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vbfl85

Housing Market in NWA

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vbfl85    4

NWA seems like its been going through a large housing boom much like the rest of the nation has been, however the national housing boom seems to be coming to an end. The number of new home starts has been on the decline for the last month or so. My question is, does NWA follow the national trends or is it ellite in that the number of housing starts is still on the rise?

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Aporkalypse    1

Just pure opinion but number of housing starts in NWA was more tied to immigration of middle and upper class workers employed by Wal-Mart, Tyson, and the other major corporations and their vendors/service companies that I don't think it will have much impact. Also, prices are too low there to really create a bubble.

In Dallas, we are seeing the market heat up as people from places like CA and FL are getting outpriced and looking for more affordable areas and I think that would apply to NWA as well. If NWA has a slowdown it will be related to a slowdown in hiring or the job market there, I would think, not to the national trend.

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Just pure opinion but number of housing starts in NWA was more tied to immigration of middle and upper class workers employed by Wal-Mart, Tyson, and the other major corporations and their vendors/service companies that I don't think it will have much impact. Also, prices are too low there to really create a bubble.

In Dallas, we are seeing the market heat up as people from places like CA and FL are getting outpriced and looking for more affordable areas and I think that would apply to NWA as well. If NWA has a slowdown it will be related to a slowdown in hiring or the job market there, I would think, not to the national trend.

I'd add that there really aren't any barriers to new development in NWA yet. There is still plenty of land for new homes, and so competition among developers and steady demand will keep the market relatively stable. It will take a long time for it to overheat, and its not going to devalue anytime in the near future either as long as people keep moving there, like me in a few weeks.

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Aporkalypse    1

I'd add that there really aren't any barriers to new development in NWA yet. There is still plenty of land for new homes, and so competition among developers and steady demand will keep the market relatively stable. It will take a long time for it to overheat, and its not going to devalue anytime in the near future either as long as people keep moving there, like me in a few weeks.

Of course, as we all know the only thing that could deflate the NWA market is a move by Wal-Mart to downsize or move its Benton Co operations. It's not looking "bloody likely" right now, just if it did occur you would see prices deflate by 50% in a matter of a month. That would be the only caveat I would have with long-term real estate investment in NWA. I would never put all of my eggs in one basket there as I might here in DFW.

Glad to see you're getting to go back to God's country.

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Of course, as we all know the only thing that could deflate the NWA market is a move by Wal-Mart to downsize or move its Benton Co operations. It's not looking "bloody likely" right now, just if it did occur you would see prices deflate by 50% in a matter of a month. That would be the only caveat I would have with long-term real estate investment in NWA. I would never put all of my eggs in one basket there as I might here in DFW.

Glad to see you're getting to go back to God's country.

Unless people simply stop shopping at Wal-Mart, NWA is virtually guaranteed job growth for years to come.

As you know, a big part of what inflates or deflates home prices in zip codes in DFW is school districts, crime rates, etc. These are issues that simply don't factor into the NWA equation, yet. It allows not only developers but cities to compete relatively equally right now for new housing, with a slight edge to Fayetteville and Bentonville in housing values.

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Aporkalypse    1

Unless people simply stop shopping at Wal-Mart, NWA is virtually guaranteed job growth for years to come.

As you know, a big part of what inflates or deflates home prices in zip codes in DFW is school districts, crime rates, etc. These are issues that simply don't factor into the NWA equation, yet. It allows not only developers but cities to compete relatively equally right now for new housing, with a slight edge to Fayetteville and Bentonville in housing values.

My concern ultimately would be about WM moving to a larger metro or spinning off part of the company (Sam's, Neighborhood Market ,etc) and that section moving off. As long as times are good I'm not too worried but at some point WM will hit a bump and when it does it will have to think about reorganizing.

The other more remote issue that could come up at some point is antitrust legislation against WM and a breakup of the company from that standpoint but in the general retail sector that would be tough to do, especially with companies like Target and Kohl's doing well despite competition with WM.

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My concern ultimately would be about WM moving to a larger metro or spinning off part of the company (Sam's, Neighborhood Market ,etc) and that section moving off. As long as times are good I'm not too worried but at some point WM will hit a bump and when it does it will have to think about reorganizing.

The other more remote issue that could come up at some point is antitrust legislation against WM and a breakup of the company from that standpoint but in the general retail sector that would be tough to do, especially with companies like Target and Kohl's doing well despite competition with WM.

Splintering of the company is a possibility.

Wal-Mart already keeps some of its tech jobs in CA.

I'm inclined to believe that if Wal-Mart Inc. was going to send more of its operations elsewhere, it would have occured ten years ago or so when it was tougher to recruit to NWA. With the increased amenities up there its got to be getting easier.

That said, there have been numerous shifts in philosphy since Sam died. I think we can count on WM doing whatever is best for their bottom line eventually and what that is ten or twenty years from now is anybody's guess.

I don't see how anti-trust laws could be applied to a retailer in a free, globalized marketplace in the near future. Could be stirred up if WM steps on the wrong political toes, but I doubt it would hold up.

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Aporkalypse    1

Splintering of the company is a possibility.

Wal-Mart already keeps some of its tech jobs in CA.

I'm inclined to believe that if Wal-Mart Inc. was going to send more of its operations elsewhere, it would have occured ten years ago or so when it was tougher to recruit to NWA. With the increased amenities up there its got to be getting easier.

That said, there have been numerous shifts in philosphy since Sam died. I think we can count on WM doing whatever is best for their bottom line eventually and what that is ten or twenty years from now is anybody's guess.

I don't see how anti-trust laws could be applied to a retailer in a free, globalized marketplace in the near future. Could be stirred up if WM steps on the wrong political toes, but I doubt it would hold up.

Since Sam died things have kept clicking along fairly well, though Sam's has struggled at times. My concern would be that if WM faltered some that you would see new leadership and that new leadership would look to move as part of a corporate reorganization. The longer that Sam's dead the more likely something like this is to happen. Very few of the companies near the top of the Fortune 500 are located outside of a top ten metro and the only one that is, Berkshire Hathaway, is similarly one man's (in this case living) legacy. My worry is that like Boeing they would start by just relocating the top tier and later the tiers beneath this would follow. If it did happen, I would suspect DFW would be the beneficiary because of the airport and the fact it's WM's largest market.

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Since Sam died things have kept clicking along fairly well, though Sam's has struggled at times. My concern would be that if WM faltered some that you would see new leadership and that new leadership would look to move as part of a corporate reorganization. The longer that Sam's dead the more likely something like this is to happen. Very few of the companies near the top of the Fortune 500 are located outside of a top ten metro and the only one that is, Berkshire Hathaway, is similarly one man's (in this case living) legacy. My worry is that like Boeing they would start by just relocating the top tier and later the tiers beneath this would follow. If it did happen, I would suspect DFW would be the beneficiary because of the airport and the fact it's WM's largest market.

I agree that if a relocation is ever considered, DFW would make the most sense.

There are many, many companies here now that originated in the midwest.

Pizza Hut and Rent A Center are two from Kansas that come to mind.

I'm inclined to believe that the Wal-Mart brass at the top likes their little place at the top of the hill in NWA and the easy life up there. I believe those two examples were companies that were purchased prior to moving to DFW. I think its safe to say that nobody is buying Wal-Mart anytime soon.

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Aporkalypse    1

I agree that if a relocation is ever considered, DFW would make the most sense.

There are many, many companies here now that originated in the midwest.

Pizza Hut and Rent A Center are two from Kansas that come to mind.

I'm inclined to believe that the Wal-Mart brass at the top likes their little place at the top of the hill in NWA and the easy life up there. I believe those two examples were companies that were purchased prior to moving to DFW. I think its safe to say that nobody is buying Wal-Mart anytime soon.

I agree though any number of companies voluntarily relocated in places like DFW, Atlanta, and Chicago.

JC Penney started in Wyoming and moved to Salt Lake City and later to New York before ending up in DFW much later. American Airlines moved from New York. Kimberly-Clark moved from Wisconsin decades after it was founded. Dean Foods moved from Illinois. Frito-Lay started in San Antonio. Triad hospitals relocated from somewhere just 3 or 4 years ago, I think it was CA-based. These are all Fortune 500 cos that moved voluntarily, they weren't purchased.

It's just important to recall that most of the companies that were kings of the hill 30 years ago no longer are so. Go back 50 yrs and most of the Fortune 500 are no longer around or are quite changed. I don't see WM being threatened now but I think much of what dominates now won't in 30 yrs. I guess ultimately it's just what happens to WM when it hits a bump. It's inevitable that it will, it's just a matter of what the leadership will choose to do.

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Mith242    69

As was mentioned earlier, as time goes on anything is possible. I don't forsee wal-mart leaving anytime in the near future but if there was a problem or a slowdown the company is probably going to do what's best for the company. I do think there could be a bigger chance of this happening as time goes on, as the company changes from the one that Sam ran. But for now as long as everything is running well I doubt it will happen. Getting back to the original topic. There's a bit of a slowdown but it has more to do with developers all going for the more expensive houses and such. I think once they start building more homes under $200,000 things will pick back up again. The national trend will have some influences but overall this area seems to not be too influenced by things like that. The recession after 9-11 wasn't really felt here.

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KJW    77

As was mentioned earlier, as time goes on anything is possible. I don't forsee wal-mart leaving anytime in the near future but if there was a problem or a slowdown the company is probably going to do what's best for the company. I do think there could be a bigger chance of this happening as time goes on, as the company changes from the one that Sam ran. But for now as long as everything is running well I doubt it will happen. Getting back to the original topic. There's a bit of a slowdown but it has more to do with developers all going for the more expensive houses and such. I think once they start building more homes under $200,000 things will pick back up again. The national trend will have some influences but overall this area seems to not be too influenced by things like that. The recession after 9-11 wasn't really felt here.

Mith,

- If a Wal-Mart pullout ever happened, I'd think there'd be some ANGRY vendors. Sure, they'll go where the biggest retailer in the world goes, but there's some serious coin that's been put up by some of these guys (i.e. Kraft, NewellRubbermaid, Proctor & Gamble...)

- Where would Wal-Mart go? I'd think with all the anti-WM sentiment they might not look at the east or west coasts (who knows), but the city I've always heard (and I've not heard this worried about too often recently) is Dallas. My thought to that would be: "Why would they go to Dallas where they're just another multi billion dollar company. Here, they are Bentonville.

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Mith242    69

Mith,

- If a Wal-Mart pullout ever happened, I'd think there'd be some ANGRY vendors. Sure, they'll go where the biggest retailer in the world goes, but there's some serious coin that's been put up by some of these guys (i.e. Kraft, NewellRubbermaid, Proctor & Gamble...)

- Where would Wal-Mart go? I'd think with all the anti-WM sentiment they might not look at the east or west coasts (who knows), but the city I've always heard (and I've not heard this worried about too often recently) is Dallas. My thought to that would be: "Why would they go to Dallas where they're just another multi billion dollar company. Here, they are Bentonville.

I'm not saying they will ever leave. But we do have to also consider the possibility. I think if they ever decide it could be more cost effective to be based in a city like Dallas then they very well could decide to leave one day. But if that day does come I think it will be a while down the road. As Aporkalypse stated, I don't think they'd look too seriously into the matter unless things weren't as good for the company as they are now. I'm sure the vendors wouldn't be happy but I'm also sure that Wal-mart makes some of them angry by things they do now. Right now it's hard for any vendor to be too mad at them though because what are they going to do pull their products out of Wal-mart?

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vbfl85    4

Correct me if im wrong but isnt walmart involved politically in many of the infrastructure projects (highway projects, xna, etc.). And if they are then why would they want to build this area up now, if they had plans on pulling out later.

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Mith242    69

Correct me if im wrong but isnt walmart involved politically in many of the infrastructure projects (highway projects, xna, etc.). And if they are then why would they want to build this area up now, if they had plans on pulling out later.

I'm sure they've helped but I'm not sure if they're very involved with many of the infrastructure projects. I'm sure they aren't planning to leave but as time goes on and it gets further away from the company that Sam Walton built up I still think it's a possibility whether it be small or not of them leaving one day. If they did it would be because it was more cost effective to be in a larger metro like Dallas. But they're not going to spend the money to move just because they feel like it. There will have to be a good reason.

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strmchsr77    65

I don't see WM leaving any time soon if ever. In NWA they are the #1 company just like around the nation. Everyone here caters to their every need. Vendors stand in line to get office space in the metro, just to serve them. Development is occuring just to please people that are connected to them. Why would you ever leave if you get pretty much everything you want.

Many cities fight against WM and won't even let them build a store, so you can cut out places like California and Chicago.

If WM moves then 100s of companies are affected, just another reason WM should be happy right where they are.

NWA is also growing right along with WM, more and more white collar jobs as well as hi-tech jobs are coming to the area. Why would WM spend millions to move when everyone can just move to them???

In today's world location is not as important as it used to be (unless you are a much smaller company). Not everything happens in person. Many meetings are held via computer/videophone/or whatever. So basically, you don't have to be in New York/LA/Dallas to have meetings, so you can save money on flights. Anyway, my poiont is that NWA will get to major metro status soon enough to keep WM from needing or wanting to move.

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masons_dad1    0

I'll just throw my 2 cents in...

If Wal-Mart closes shop in Bentonville they would relocate to the U.K. not DFW. Just like Disney, Wal-Mart is looking at global expansion. Besides, any bump in the road that could topple Wal-Mart would pretty much topple the United States economy so let's hope Wal-Mart doesn't hit any bumps. :D

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I'll just throw my 2 cents in...

If Wal-Mart closes shop in Bentonville they would relocate to the U.K. not DFW. Just like Disney, Wal-Mart is looking at global expansion. Besides, any bump in the road that could topple Wal-Mart would pretty much topple the United States economy so let's hope Wal-Mart doesn't hit any bumps. :D

No way. I figure they will move to China.

The UK is WAY too expensive for Wal-Mart. I'm sure China has more windowless, cavernous warehouses in which they can assemble their cubicle-army, and at everyday lower prices.

Plus it makes sense that they move closer to their manufacturing base.

:shades:

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mcheiss    1

No way. I figure they will move to China.

The UK is WAY too expensive for Wal-Mart. I'm sure China has more windowless, cavernous warehouses in which they can assemble their cubicle-army, and at everyday lower prices.

Plus it makes sense that they move closer to their manufacturing base.

:shades:

I doubt they would move to China, the country would have too much control over it.

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Aporkalypse    1

Mith,

- If a Wal-Mart pullout ever happened, I'd think there'd be some ANGRY vendors. Sure, they'll go where the biggest retailer in the world goes, but there's some serious coin that's been put up by some of these guys (i.e. Kraft, NewellRubbermaid, Proctor & Gamble...)

- Where would Wal-Mart go? I'd think with all the anti-WM sentiment they might not look at the east or west coasts (who knows), but the city I've always heard (and I've not heard this worried about too often recently) is Dallas. My thought to that would be: "Why would they go to Dallas where they're just another multi billion dollar company. Here, they are Bentonville.

I think the vendors would be thrilled to move their operations to a more accessible place where it's easier to find quality employees to staff their satellite offices.

I agree that the concessions benefitting WM that it gets by being the dominant business locally are a big help.

On the other hand, the talent pool of people WM could find to work for it would be much deeper and broader in a major metro and I assure even Dallas or Chicago would offer a massive incentive package to encourage a move like that. When Boeiing left Seattle recently there was a bidding war between these two for their corporate relocation. I also disagree that NWA is on its way to becoming a major metro, at best it will become a LR, Wichita, or Tulsa - it will never be "major".

Again, I don't think anything will happen anytime soon. I just think when the company hits a few bumps down the road and Sam's legacy isn't so fresh they might follow the same road most other large corporations have and move to a larger market.

Talk about moving to UK or China is ridiculous. It would hurt them tremendously in the domestic market where almost all of its profits derive and impose new restrictions and taxation on it. Do you know anything about British corporate taxes?

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I think the vendors would be thrilled to move their operations to a more accessible place where it's easier to find quality employees to staff their satellite offices.

I agree that the concessions benefitting WM that it gets by being the dominant business locally are a big help.....

.......On the other hand, the talent pool of people WM could find to work for it would be much deeper and broader in a major metro and I assure even Dallas or Chicago would offer a massive incentive package to encourage a move like that.

Great points. I hadn't considered the incentives offered by big metros for relos, although I had considered the talent pool.

Talk about moving to UK or China is ridiculous.

I was kidding about China and jabbing at WM's contribution to the trade deficit. I think the other poster wasn't totally serious about the UK either.

We need a sarcasm tag.

I also think you're being more realistic about NWA, about it not being considered a major metro in the future. I think seeing it reach the size of the LR metro in the next 10-20 years is realistic.

"Major metro" itself is a moving target. I read online that at the current rate, 150,000 people move to DFW every year.

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Mith242    69

Very good points. As I said earlier I don't think anyone is predicting Wal-mart to leave but I think people should look at it and realize that it is possible. Maybe not likely anywhere in the near future but still possible.

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vbfl85    4

I agree with DickSonstreetDFW and Aporkalypse, NWA will not become a major metro manly because it can't grow fast enough to outpace current major metros. Therefore it will always be smaller.

Second even if it could grow fast enough there is too much infrastructure that would have to be built and the local and state officials can't fulfill those infrastructure needs fast enough for NWA to become a major metro.

As much as i would like to see it happen it wont. If it passed Little Rock MSA in 20 years it would be lucky, meaning it would have to outgrow LR by 250,000 in 20 years. Thats 12,500 more per year... I dont see that happening based on current trends. NWA will have to bring its growth rate to the next level.

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RemusCal    8

I agree with DickSonstreetDFW and Aporkalypse, NWA will not become a major metro manly because it can't grow fast enough to outpace current major metros. Therefore it will always be smaller.

Second even if it could grow fast enough there is too much infrastructure that would have to be built and the local and state officials can't fulfill those infrastructure needs fast enough for NWA to become a major metro.

As much as i would like to see it happen it wont. If it passed Little Rock MSA in 20 years it would be lucky, meaning it would have to outgrow LR by 250,000 in 20 years. Thats 12,500 more per year... I dont see that happening based on current trends. NWA will have to bring its growth rate to the next level.

It really all depends on the job growth. If we can become a tech center of the midwest, I could see us continuing this trend. Equally as well, if a major attraction, like Disney, came to the area, it could keep the growth up as well. It will all depend on if NWA can attract new start-up companies to the area. I think it could happen especially with all the wealth in the area.

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itk    0

Great points. I hadn't considered the incentives offered by big metros for relos, although I had considered the talent pool.

I was kidding about China and jabbing at WM's contribution to the trade deficit. I think the other poster wasn't totally serious about the UK either.

We need a sarcasm tag.

I also think you're being more realistic about NWA, about it not being considered a major metro in the future. I think seeing it reach the size of the LR metro in the next 10-20 years is realistic.

"Major metro" itself is a moving target. I read online that at the current rate, 150,000 people move to DFW every year.

Yes, he was obviously being sarcastic. I laughed out loud.

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