrease to the same level as in Q4 for 2005. It should be mentioned, however, that not only does the decreased average and median sale price reflect lower prices for homes, but also the increased availability of less expensive homes. This might be a good time to invest in a home in Springdale.
Bentonville is still the most expensive place to purchase a home in NW Arkansas, with an average sale price of $235,229 during Q1 of 2007, compared to $212,666 in Q1 of 2006. However, prices have dropped slightly from the highest average sale price in the past couple of years, which occurred in Q4 of 2006 at $238,659. However, the median sale price is now the highest it has been at $209,000, compared to $194,500 in Q4 of 2006 and $180,000 in Q1 of 2006. The median price represents the middle price of all homes sold, with equal numbers of more expensive and less expensive homes sold. This increase represents a 16% increase compared to Q1 of 2006 and almost an 8% increase from the last quarter of 2006.
Average days on market (DOM) in Bentonville has reached 162, up from 142 in Q4 of 2006 and 124 in Q1 of 2006. And the number of homes sold in Bentonville during Q1 of 2007 has decreased significantly to 151, compared to 192 in the same quarter last year and 197 in Q4 of 2006. The highest number of homes sold in the past couple of years in Bentonville occurred during Q3 of 2005, 292 homes.
The picture in Rogers is slightly different from that of Bentonville. It is the same in that fewer homes were sold in Q1 of 2007 compared to Q4 of 2006 (279 compared to 319), but when compared to Q1 of 2006 (275 homes sold), more homes were sold. Also both median and average prices have declined. The average sale price in Q1 of 2007 was $193,807 and the median sale price was $160,000. This represents a drop of 14% compared to Q4 of 2006 and 13% compared to Q1 of last year in average sale prices, and a drop of over 7% in median sale prices compared to Q1 and Q4 of 2006. As in Springdale, this signifies both falling home prices and the increased availability of less expensive homes. The DOM is up to 167 days, compared with 147 in Q4 of 2006 and 122 in Q1 a year ago.
Bella Vista’s market, in some respects, has remained somewhat steady in comparison to the other towns of NW Arkansas. This could be because the price ranges of homes are more limited. Nevertheless, there was also a decline in the number of homes sold in Q1 of 2007 compared to the previous quarter, from 243 to 200. The number of homes sold in Q1 of 2006 was 265. As in the other NW Arkansas towns, average DOM increased from 135 to 145, the highest it has been in the past couple of years.
But prices haven’t changed that much in Bella Vista. The average sales price did decline slightly from $178,789 in Q4 of 2006 to $176,201 in Q1 of 2007 (only 1.51%). The median price increased slightly in the same period from $155,000 to $159,000 (only 2.58%).
All in all, many of the changes are normal seasonal ones and follow similar patterns to previous years. As mentioned earlier, the weather does have a significant effect on the NW Arkansas housing market, and this winter has been extremely cold. Another factor has been the large amount of media type about the “housing slump” which made many buyers afraid to purchase; they didn’t want to pay too much if prices were going down.
Until the past couple of quarters, NW Arkansas seemed immune to these national trends with home prices rising even as they were bottoming out in other parts of the country, but an adjustment has finally occurred.
Yes, prices have come down, so this might be a good time to buy, since the supply of homes is up and interest rates are still down. It is definitely a buyer’s market in almost all price ranges. And now that the weather is improving, I have noticed a decided increase in buyer activity.
Note: Data for local statistics in this report is from the NW Arkansas MLS and included only homes that were listed by real estate agent members of the MLS. It does not include For Sale by Owners or other properties not listed by a real estate firm. For comparison purposes the national median home price in Q4 of 2006 was $219,300. NW Arkansas is still a “good deal.”
These figures do vary according to price range, city, and neighborhood. If you would like more information on your specific neighborhood, email me at judy@judyluna.com.
For more information on other economic indicators for Q1 2007:
http://www.realtor.org/Research.nsf/files/gdp.pdf/$FILE/gdp.pdf
Monday, April 30, 2007
Monday, April 23, 2007
Reflections on the Life of Helen Walton
Helen Robson Walton, widow of Wal-Mart founder Sam Walton, died last week. Her passing signifies the end of an era, but her influence will live on.
Lady, Christian, philanthropist, savvy businesswoman, unpretentious, caring humanitarian – these are but a few of the adjectives used to describe Helen Walton. She was a loving wife and mother to Sam and their four children and “the woman behind the successful man.” One might wonder if (in a different generation) she might not have been the founder of Wal-Mart.
Helen Walton was a woman’s libber before that term was even coined. She earned a bachelor’s degree in finance at the University of Oklahoma in 1942, back when such a pursuit was unusual for a woman.
She pushed to have women on Wal-Mart’s board of directors and in 1986 the first woman, Hillary Clinton, joined the board. Helen also understood early on, the long-term importance of providing profit sharing to Wal-Mart employees, to which Sam agreed.
Always active in the Presbyterian Church, Helen was the first female vice-chair and first female chair of the board of trustees for the Presbyterian Church (U.S.A.) Foundation. She also was active on the board of the University of the Ozarks in Clarksville, Arkansas, and was its honorary lifetime chairwoman.
Helen Walton personally supervised the $3.6 million scholarship fund for Central American students at John Brown University, University of the Ozarks, and Harding University. According to Wal-Mart, about 1,000 students have participated in this program since 1985. Most, if not all, the students have returned or will return to their home countries after graduating with the intent of improving the lives of their fellow citizens.
She was the person behind the Wal-Mart Foundation, which has given untold millions of dollars to the community. One example is a $300 million donation to the University of Arkansas. The foundation had earlier given $50 million to the university's school of business, which was subsequently renamed the Sam M. Walton School of Business.
Other notable contributions include $39.5 million to the University of the Ozarks, the largest gift to a private institution in Arkansas.
Always interested in education and the arts, Helen Walton was a founding member, organizer and 1992 president of the Arkansas Committee of the National Museum of Women in the Arts in Washington, DC.
She was the leading supporter of The Walton Arts Center in Fayetteville.
She also was the impetus behind a plan to include computer technology in all Bentonville-area school districts. That project resulted in a computer in each classroom and a computer lab in each building.
Sam started a small business in a very small town, Bentonville, Arkansas. His wife and partner, Helen, was his bedrock all the way. She provided not only heart and business acumen, she was the source of many of the humanitarian practices established in the corporate structure as the company grew.
These days Wal-Mart bashing is a popular activity. A strong anti-Wal-Mart movement exists but it wasn’t always that way. Many people in NW Arkansas, throughout the country, and even other parts of the world will remember Helen Walton and her husband, Sam, for the many trails they blazed.
For more information:
http://www.nwanews.com/nwat/News/52281/
http://www.nwaonline.net/shared-content/search/index.php?search=go&l=25&q=helen+walton
http://uk.reuters.com/article/governmentFilingsNews/idUKN2018261920070420
http://www.pcusa.org/pcnews/2007/07235.htm
Lady, Christian, philanthropist, savvy businesswoman, unpretentious, caring humanitarian – these are but a few of the adjectives used to describe Helen Walton. She was a loving wife and mother to Sam and their four children and “the woman behind the successful man.” One might wonder if (in a different generation) she might not have been the founder of Wal-Mart.
Helen Walton was a woman’s libber before that term was even coined. She earned a bachelor’s degree in finance at the University of Oklahoma in 1942, back when such a pursuit was unusual for a woman.
She pushed to have women on Wal-Mart’s board of directors and in 1986 the first woman, Hillary Clinton, joined the board. Helen also understood early on, the long-term importance of providing profit sharing to Wal-Mart employees, to which Sam agreed.
Always active in the Presbyterian Church, Helen was the first female vice-chair and first female chair of the board of trustees for the Presbyterian Church (U.S.A.) Foundation. She also was active on the board of the University of the Ozarks in Clarksville, Arkansas, and was its honorary lifetime chairwoman.
Helen Walton personally supervised the $3.6 million scholarship fund for Central American students at John Brown University, University of the Ozarks, and Harding University. According to Wal-Mart, about 1,000 students have participated in this program since 1985. Most, if not all, the students have returned or will return to their home countries after graduating with the intent of improving the lives of their fellow citizens.
She was the person behind the Wal-Mart Foundation, which has given untold millions of dollars to the community. One example is a $300 million donation to the University of Arkansas. The foundation had earlier given $50 million to the university's school of business, which was subsequently renamed the Sam M. Walton School of Business.
Other notable contributions include $39.5 million to the University of the Ozarks, the largest gift to a private institution in Arkansas.
Always interested in education and the arts, Helen Walton was a founding member, organizer and 1992 president of the Arkansas Committee of the National Museum of Women in the Arts in Washington, DC.
She was the leading supporter of The Walton Arts Center in Fayetteville.
She also was the impetus behind a plan to include computer technology in all Bentonville-area school districts. That project resulted in a computer in each classroom and a computer lab in each building.
Sam started a small business in a very small town, Bentonville, Arkansas. His wife and partner, Helen, was his bedrock all the way. She provided not only heart and business acumen, she was the source of many of the humanitarian practices established in the corporate structure as the company grew.
These days Wal-Mart bashing is a popular activity. A strong anti-Wal-Mart movement exists but it wasn’t always that way. Many people in NW Arkansas, throughout the country, and even other parts of the world will remember Helen Walton and her husband, Sam, for the many trails they blazed.
For more information:
http://www.nwanews.com/nwat/News/52281/
http://www.nwaonline.net/shared-content/search/index.php?search=go&l=25&q=helen+walton
http://uk.reuters.com/article/governmentFilingsNews/idUKN2018261920070420
http://www.pcusa.org/pcnews/2007/07235.htm
Sunday, April 22, 2007
Fayetteville’s Impact Fee Election Results Somewhat Uncertain
When I posted my blog entry April 1 about the upcoming special election on impact fees, I fully expected to post a follow up the day after the April 10 election to state the results. Well, as some of you already know, results are somewhat murky.
The morning after the election the unofficial count was tight, to say the least. Supporters of the fees had a one-vote lead. (Once again, I say, “Don’t ever think your one vote doesn’t matter.)
The major holdup at that point was 15 outstanding absentee ballots. The ballots would be counted if they were received by April 20, the day the election was to be certified.
When the absentee ballots were added to the earlier results, the election was a tie, 2015 votes for and 2015 votes against. Elections have to be won by a majority so the tie means the impact fee increase failed.
As if an election that close isn’t interesting in itself, here’s the really unusual part.
One of the absentee ballots may ultimately be thrown out on technicalities. It seems the overseas voter did not use the same exact address on the application for the ballot as he did on the statement accompanying the ballot.
That particular ballot was a No vote. It was the vote that created the tie. It was included in the final certification.
If that ballot is challenged and subsequently removed from the official count, the election will have been approved by one vote.
Washington County Attorney George Butler is researching the situation but said he expects to find little precedent to resolve the matter.
Because the law is generally against disenfranchising voters, Butler encouraged the Washington County Election Commission to count the ballot in question. Butler stated further that the commission may file an amended certification reversing the election if that becomes necessary.
For more information:
http://www.nwaonline.net/articles/2007/04/21/news/042107fzroadfees.txt
http://www.nwanews.com/nwat/News/52331/
http://www.nwanews.com/nwat/News/52304/
The morning after the election the unofficial count was tight, to say the least. Supporters of the fees had a one-vote lead. (Once again, I say, “Don’t ever think your one vote doesn’t matter.)
The major holdup at that point was 15 outstanding absentee ballots. The ballots would be counted if they were received by April 20, the day the election was to be certified.
When the absentee ballots were added to the earlier results, the election was a tie, 2015 votes for and 2015 votes against. Elections have to be won by a majority so the tie means the impact fee increase failed.
As if an election that close isn’t interesting in itself, here’s the really unusual part.
One of the absentee ballots may ultimately be thrown out on technicalities. It seems the overseas voter did not use the same exact address on the application for the ballot as he did on the statement accompanying the ballot.
That particular ballot was a No vote. It was the vote that created the tie. It was included in the final certification.
If that ballot is challenged and subsequently removed from the official count, the election will have been approved by one vote.
Washington County Attorney George Butler is researching the situation but said he expects to find little precedent to resolve the matter.
Because the law is generally against disenfranchising voters, Butler encouraged the Washington County Election Commission to count the ballot in question. Butler stated further that the commission may file an amended certification reversing the election if that becomes necessary.
For more information:
http://www.nwaonline.net/articles/2007/04/21/news/042107fzroadfees.txt
http://www.nwanews.com/nwat/News/52331/
http://www.nwanews.com/nwat/News/52304/
Tuesday, April 17, 2007
General Aviation Airports are Big Business in NW Arkansas
NW Arkansas is lucky to have several excellent general aviation airports. The airports contribute to the economy by providing jobs, paying taxes, and serving many of the businesses located here. They serve not only the owner of a 2-seat propeller airplane but businesses of all sizes.
In fact, Rogers’ and Fayetteville’s general aviation airports are two of the most successful in the state, according to a recent study commissioned by the Arkansas Department of Aeronautics. Their combined annual economic impact is estimated at $128 million including direct factors such as fuel sales and the trickle-down effect of indirect factors such as wages paid to employees who then spend that income locally.
Rogers Municipal Airport at Carter Field is home to Wal-Mart’s corporate fleet, a fact that certainly helps explain why that airport is the most lucrative general aviation airport in the state. (According to information I was given at the Wal-Mart Museum in Bentonville, Wal-Mart ‘s fleet consists of 21-22 jets.)
Fayetteville Municipal Airport, Drake Field, is home to the University of Arkansas at Fayetteville’s jets. Drake Field’s revenue was ranked fourth in the state, generating $34 million, the ADA study found. It’s commonplace there to have people fly in for Razorback games.
In addition to Rogers and Fayetteville, Springdale and Siloam Springs have general aviation airports with thriving charter service. Springdale’s airport includes a complete aircraft maintenance facility and a 300-foot runway expansion is under consideration.
General aviation airports offer expediency and cost savings to corporations both large and small. It’s easy to understand how Wal-Mart would save money by flying several executives to another city and back in the same day.
But the airports also offer savings for smaller corporations in outlying areas such as Siloam Springs. That city is home to Allen Canning and Simmons Foods, corporations that also have the need to move people expeditiously to other facilities throughout the country. “Without these airports, small communities just aren’t as viable,” said Mark Anderson, Allen Canning’s chief pilot. “For us, people would lose a whole day driving. It’s about the utility and efficiency.”
Another major economic factor is the businesses such as support services, aviation industries and airfreight companies that locate on the periphery of airports.
Speed, convenience and privacy of charter jet service are also becoming increasingly attractive to individuals who can afford it. A 2004 survey conducted by the National Business Aviation Association found that two-thirds of charter operations had a significant portion of new business from travelers who had stopped flying on commercial carriers.
The Arkansas Department of Aeronautics recently reported that in the last 10 years the number of general aviation aircraft based in the state has risen from about 2,300 to 2,808. Between 2005 and 2025, the department estimates that the number of general aviation business jets will increase in number from 182 to 531, almost tripling in number in 20 years.
For more information:
http://www.nwaonline.net/articles/2007/03/10/business/031107bizluxuryaircharter.txt
http://www.nwanews.com/story.php?paper=adg§ion=News&storyid=182855
http://www.nwaonline.net/articles/2006/11/11/business/111206fsairportplan.txt
In fact, Rogers’ and Fayetteville’s general aviation airports are two of the most successful in the state, according to a recent study commissioned by the Arkansas Department of Aeronautics. Their combined annual economic impact is estimated at $128 million including direct factors such as fuel sales and the trickle-down effect of indirect factors such as wages paid to employees who then spend that income locally.
Rogers Municipal Airport at Carter Field is home to Wal-Mart’s corporate fleet, a fact that certainly helps explain why that airport is the most lucrative general aviation airport in the state. (According to information I was given at the Wal-Mart Museum in Bentonville, Wal-Mart ‘s fleet consists of 21-22 jets.)
Fayetteville Municipal Airport, Drake Field, is home to the University of Arkansas at Fayetteville’s jets. Drake Field’s revenue was ranked fourth in the state, generating $34 million, the ADA study found. It’s commonplace there to have people fly in for Razorback games.
In addition to Rogers and Fayetteville, Springdale and Siloam Springs have general aviation airports with thriving charter service. Springdale’s airport includes a complete aircraft maintenance facility and a 300-foot runway expansion is under consideration.
General aviation airports offer expediency and cost savings to corporations both large and small. It’s easy to understand how Wal-Mart would save money by flying several executives to another city and back in the same day.
But the airports also offer savings for smaller corporations in outlying areas such as Siloam Springs. That city is home to Allen Canning and Simmons Foods, corporations that also have the need to move people expeditiously to other facilities throughout the country. “Without these airports, small communities just aren’t as viable,” said Mark Anderson, Allen Canning’s chief pilot. “For us, people would lose a whole day driving. It’s about the utility and efficiency.”
Another major economic factor is the businesses such as support services, aviation industries and airfreight companies that locate on the periphery of airports.
Speed, convenience and privacy of charter jet service are also becoming increasingly attractive to individuals who can afford it. A 2004 survey conducted by the National Business Aviation Association found that two-thirds of charter operations had a significant portion of new business from travelers who had stopped flying on commercial carriers.
The Arkansas Department of Aeronautics recently reported that in the last 10 years the number of general aviation aircraft based in the state has risen from about 2,300 to 2,808. Between 2005 and 2025, the department estimates that the number of general aviation business jets will increase in number from 182 to 531, almost tripling in number in 20 years.
For more information:
http://www.nwaonline.net/articles/2007/03/10/business/031107bizluxuryaircharter.txt
http://www.nwanews.com/story.php?paper=adg§ion=News&storyid=182855
http://www.nwaonline.net/articles/2006/11/11/business/111206fsairportplan.txt
Saturday, April 14, 2007
Fayetteville MSA Receives Another #1 Rating
Our best-kept secret has been announced to the world by Bert Sperling of Sperling’s Best Places fame. Sperling has previously researched and written books about a variety of issues such as the best places to raise a family and cities with the lowest crime rates.
This time Sperling looked at quality of life, affordable housing, high percentage of home ownership, low unemployment and fast rate of job growth. He discovered the Fayetteville Metropolitan Statistical Area (MSA) and ranked it number one in the country. (Fayetteville MSA includes Fayetteville, Springdale, Rogers, Bentonville and stretches into extreme southwest Missouri.)
The area boasts five-year-job growth of 26.1% and a low unemployment rate of 3.5%. In addition to the headquarters for Wal-Mart, Tyson and J.B. Hunt Trucking, many other Fortune 500 companies have offices here.
Living costs are low. According to the book, the median home price in the Fayetteville-Springdale-Rogers area averages $212,300 for a 3-4 bedroom home with approximately 2,000 sq. ft. of living area.
We have the University of Arkansas-Fayetteville with all their sports and cultural activities, several museums plus a world-class museum scheduled to open in 2009, a large performing arts center, excellent medical facilities, and our own regional airport with non-stop service to Chicago, Houston, Detroit, Minneapolis and additional cities.
Add all that to the clean air and natural beauty of the Ozarks, many lakes including Beaver Lake with its 449 miles of shoreline, and a very livable four-season climate and you can easily understand why Sperling found this area so attractive.
For the past several years, some 1000-1100 people have been moving here each month. I guess Bert Sperling isn’t the only person to recognize a good thing when he sees it.
For more information:
http://realestate.msn.com/Buying/Article2.aspx?cp-documentid=3863709
http://www.nwanews.com/nwat/news/51179
This time Sperling looked at quality of life, affordable housing, high percentage of home ownership, low unemployment and fast rate of job growth. He discovered the Fayetteville Metropolitan Statistical Area (MSA) and ranked it number one in the country. (Fayetteville MSA includes Fayetteville, Springdale, Rogers, Bentonville and stretches into extreme southwest Missouri.)
The area boasts five-year-job growth of 26.1% and a low unemployment rate of 3.5%. In addition to the headquarters for Wal-Mart, Tyson and J.B. Hunt Trucking, many other Fortune 500 companies have offices here.
Living costs are low. According to the book, the median home price in the Fayetteville-Springdale-Rogers area averages $212,300 for a 3-4 bedroom home with approximately 2,000 sq. ft. of living area.
We have the University of Arkansas-Fayetteville with all their sports and cultural activities, several museums plus a world-class museum scheduled to open in 2009, a large performing arts center, excellent medical facilities, and our own regional airport with non-stop service to Chicago, Houston, Detroit, Minneapolis and additional cities.
Add all that to the clean air and natural beauty of the Ozarks, many lakes including Beaver Lake with its 449 miles of shoreline, and a very livable four-season climate and you can easily understand why Sperling found this area so attractive.
For the past several years, some 1000-1100 people have been moving here each month. I guess Bert Sperling isn’t the only person to recognize a good thing when he sees it.
For more information:
http://realestate.msn.com/Buying/Article2.aspx?cp-documentid=3863709
http://www.nwanews.com/nwat/news/51179
Sunday, April 08, 2007
Affordable Housing May Still be Possible in NW Arkansas
Good news! Builders and cities are beginning to realize that the majority of people cannot afford a mansion to house their families.
I have maintained for considerable time now that there is a shortage of affordable homes. Land prices have increased dramatically while wages have not kept pace.
When builders have to pay more for land they generally build a more expensive home in order to recoup the cost. Fancy bathrooms, gigantic master bedrooms, granite counter tops, top-of-the-line appliances, and 3-car garages are all very nice – but not affordable for the average wage earner.
Three bedrooms, 2 baths, ceramic tile in the wet areas, and 1,000–1,200 square feet are perfectly serviceable homes for many people. These “starter homes” are more important now than ever before.
When homebuyers are forced farther away from the major municipalities to find a home on lower cost land, their cost of commuting to work increases. At the same time, infrastructure is strained and traffic congestion increases.
Now, I’m happy to say, some builders and cities are cooperating in an effort to create affordable housing. Homes can be built with smaller set backs and less space between homes.
One builder is planning to build 1,000 square foot homes in Rogers with an expected sales price of about $110,000.
Building on empty land where the infrastructure is already in place is another way to lower the overall cost of the home. This is called “in-filling” and helps reduce urban sprawl.
Each year NW Arkansas homebuilders showcase their homes in the Parade of Homes. The parade has traditionally featured homes for the more affluent buyer. This year, some builders may highlight less affordable homes, a trend I hope will continue.
The Parade of Homes is open to the public and will take place the weekend of June 22-24.
For more information:
http://www.nwanews.com/story.php?paper=brog§ion=News&storyid=43179
http://www.nwanews.com/story.php?paper=adg§ion=Business_Matters&storyid=180267
I have maintained for considerable time now that there is a shortage of affordable homes. Land prices have increased dramatically while wages have not kept pace.
When builders have to pay more for land they generally build a more expensive home in order to recoup the cost. Fancy bathrooms, gigantic master bedrooms, granite counter tops, top-of-the-line appliances, and 3-car garages are all very nice – but not affordable for the average wage earner.
Three bedrooms, 2 baths, ceramic tile in the wet areas, and 1,000–1,200 square feet are perfectly serviceable homes for many people. These “starter homes” are more important now than ever before.
When homebuyers are forced farther away from the major municipalities to find a home on lower cost land, their cost of commuting to work increases. At the same time, infrastructure is strained and traffic congestion increases.
Now, I’m happy to say, some builders and cities are cooperating in an effort to create affordable housing. Homes can be built with smaller set backs and less space between homes.
One builder is planning to build 1,000 square foot homes in Rogers with an expected sales price of about $110,000.
Building on empty land where the infrastructure is already in place is another way to lower the overall cost of the home. This is called “in-filling” and helps reduce urban sprawl.
Each year NW Arkansas homebuilders showcase their homes in the Parade of Homes. The parade has traditionally featured homes for the more affluent buyer. This year, some builders may highlight less affordable homes, a trend I hope will continue.
The Parade of Homes is open to the public and will take place the weekend of June 22-24.
For more information:
http://www.nwanews.com/story.php?paper=brog§ion=News&storyid=43179
http://www.nwanews.com/story.php?paper=adg§ion=Business_Matters&storyid=180267
Sunday, April 01, 2007
Impact Fees – How Much is Too Much?
Less than one year ago Fayetteville voters approved a ¼ of 1% sales tax increase to pay for $65.9 million in bonds for street improvement projects.
Now Fayetteville residents are being asked to vote at a special election April 10th on the question of whether to impose an impact fee on builders to provide additional funds to improve roads.
If the impact fee passes, the additional amounts charged builders will vary from $2,363 for a single family detached home, to $1,319 per room for a hotel/motel, and on up to $2,701 per 1,000 square feet of commercial or office space.
As usual, there is more than one point of view when looking at this problem.
Does it make sense that the builder should be charged for the infrastructure that his project would necessitate? It’s easy to say “Yes, that sounds logical.” But look a little deeper into the problem and you’ll see it is the buyer or renter that will ultimately pay the fee. Homes will cost more and rents will rise.
I’ve written previously about the lack of affordable housing in NW Arkansas as a whole and Fayetteville in particular. Adding another $2,363 to the cost of each home only makes homes less affordable.
Another issue is whether increasing the impact fees already in effect will deter businesses from locating in Fayetteville. That issue, too, can be argued two ways. Some say that businesses seeking to expand or move to Fayetteville will look at other areas where fees are lower or nonexistent, and this has already happened.
If businesses locate elsewhere, Fayetteville’s sales tax receipts will decrease accordingly. Keep in mind that sales tax is a principal source of revenue for city capital improvement and schools. There has already been a decrease in sales tax revenues in the last quarter of 2006.
Others say look at Bentonville. The impact fee for a single home in that city is $4,750 and the city is growing at a major pace.
The new impact fee will make Fayetteville’s the highest in NW Arkansas at $4,897. Springdale has no impact fees and has completed major improvements on their artery streets, as well as neighborhood streets, by sales taxes voted by residents and by bond issues. Rogers charges a $2600 “sewer and water hook-up” fee, which some call a disguised impact fee and which has been challenged in court.
However, the bottom line here is that developers in Fayetteville already pay impact fees for new-construction, which are passed on to the consumers of these homes. Developers also are required to install (at their own expense) new roads and other infrastructure items, such as water lines, sewer lines, etc. An additional road impact fee will basically be another tax, not just on developers and builders of new areas but on everyone who lives in Fayetteville. It’s a case of double taxation, despite what those in favor of the measure say. And it puts the burden of street improvements for older areas of Fayetteville on the developers of new areas. Is that fair?
Ultimately, money for additional (and much needed) street improvements will have to come from somewhere. If taxes need to be increased, so be it—let the voters decide as they have in the past. But let’s be honest.
I have a great concern that Election Day is just around the corner, and I don’t believe the majority of voters have taken an interest in the matter at hand. I encourage everyone to become informed and vote his or her conscience. I personally am going to vote NO.
Here are some links for further information:
http://www.nwanews.com/nwat/News/51665/
http://www.nwaonline.net/articles/2007/03/25/news/032607fzroadfees.txt
http://www.nwanews.com/nwat/News/51598/
http://www.nwanews.com/adg/News/186156/
Now Fayetteville residents are being asked to vote at a special election April 10th on the question of whether to impose an impact fee on builders to provide additional funds to improve roads.
If the impact fee passes, the additional amounts charged builders will vary from $2,363 for a single family detached home, to $1,319 per room for a hotel/motel, and on up to $2,701 per 1,000 square feet of commercial or office space.
As usual, there is more than one point of view when looking at this problem.
Does it make sense that the builder should be charged for the infrastructure that his project would necessitate? It’s easy to say “Yes, that sounds logical.” But look a little deeper into the problem and you’ll see it is the buyer or renter that will ultimately pay the fee. Homes will cost more and rents will rise.
I’ve written previously about the lack of affordable housing in NW Arkansas as a whole and Fayetteville in particular. Adding another $2,363 to the cost of each home only makes homes less affordable.
Another issue is whether increasing the impact fees already in effect will deter businesses from locating in Fayetteville. That issue, too, can be argued two ways. Some say that businesses seeking to expand or move to Fayetteville will look at other areas where fees are lower or nonexistent, and this has already happened.
If businesses locate elsewhere, Fayetteville’s sales tax receipts will decrease accordingly. Keep in mind that sales tax is a principal source of revenue for city capital improvement and schools. There has already been a decrease in sales tax revenues in the last quarter of 2006.
Others say look at Bentonville. The impact fee for a single home in that city is $4,750 and the city is growing at a major pace.
The new impact fee will make Fayetteville’s the highest in NW Arkansas at $4,897. Springdale has no impact fees and has completed major improvements on their artery streets, as well as neighborhood streets, by sales taxes voted by residents and by bond issues. Rogers charges a $2600 “sewer and water hook-up” fee, which some call a disguised impact fee and which has been challenged in court.
However, the bottom line here is that developers in Fayetteville already pay impact fees for new-construction, which are passed on to the consumers of these homes. Developers also are required to install (at their own expense) new roads and other infrastructure items, such as water lines, sewer lines, etc. An additional road impact fee will basically be another tax, not just on developers and builders of new areas but on everyone who lives in Fayetteville. It’s a case of double taxation, despite what those in favor of the measure say. And it puts the burden of street improvements for older areas of Fayetteville on the developers of new areas. Is that fair?
Ultimately, money for additional (and much needed) street improvements will have to come from somewhere. If taxes need to be increased, so be it—let the voters decide as they have in the past. But let’s be honest.
I have a great concern that Election Day is just around the corner, and I don’t believe the majority of voters have taken an interest in the matter at hand. I encourage everyone to become informed and vote his or her conscience. I personally am going to vote NO.
Here are some links for further information:
http://www.nwanews.com/nwat/News/51665/
http://www.nwaonline.net/articles/2007/03/25/news/032607fzroadfees.txt
http://www.nwanews.com/nwat/News/51598/
http://www.nwanews.com/adg/News/186156/
http://www.nwanews.com/nwat/News/51075
http://www.nwanews.com/adg/Special/182334
http://www.nwanews.com/nwat/News/51559
http://www.citizens4fayetteville.org/
http://voteforfayetteville.org/
Monday, March 26, 2007
Women Buying Homes in Record Numbers
A majority of American women now live without a spouse according to a New York Times analysis of U.S. Census Bureau data. In other words, 51% of adult women in this country are on their own.
Though married couples continue to dominate the market, single women now purchase approximately 22% of all homes bought in this country. Single men constitute only 9% of home purchases.
I found that number surprising but looking a little deeper, it isn’t surprising at all. Today’s women are better educated than ever before. Women college graduates outnumber men 57 to 43. Women are more confident, earn more money, and are becoming increasingly sophisticated about financial matters. Many women wisely see homeownership as the best way to reach financial stability and security.
It wasn’t too many years ago that single women were basically shut out of homeownership because lenders did not want to grant mortgages to them. Now lenders offer a variety of non-traditional mortgage products to encourage women to become homeowners.
Outreach programs by Fannie Mae and Freddie Mac have helped first-time homebuyers and minorities get into their own homes. For example, divorced women are frequently given first time buyer status, thus making low down payment or subsidized loans available to them even if they owned a home in the marriage.
Child support payments can now be counted as income, which boosts the ability of many newly single parents to qualify for a mortgage.
Even recent college graduates are finding mortgages that enable them to become homeowners with only a small cash down payment.
And, women have discovered they don’t need a husband to put up a shelf or paint the living room. Thanks in part to large home improvement stores that offer classes on how to do just about anything to do-it-yourself television programs, women have become empowered. They are willing and able to take on projects their grandmothers would never have considered.
I frequently help single women purchase homes. I bought my first home in 1975, back in the days when single women rarely bought homes, and it was one of the best investments I ever made. Whether it’s your first home or you’re moving up, I will be happy to help you do the same. Call me at 479-966-0435.
For more information:
http://www.rismedia.com/wp/2007-02-12/as-the-nation-changes-so-do-home-buyers/
http://www.mortgagenewsdaily.com/7172006_Woman_Home_Buyers.asp
http://www.bankrate.com/brm/news/real-estate/women-buyers1.asp
Though married couples continue to dominate the market, single women now purchase approximately 22% of all homes bought in this country. Single men constitute only 9% of home purchases.
I found that number surprising but looking a little deeper, it isn’t surprising at all. Today’s women are better educated than ever before. Women college graduates outnumber men 57 to 43. Women are more confident, earn more money, and are becoming increasingly sophisticated about financial matters. Many women wisely see homeownership as the best way to reach financial stability and security.
It wasn’t too many years ago that single women were basically shut out of homeownership because lenders did not want to grant mortgages to them. Now lenders offer a variety of non-traditional mortgage products to encourage women to become homeowners.
Outreach programs by Fannie Mae and Freddie Mac have helped first-time homebuyers and minorities get into their own homes. For example, divorced women are frequently given first time buyer status, thus making low down payment or subsidized loans available to them even if they owned a home in the marriage.
Child support payments can now be counted as income, which boosts the ability of many newly single parents to qualify for a mortgage.
Even recent college graduates are finding mortgages that enable them to become homeowners with only a small cash down payment.
And, women have discovered they don’t need a husband to put up a shelf or paint the living room. Thanks in part to large home improvement stores that offer classes on how to do just about anything to do-it-yourself television programs, women have become empowered. They are willing and able to take on projects their grandmothers would never have considered.
I frequently help single women purchase homes. I bought my first home in 1975, back in the days when single women rarely bought homes, and it was one of the best investments I ever made. Whether it’s your first home or you’re moving up, I will be happy to help you do the same. Call me at 479-966-0435.
For more information:
http://www.rismedia.com/wp/2007-02-12/as-the-nation-changes-so-do-home-buyers/
http://www.mortgagenewsdaily.com/7172006_Woman_Home_Buyers.asp
http://www.bankrate.com/brm/news/real-estate/women-buyers1.asp
Thursday, March 22, 2007
2006 NW Arkansas Housing Market Report
I have just finished a marketing report for 2006 for NW Arkansas. It gives conditions of the housing market, absorption rate, the number of homes for sale by price range, and much more. The towns covered are Bentonville, Fayetteville, Rogers, Springdale, and Bella Vista. See what home prices have been doing in the past years to help understand what is happening in the market now as the needed "adjustment" is also occurring here. To view this report, visit my main website at http://www.judyluna.com and click on 2006 Market Report under Articles and Links on the left of the home page.
Do-it-Yourself Checklist
I’ve known people who seem to have the ability to do almost anything and do it well. Unfortunately, I’ve also known people who undertake tasks they never finish or when they are finished, you wish they never started.
If you are thinking about repairs or improvements to your home, please consider these points before you start:
Do I have all the skills to do the job right the first time?
Do I have the time required to do the job properly?
Can I actually do the work to a professional degree, or will it look as if an amateur did it?
Are all the right tools available? Can I afford to buy or rent all the right tools?
Have I considered all aspects of the job from beginning to end?
Do I need a license for electrical or plumbing tasks?
Do I need a building or zoning permit?
Is there a risk I will damage the home?
What do I risk if I do the work myself?
What is the possibility that I may be injured?
Will I lessen the value of my home?
All of these questions are fundamental but #11, “Will I lessen the value of my home?” is frequently overlooked by the do-it-yourselfer intent on saving some money. The question becomes vitally important when the homeowner wishes to sell the home.
Buyers will notice sloppy workmanship and it will affect their perception of the property. Sometimes a buyer will turn around and leave without any further consideration of the property.
Other times sloppy repairs (think crooked tile or a bad seam on the kitchen counter top) will result in a buyer offering several thousand dollars less on a property.
Even worse is a remodeling project that doesn’t meet local codes. That can be a nightmare.
So, I urge you to consider all aspects before you do-it-yourself. If you have the necessary expertise, fine. If you are not proficient, don’t shortchange yourself now. Have a qualified professional do the work.
For more information:
http://www.nwaonline.net/articles/2007/02/07/your_home/020807homeimprovement.txt
If you are thinking about repairs or improvements to your home, please consider these points before you start:
Do I have all the skills to do the job right the first time?
Do I have the time required to do the job properly?
Can I actually do the work to a professional degree, or will it look as if an amateur did it?
Are all the right tools available? Can I afford to buy or rent all the right tools?
Have I considered all aspects of the job from beginning to end?
Do I need a license for electrical or plumbing tasks?
Do I need a building or zoning permit?
Is there a risk I will damage the home?
What do I risk if I do the work myself?
What is the possibility that I may be injured?
Will I lessen the value of my home?
All of these questions are fundamental but #11, “Will I lessen the value of my home?” is frequently overlooked by the do-it-yourselfer intent on saving some money. The question becomes vitally important when the homeowner wishes to sell the home.
Buyers will notice sloppy workmanship and it will affect their perception of the property. Sometimes a buyer will turn around and leave without any further consideration of the property.
Other times sloppy repairs (think crooked tile or a bad seam on the kitchen counter top) will result in a buyer offering several thousand dollars less on a property.
Even worse is a remodeling project that doesn’t meet local codes. That can be a nightmare.
So, I urge you to consider all aspects before you do-it-yourself. If you have the necessary expertise, fine. If you are not proficient, don’t shortchange yourself now. Have a qualified professional do the work.
For more information:
http://www.nwaonline.net/articles/2007/02/07/your_home/020807homeimprovement.txt
Saturday, March 17, 2007
9th Graders to be Included in Fayetteville High School
The Fayetteville school board voted March 15 to add 9th graders to high school. Currently 9th graders attend two junior high schools.
The vote was tight – 4 members for, 3 against. By passing this item, the board accepted the recommendation of the Future of FHS Select Committee.
In February the board voted to accept the committee’s other recommendation – namely to continue operating only one high school.
Still unclear at this point is when the 9th graders will be added to high school and when/where the new high school will be built.
For more information:
http://www.fayar.net/admin/ftb_3-15-07.pdf
http://www.fayar.net/admin/ftb_2-22-07.pdf
The vote was tight – 4 members for, 3 against. By passing this item, the board accepted the recommendation of the Future of FHS Select Committee.
In February the board voted to accept the committee’s other recommendation – namely to continue operating only one high school.
Still unclear at this point is when the 9th graders will be added to high school and when/where the new high school will be built.
For more information:
http://www.fayar.net/admin/ftb_3-15-07.pdf
http://www.fayar.net/admin/ftb_2-22-07.pdf
Friday, March 16, 2007
Springdale Limits Parking Cars in Front Yards
The City of Springdale has passed some common-sense (but difficult to enforce) rules to reduce the number of vehicles parked in front yards.
An ordinance adopted by the City Council earlier this year will now begin to be enforced. It gives residents the opportunity to build one additional parking space no larger than 9 feet by 19 feet in their front yard. The new space must be landscaped and adjacent and parallel to an existing driveway. Residents are also allowed to pave up to 40% of their front yard for parking, and homes with existing gravel driveways will not be required to pave them.
Violators will be issued a citation on the first offense. After that fines of up to $500 for each offense and $250 per day for continued offenses will be assessed.
At first thought this may seem a bit unnecessary, but drive around the city and you will quickly understand the need for the ordinance. There are many neighborhoods where cars and trucks are parked all over the property. Sometimes the vehicle has a “For Sale” sign on it, other times it is simply a matter of too many vehicles for the size of the driveway. Worse yet are the vehicles in various stages of repair or those that will never again run on their own power.
On the other hand, the large number of vehicles in the yard in some neighborhoods is a reflection of the times. Many older homes and duplexes, for example, have only one-car garages. This may have been adequate in the past, when each family had only one car. But now, many families have more than one breadwinner and multiple vehicles. Older children may also have their own vehicle. There is simply no room to park all of them without parking on the lawn or blocking the street.
Another issue is that in rental areas, landlords could be asked to build additional parking spaces to accommodate their tenants’ needs. Concrete work is not cheap, so to build even one additional park pad can be prohibitively expensive. Also less affluent homeowners may not be able to do so. Luckily the Springdale ordinance allows for homeowners to apply for a variance with the Springdale Planning Commission in hardship cases.
And all of this is related to the issue of affordable housing (or the lack thereof). Increasingly low income area dwellings are home to multiple families, who share the dwelling in order to be able to afford the rent or mortgage payments. And with multiple families come multiple vehicles.
Overall, I think eliminating this eyesore will help maintain property values. But my question is WHERE (for multi-vehicle families in rental or low-income areas) the additional vehicles will be parked if the home’s owner is unwilling or unable to afford to build an additional park pad.
Enforcing this new ordinance is going to be difficult, if not impossible. If vehicles cannot be parked in the yard, they may end up being parked in the street, causing difficulty for traffic. They won’t go away, and fining property owners or tenants will not necessarily solve the problem.
Rogers is considering a similar ordinance.
For more information:
http://www.nwanews.com/story.php?paper=adg§ion=News&storyid=181226
http://www.nwaonline.net/articles/2007/03/11/news/031207rzcounciladv.txt
An ordinance adopted by the City Council earlier this year will now begin to be enforced. It gives residents the opportunity to build one additional parking space no larger than 9 feet by 19 feet in their front yard. The new space must be landscaped and adjacent and parallel to an existing driveway. Residents are also allowed to pave up to 40% of their front yard for parking, and homes with existing gravel driveways will not be required to pave them.
Violators will be issued a citation on the first offense. After that fines of up to $500 for each offense and $250 per day for continued offenses will be assessed.
At first thought this may seem a bit unnecessary, but drive around the city and you will quickly understand the need for the ordinance. There are many neighborhoods where cars and trucks are parked all over the property. Sometimes the vehicle has a “For Sale” sign on it, other times it is simply a matter of too many vehicles for the size of the driveway. Worse yet are the vehicles in various stages of repair or those that will never again run on their own power.
On the other hand, the large number of vehicles in the yard in some neighborhoods is a reflection of the times. Many older homes and duplexes, for example, have only one-car garages. This may have been adequate in the past, when each family had only one car. But now, many families have more than one breadwinner and multiple vehicles. Older children may also have their own vehicle. There is simply no room to park all of them without parking on the lawn or blocking the street.
Another issue is that in rental areas, landlords could be asked to build additional parking spaces to accommodate their tenants’ needs. Concrete work is not cheap, so to build even one additional park pad can be prohibitively expensive. Also less affluent homeowners may not be able to do so. Luckily the Springdale ordinance allows for homeowners to apply for a variance with the Springdale Planning Commission in hardship cases.
And all of this is related to the issue of affordable housing (or the lack thereof). Increasingly low income area dwellings are home to multiple families, who share the dwelling in order to be able to afford the rent or mortgage payments. And with multiple families come multiple vehicles.
Overall, I think eliminating this eyesore will help maintain property values. But my question is WHERE (for multi-vehicle families in rental or low-income areas) the additional vehicles will be parked if the home’s owner is unwilling or unable to afford to build an additional park pad.
Enforcing this new ordinance is going to be difficult, if not impossible. If vehicles cannot be parked in the yard, they may end up being parked in the street, causing difficulty for traffic. They won’t go away, and fining property owners or tenants will not necessarily solve the problem.
Rogers is considering a similar ordinance.
For more information:
http://www.nwanews.com/story.php?paper=adg§ion=News&storyid=181226
http://www.nwaonline.net/articles/2007/03/11/news/031207rzcounciladv.txt
Monday, March 12, 2007
January Home Prices Declined in Northwest Arkansas
According to an article in the business section of the Morning News last Monday, home prices began sliding down in Benton County (decrease of almost 6%) in January with a significant drop in sales (down 19.69% from January of 2006). At the same time, while average prices in Washington County also decreased by 11%, the number of sales increased by 8.28% compared to January of last year.
This is a good-news/bad-news scenario for Northwest Arkansas, depending on whether you are a buyer or a seller of a home. For sellers, it means that they may not be able to sell their home at the price they might have hoped had the market continued rising at the same pace as during the past several years. For buyers, it means that with lower prices, they might be able to get a nicer home in their price range, and perhaps more people will now be able to consider purchasing a home.
A positive trend, not mentioned in the article, is that an increasing supply of more modestly-prices homes has contributed to the decrease in the average price of homes sold. This is good news, since it means that builders have finally seen the light and started building more affordable homes. This is also good news for buyers who haven’t been able to afford a new home because prices for such homes were so high. For example, there are now new homes being built in Fayetteville for less than $150K (only 2 subdivisions so far, but hey, it’s a start). This price for a new home hasn’t been seen for several years in Fayetteville. And this trend also exists in other communities in NW Arkansas.
According to Kathy Deck of the U of A Center for Business and Economic Research, the decline in home sales could be the beginning of the kind of corrections which have been occurring elsewhere in the nation. Until recently the NW Arkansas real estate market has largely been immune to these trends.
For more specific data on the January Arkansas Home Sale figures, the Morning News article can be seen at:
http://www.nwaonline.net/articles/2007/03/05/business/030607arrealtors.txt
To view a copy of Judy’s Market Report for 2006, write her an email at judy@judyluna.com
This is a good-news/bad-news scenario for Northwest Arkansas, depending on whether you are a buyer or a seller of a home. For sellers, it means that they may not be able to sell their home at the price they might have hoped had the market continued rising at the same pace as during the past several years. For buyers, it means that with lower prices, they might be able to get a nicer home in their price range, and perhaps more people will now be able to consider purchasing a home.
A positive trend, not mentioned in the article, is that an increasing supply of more modestly-prices homes has contributed to the decrease in the average price of homes sold. This is good news, since it means that builders have finally seen the light and started building more affordable homes. This is also good news for buyers who haven’t been able to afford a new home because prices for such homes were so high. For example, there are now new homes being built in Fayetteville for less than $150K (only 2 subdivisions so far, but hey, it’s a start). This price for a new home hasn’t been seen for several years in Fayetteville. And this trend also exists in other communities in NW Arkansas.
According to Kathy Deck of the U of A Center for Business and Economic Research, the decline in home sales could be the beginning of the kind of corrections which have been occurring elsewhere in the nation. Until recently the NW Arkansas real estate market has largely been immune to these trends.
For more specific data on the January Arkansas Home Sale figures, the Morning News article can be seen at:
http://www.nwaonline.net/articles/2007/03/05/business/030607arrealtors.txt
To view a copy of Judy’s Market Report for 2006, write her an email at judy@judyluna.com
Sunday, March 11, 2007
Homeless Count in NW Arkansas Revised Upward
The number of homeless people in NW Arkansas has been revised from 839 to 1,170. The 839 number was the preliminary estimate taken from a census of the homeless in January. The census was conducted for the Northwest Arkansas Housing Coalition, which planned to use the information to help its members apply for federal grants.
In addition to the 1,170 homeless, many more people are close to being homeless. Agencies that provide services to the needy see numerous examples every week of people who will soon be homeless – those who are just one paycheck away from paying the rent or those who have to choose between eating or heating.
As if that information isn’t sad enough, recent reports say NW Arkansas agencies will receive no money from HUD this year to help the homeless. More than $1.4 billion in HUD Continuum of Care grants was awarded nationwide to approximately 5,000 local programs to provide emergency shelter, transitional housing and permanent support to homeless individuals and families, according to a HUD press release. Not even $1 will reach NW Arkansas!
What’s wrong with this picture?
For more information, see my post of February 11, 2007 “Recent Census Estimates 839 Homeless in NW Arkansas”
http://www.nwanews.com/nwat/News/50430/
http://www.nwanews.com/nwat/News/50431/
http://www.nwanews.com/story.php?paper=adg§ion=Special&storyid=182968
http://www.nwanews.com/nwat/News/50434/
In addition to the 1,170 homeless, many more people are close to being homeless. Agencies that provide services to the needy see numerous examples every week of people who will soon be homeless – those who are just one paycheck away from paying the rent or those who have to choose between eating or heating.
As if that information isn’t sad enough, recent reports say NW Arkansas agencies will receive no money from HUD this year to help the homeless. More than $1.4 billion in HUD Continuum of Care grants was awarded nationwide to approximately 5,000 local programs to provide emergency shelter, transitional housing and permanent support to homeless individuals and families, according to a HUD press release. Not even $1 will reach NW Arkansas!
What’s wrong with this picture?
For more information, see my post of February 11, 2007 “Recent Census Estimates 839 Homeless in NW Arkansas”
http://www.nwanews.com/nwat/News/50430/
http://www.nwanews.com/nwat/News/50431/
http://www.nwanews.com/story.php?paper=adg§ion=Special&storyid=182968
http://www.nwanews.com/nwat/News/50434/
Saturday, March 03, 2007
Future of Fayetteville High School Update
In a close decision, Fayetteville School Board voted 4-3 to continue operating only one school for all high school students in the district. Currently, that means grades 10-12.
There is much more to be considered. For example:
Will 9th grade be removed from Junior High to High School?
Will the present school somehow be expanded or abandoned in favor of a new school elsewhere?
If it is to be a new site, where will that be?
What are the costs of these decisions?
What is the resale value of the present high school property?
Is enrollment expanding enough to justify the expense?
The Future of Fayetteville High School Select Committee charged with evaluating the future of the high school recommended adding 9th grade to high school but the board did not vote on that subject.
My son graduated from FHS a few years ago so I feel justified in giving my opinion. I’m in favor of keeping 9th graders in junior high. They need another year of maturity and chances of leadership positions in junior high before being tossed into the high school where they are “small fish” in a very big pond.
I’m also in favor of one high school because I fear having two high schools may create a rivalry of sorts. One school may be perceived as better, or more modern, or have better labs and classes, etc. Or, and let’s hope this would not happen, one school may happen to have more affluent students because it’s located in a “better” part of town.
It is worth noting that while all these decisions are being made, Springdale and Rogers have each seen their enrollment go flat after several years of incredible expansion. Springdale’s enrollment has dropped about 100 students from the end of 2005-06 school year to the present time. Rogers has lost nearly 200 students.
Springdale is now postponing construction of several new schools that were planned.
I wish Fayetteville School Board well as they deal with these difficult decisions.
For more information:
See also my post “Last Chance to Influence Decision on Fayetteville’s High School Expansion” of February 8, 2007
http://www.nwanews.com/nwat/News/50372/
http://www.nwaonline.net/articles/2007/02/25/news/022607szattendanceboundary.txt
There is much more to be considered. For example:
Will 9th grade be removed from Junior High to High School?
Will the present school somehow be expanded or abandoned in favor of a new school elsewhere?
If it is to be a new site, where will that be?
What are the costs of these decisions?
What is the resale value of the present high school property?
Is enrollment expanding enough to justify the expense?
The Future of Fayetteville High School Select Committee charged with evaluating the future of the high school recommended adding 9th grade to high school but the board did not vote on that subject.
My son graduated from FHS a few years ago so I feel justified in giving my opinion. I’m in favor of keeping 9th graders in junior high. They need another year of maturity and chances of leadership positions in junior high before being tossed into the high school where they are “small fish” in a very big pond.
I’m also in favor of one high school because I fear having two high schools may create a rivalry of sorts. One school may be perceived as better, or more modern, or have better labs and classes, etc. Or, and let’s hope this would not happen, one school may happen to have more affluent students because it’s located in a “better” part of town.
It is worth noting that while all these decisions are being made, Springdale and Rogers have each seen their enrollment go flat after several years of incredible expansion. Springdale’s enrollment has dropped about 100 students from the end of 2005-06 school year to the present time. Rogers has lost nearly 200 students.
Springdale is now postponing construction of several new schools that were planned.
I wish Fayetteville School Board well as they deal with these difficult decisions.
For more information:
See also my post “Last Chance to Influence Decision on Fayetteville’s High School Expansion” of February 8, 2007
http://www.nwanews.com/nwat/News/50372/
http://www.nwaonline.net/articles/2007/02/25/news/022607szattendanceboundary.txt
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
Saturday, February 24, 2007
New Tax Cut Benefits Everyone in Arkansas
Effective July 1, 2007, the state sales tax on groceries will be cut in half – from 6% to 3%. The details are still being worked out but this much is definite: When you buy groceries for human consumption, you will be taxed 3% less than the current rate.
The average savings is estimated to be at least $200.00 per year for a family of four.
Other items you buy at the grocery store will continue be taxed at 6%. That includes such things as paper products, cleaning supplies, pet food, diapers, personal grooming items and miscellaneous household supplies.
The reduction in sales tax is possible because the State of Arkansas has a huge surplus on hand and that surplus seems to be increasing each month. One recent estimate is an $844 million surplus in the state’s coffers by June 30, 2007.
There are innumerable ways to spend the surplus – roads, education, tax rebates and reductions, health care, ad infinitum.
But here is the plain truth: No tax is more regressive and repugnant than a tax on food! Everyone has to eat and levying a sales tax on food simply means that the lower a person’s income, the higher the percentage of their income they must spend in order to feed their families.
I urge the legislature and Governor Beebe to eliminate the remaining 3% tax on groceries in the near future. But that might be hard--it would have been better not to tax food in the first place, as other states have done. But this tax cut is a step in the right direction.
Note: County and city sales taxes remain unchanged. It’s possible some local governments may find it possible to lower their tax rates in the future but they remain in place for now. For instance, Fayetteville, Springdale, Rogers, and Bentonville all have sales tax rates of 2%. In addition to the city taxes, Benton County assesses an additional 1% while Washington County’s sales tax rate is an additional 1.25%.
Please watch for an additional article I expect to write soon on other tax cuts already signed into law or under consideration in the legislature.
For more information:
http://www.nwanews.com/adg/National/182567/
http://www.nwaonline.net/articles/2007/02/16/topics/assembly07/021607lrleggrocerytax.txt
http://www.arkansas.gov/dfa/excise_tax_v2/et_su_local.html
The average savings is estimated to be at least $200.00 per year for a family of four.
Other items you buy at the grocery store will continue be taxed at 6%. That includes such things as paper products, cleaning supplies, pet food, diapers, personal grooming items and miscellaneous household supplies.
The reduction in sales tax is possible because the State of Arkansas has a huge surplus on hand and that surplus seems to be increasing each month. One recent estimate is an $844 million surplus in the state’s coffers by June 30, 2007.
There are innumerable ways to spend the surplus – roads, education, tax rebates and reductions, health care, ad infinitum.
But here is the plain truth: No tax is more regressive and repugnant than a tax on food! Everyone has to eat and levying a sales tax on food simply means that the lower a person’s income, the higher the percentage of their income they must spend in order to feed their families.
I urge the legislature and Governor Beebe to eliminate the remaining 3% tax on groceries in the near future. But that might be hard--it would have been better not to tax food in the first place, as other states have done. But this tax cut is a step in the right direction.
Note: County and city sales taxes remain unchanged. It’s possible some local governments may find it possible to lower their tax rates in the future but they remain in place for now. For instance, Fayetteville, Springdale, Rogers, and Bentonville all have sales tax rates of 2%. In addition to the city taxes, Benton County assesses an additional 1% while Washington County’s sales tax rate is an additional 1.25%.
Please watch for an additional article I expect to write soon on other tax cuts already signed into law or under consideration in the legislature.
For more information:
http://www.nwanews.com/adg/National/182567/
http://www.nwaonline.net/articles/2007/02/16/topics/assembly07/021607lrleggrocerytax.txt
http://www.arkansas.gov/dfa/excise_tax_v2/et_su_local.html
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
Sunday, February 11, 2007
Recent Census Estimates 839 Homeless in NW Arkansas
As the once-small towns of NW Arkansas grow, and the area becomes more urbanized, problems found in larger metropolitan areas are beginning to surface. One of these is homelessness.
Here the homeless are mostly invisible. Most people like it that way – if they don’t see the homeless, it is easy to put them out of mind. But the reality is that more than 800 men, women, and children are homeless in Benton and Washington Counties.
839 is the preliminary count of homeless people conducted over a 24-hour period January 25-26 by the four major cities of NW Arkansas (Fayetteville, Springdale, Rogers, and Bentonville).
The homeless situation in NW Arkansas is certainly not unique. There are homeless people all over the country, in cities and towns both large and small. I honestly don’t know whether the number of people needing help in NW Arkansas is higher or lower than national averages.
But I am shocked to learn that nearly 400 children are homeless! It is difficult to comprehend that 400 children in prosperous NW Arkansas face uncertainty, hunger, cold, and discomfort every day.
Some of the causes of homelessness are well known – mental health issues, lack of education or job training, drug/alcohol abuse, domestic abuse, and marital problems to name a few.
But I feel another major issue is the cost of living in NW Arkansas. It has become too expensive for the average worker. Many of the homeless actually have jobs but wages have not kept pace with the cost of living. Some walk to work, others ride a bicycle, the bus, or find someone who will give them a ride. I think some people are so discouraged and disheartened they come to believe their situation is hopeless.
The Northwest Arkansas Housing Coalition, which began in 2003, has an ambitious goal – to end homelessness within ten years. It represents about 30 organizations and cities in seven counties.
Census data will be used to formulate short and long term plans to help the homeless. The data will also be used in the coalition's Department of Housing and Urban Development Continuum of Care applications for federal assistance.
I applaud the coalition for everything they are doing and all they hope to do to help human beings who have so little. Their efforts are in dramatic contrast with those of some other cities, such as Orlando and Fort Myers, Florida; Dallas, Texas; Las Vegas, Nevada, Wilmington, North Carolina, and Atlanta, Georgia. Those cities have burgeoning homeless populations and are passing laws that would make it difficult to provide aid to them.
For more information:
http://www.nwanews.com/nwat/News/49478/
http://www.nwanews.com/story.php?paper=nwat§ion=News&storyid=49604
http://www.nwanews.com/story.php?paper=adg§ion=News&storyid=169315
http://www.nwanews.com/story.php?paper=adg§ion=National&storyid=180784
Here the homeless are mostly invisible. Most people like it that way – if they don’t see the homeless, it is easy to put them out of mind. But the reality is that more than 800 men, women, and children are homeless in Benton and Washington Counties.
839 is the preliminary count of homeless people conducted over a 24-hour period January 25-26 by the four major cities of NW Arkansas (Fayetteville, Springdale, Rogers, and Bentonville).
The homeless situation in NW Arkansas is certainly not unique. There are homeless people all over the country, in cities and towns both large and small. I honestly don’t know whether the number of people needing help in NW Arkansas is higher or lower than national averages.
But I am shocked to learn that nearly 400 children are homeless! It is difficult to comprehend that 400 children in prosperous NW Arkansas face uncertainty, hunger, cold, and discomfort every day.
Some of the causes of homelessness are well known – mental health issues, lack of education or job training, drug/alcohol abuse, domestic abuse, and marital problems to name a few.
But I feel another major issue is the cost of living in NW Arkansas. It has become too expensive for the average worker. Many of the homeless actually have jobs but wages have not kept pace with the cost of living. Some walk to work, others ride a bicycle, the bus, or find someone who will give them a ride. I think some people are so discouraged and disheartened they come to believe their situation is hopeless.
The Northwest Arkansas Housing Coalition, which began in 2003, has an ambitious goal – to end homelessness within ten years. It represents about 30 organizations and cities in seven counties.
Census data will be used to formulate short and long term plans to help the homeless. The data will also be used in the coalition's Department of Housing and Urban Development Continuum of Care applications for federal assistance.
I applaud the coalition for everything they are doing and all they hope to do to help human beings who have so little. Their efforts are in dramatic contrast with those of some other cities, such as Orlando and Fort Myers, Florida; Dallas, Texas; Las Vegas, Nevada, Wilmington, North Carolina, and Atlanta, Georgia. Those cities have burgeoning homeless populations and are passing laws that would make it difficult to provide aid to them.
For more information:
http://www.nwanews.com/nwat/News/49478/
http://www.nwanews.com/story.php?paper=nwat§ion=News&storyid=49604
http://www.nwanews.com/story.php?paper=adg§ion=News&storyid=169315
http://www.nwanews.com/story.php?paper=adg§ion=National&storyid=180784
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