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Housing market in Fayetteville


mzweig

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My neighbor just bought a 1400 square foot house two days ago on Duncan St. in Fayetteville near the high school for $65 or $67K at auction. He said there was only one other bidder! He will easily make a $50K profit if he sells it as is.

There are still bargains out there for those who track them down.

Holy cow, that's a great location. For that price, I bet he could easily rent that out for way more than he would pay for it, assuming it doesn't need a huge face lift.

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My wife and I are looking into those governement seizures. It's amazing that there are somewhere around 30,000 houses in Arkansas alone that are up for auction since the owners refused or were unable to pay property taxes on them. There was a big deal about a Fayetteville property owner who's house was sold at auction then he sued Fayetteville because he claims he never received notice even thought they mailed out 2 notices to the owner. I'm not sure who won that deal.

The lenders have noticed a disturbing trend where people that are locked into ARMs or interest only mortgages to get into houses they really could't afford are being foreclosed on left and right and it's really quite early to this occurring (the foreclosure process is actually quite long and takes several months). I bet you'll see some good deals in Benton Co (as well as West LR) on foreclosures over the next year on homes that are less than 5 years old.

I'm not ballsy enough nor have the time to hunt for the foreclosure auctions and try to rehab the houses but the opportunity will be there to make a ton of money soon enough.

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The lenders have noticed a disturbing trend where people that are locked into ARMs or interest only mortgages to get into houses they really could't afford are being foreclosed on left and right and it's really quite early to this occurring (the foreclosure process is actually quite long and takes several months). I bet you'll see some good deals in Benton Co (as well as West LR) on foreclosures over the next year on homes that are less than 5 years old.

I'm not ballsy enough nor have the time to hunt for the foreclosure auctions and try to rehab the houses but the opportunity will be there to make a ton of money soon enough.

Good point. I have heard similar stories that are going to be some good buys in subdivisions come winter. Many people who tend to buy this kind of house have gotten overextended and have too much debt. If they lose their jobs they are screwed and fast when their overhead is way too high. This is just one more reason why I see this side of the housing market as different from the older homes close in to town. Different buyers and they will be impacted differently by an economic slowdown.

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  • 2 weeks later...

I heard an interesting observation from a good friend of mine who owns a real estate agency in town, that being that newcomers to the area are getting scared of the falling residential market in Bentonville and Rogers and taking a look at Fayetteville instead. Our market is holding up bettter over here.

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I heard an interesting observation from a good friend of mine who owns a real estate agency in town, that being that newcomers to the area are getting scared of the falling residential market in Bentonville and Rogers and taking a look at Fayetteville instead. Our market is holding up bettter over here.

It's funny because the real estate agents in Benton County are saying just the opposite. Not being competetive, just saying that's what they all say. Personally I don't trust real estate agents. There's a lot of people buying more home than their budget can handle because of overzealous real estate agents.

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It's funny because the real estate agents in Benton County are saying just the opposite. Not being competetive, just saying that's what they all say. Personally I don't trust real estate agents. There's a lot of people buying more home than their budget can handle because of overzealous real estate agents.

What you say is very true and you're smart to do your own homework. There are a lot of creative financing options these days that will allow you to buy more than you can afford. In actuality, nobody should be buying a house that approaches what they qualify for. Nobody accounts for rising property taxes and insurance, maintenance costs, etc.

I think NWA is a pretty safe market overall but it's obvious that Benton Co's inventory is growing and builders are overextending themselves. I think that might actually help you find a good bargain there. I am a bit worried with all of the proposed new developments. It's almost like the homebuilders are blindly optimistic because of all the growth and don't see the potential for disaster because they haven't experienced it.

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It's funny because the real estate agents in Benton County are saying just the opposite. Not being competetive, just saying that's what they all say. Personally I don't trust real estate agents. There's a lot of people buying more home than their budget can handle because of overzealous real estate agents.

Amen to not trusting most real estate agents. That said, this buddy of mine is a real no B.S. guy. And you are right--too many people spend way too much on houses. I don't believe in it myself hence the reason I have no mortgage. When I left the Boston area to come back to this part of the world, I had a $6200/mo. house payment!

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  • 3 weeks later...

I thought I would post some numbers I found in my paper today for statewide home sales:

County:---------------Jan.-Aug. 2006--------Jan.-Aug. 2005--------Percent Change

Pulaski----------------3,987-------------------4,070------------------- (-2.04%)

Benton----------------3,336-------------------3,684------------------- (-9.45%)

Washington-----------1,977-------------------2,166------------------- (-8.73%)

Saline-----------------1,321-------------------1,160------------------- (+13.88%)

Faulkner--------------1,313-------------------1,006------------------- (+30.52%)

Statewide------------ 22,379------------------22,200----------------- (+0.81%)

I think we have seen the best we will see in NWA. I expect sales to go down further in Benton County.

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I thought I would post some numbers I found in my paper today for statewide home sales:

County:---------------Jan.-Aug. 2006--------Jan.-Aug. 2005--------Percent Change

Pulaski----------------3,987-------------------4,070------------------- (-2.04%)

Benton----------------3,336-------------------3,684------------------- (-9.45%)

Washington-----------1,977-------------------2,166------------------- (-8.73%)

Saline-----------------1,321-------------------1,160------------------- (+13.88%)

Faulkner--------------1,313-------------------1,006------------------- (+30.52%)

Statewide------------ 22,379------------------22,200----------------- (+0.81%)

I think we have seen the best we will see in NWA. I expect sales to go down further in Benton County.

Possibly but I guess I'm still not ready to be too gloomy about future home sales here. I still think once developers adjust to what people want things will improve. But I admit it might not ever quite be as hot as it once was.

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I thought I would post some numbers I found in my paper today for statewide home sales:

County:---------------Jan.-Aug. 2006--------Jan.-Aug. 2005--------Percent Change

Pulaski----------------3,987-------------------4,070------------------- (-2.04%)

Benton----------------3,336-------------------3,684------------------- (-9.45%)

Washington-----------1,977-------------------2,166------------------- (-8.73%)

Saline-----------------1,321-------------------1,160------------------- (+13.88%)

Faulkner--------------1,313-------------------1,006------------------- (+30.52%)

Statewide------------ 22,379------------------22,200----------------- (+0.81%)

I think we have seen the best we will see in NWA. I expect sales to go down further in Benton County.

That is a considerable drop in home sales for Ben-Wash counties. I'd say those numbers will accelerate by next year to double digit losses. It'll take around 5-10 years for developers to take a chance on low cost homes. Add the fact that eventually the land values will follow suit and start dropping in value. I feel bad for all those people paying 5% over appraised value only to find out their home is worth 5% less than they payed for it in 10 years.

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That is a considerable drop in home sales for Ben-Wash counties. I'd say those numbers will accelerate by next year to double digit losses. It'll take around 5-10 years for developers to take a chance on low cost homes. Add the fact that eventually the land values will follow suit and start dropping in value. I feel bad for all those people paying 5% over appraised value only to find out their home is worth 5% less than they payed for it in 10 years.

I don't know if it will take them that long. I think they'll start making some cheaper homes than that. I guess the bigger question is how much cheaper homes will they make. I'm also not sure I'd be ready to say a lot of homes are going to lose value also.

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I don't know if it will take them that long. I think they'll start making some cheaper homes than that. I guess the bigger question is how much cheaper homes will they make. I'm also not sure I'd be ready to say a lot of homes are going to lose value also.

I really hope you're right, but in this inflated market you can buy a brand new $90,000 house for only $130,000. I want to buy a $90,000 for $90,000. Which is why I'm waiting for some of the air to be let out of the housing market here, which won't be long now.

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I really hope you're right, but in this inflated market you can buy a brand new $90,000 house for only $130,000. I want to buy a $90,000 for $90,000. Which is why I'm waiting for some of the air to be let out of the housing market here, which won't be long now.

If I was to guess I think developers will start going with cheaper homes but if I were to guess I don't know if they're going to be doing much under $150,000. I know that won't make everyone happy but it's still better than all the $350,000 homes that had been being built.

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If I was to guess I think developers will start going with cheaper homes but if I were to guess I don't know if they're going to be doing much under $150,000. I know that won't make everyone happy but it's still better than all the $350,000 homes that had been being built.

The problem with that is anyone who can afford a home priced over $150,000 is usually able to go higher than that and developers will feed off that. An affordable starter home based on the national market is still in the "under $100,000" price range. Being that NWA is an inflated real estate market right now the percentage of renters is increasing in an area that already has a higher percentage of renters than the national average.

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The problem with that is anyone who can afford a home priced over $150,000 is usually able to go higher than that and developers will feed off that. An affordable starter home based on the national market is still in the "under $100,000" price range. Being that NWA is an inflated real estate market right now the percentage of renters is increasing in an area that already has a higher percentage of renters than the national average.

A lot of those $150K buyers are stretched to the max, believe me! Don't wait around for new $90K houses. It aint gonna happen here unless you are way out of town....

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A lot of those $150K buyers are stretched to the max, believe me! Don't wait around for new $90K houses. It aint gonna happen here unless you are way out of town....

I agree and I doubt that there will ever be any homes priced under $110K anywhere, unless they're old fix'em up deals. I've been seeing quite a few brand new 3 bedroom/2 baths going for right about $113K in the Pea Ridge area and the same homes in Centerton and west Bentonville going for around $125K. I'm hooping that by the time I'm able to buy land prices will have settled down some and newer homes may drop closer to $100K. Either that or the same $113K today will buy more home with a bigger yard in just a few years.

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I agree and I doubt that there will ever be any homes priced under $110K anywhere, unless they're old fix'em up deals. I've been seeing quite a few brand new 3 bedroom/2 baths going for right about $113K in the Pea Ridge area and the same homes in Centerton and west Bentonville going for around $125K. I'm hooping that by the time I'm able to buy land prices will have settled down some and newer homes may drop closer to $100K. Either that or the same $113K today will buy more home with a bigger yard in just a few years.

I have always been fascinated with modular and panelized houses. They can be done right--put on proper foundations--designed with some style--and really look good. One of the manufacturers is doing a bungalow-style house that has a full width porch at one end and you'd never know it was modular if it was set up properly. My daughter is looking at modular and panelized log houses, too--some are affordable.

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I have always been fascinated with modular and panelized houses. They can be done right--put on proper foundations--designed with some style--and really look good. One of the manufacturers is doing a bungalow-style house that has a full width porch at one end and you'd never know it was modular if it was set up properly. My daughter is looking at modular and panelized log houses, too--some are affordable.

I'm looking into Arkansas companies that build "foundation homes". They're similar to modular homes and generally are supposed to cost 25-30% less than the average cost or as low as $46 per square foot. You just provide the land and they custom build your home with all sorts of options. So far I only know of a builder in the Little Rock area www.arfoundationhomes.com.

I heard that Brandon Barber is going to build 200 affordable homes in Bentonville in the 120K range. I was a bit shocked to hear this, since he's only been doing large-scale projects for the rich.

Sounds good. I would love to see what kind of homes he has planned. The new homes already going for under $130K are 3 bed/2 bath with garage and generally around 850 square feet on 3/4 acres. For him to build them cheaper they would have to be either smaller or lower quality than what is already being built.

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I'm looking into Arkansas companies that build "foundation homes". They're similar to modular homes and generally are supposed to cost 25-30% less than the average cost or as low as $46 per square foot. You just provide the land and they custom build your home with all sorts of options. So far I only know of a builder in the Little Rock area www.arfoundationhomes.com.

Interesting! Thanks for referring me to this site. These are quite affordable. No utility hookups, driveways, patios, or landscaping is keeoing their cost dowsn.

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I heard that Brandon Barber is going to build 200 affordable homes in Bentonville in the 120K range. I was a bit shocked to hear this, since he's only been doing large-scale projects for the rich.

I wonder if he'll ever do this in any of the other NWA cities.

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I dunno why this topic was moved to coffeehouse since it is a discussion of real estate. That said, back on the topic of the Fayetteville housing market....the house across the street from the one I am redoing at 412 E. Lafayette and one house further away from Dickson sold for $499K in one day. It has 2600 square feet. The buyers promptly gutted it and are now spending upwards of $300-350K on improvements. Those include a new massive stone fireplace, new landscaping, new faux slate roof, etc. For those of you who think everyone buys based on cost per square foot this is an example of what is happening in the downtown/close-in market. They ain't making any more historic houses in historic neighborhoods. Prices are still very strong for houses that are done properly (no vinyl, no aluminum soffits, no cheesy kitchens and baths, etc.) in the right neighborhoods (ones where people are taking care of their properties and that are convenient and have character.)

M

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I'll move it back, sorry. I thought it was a general topic on Housing, not particular developments.

Thanks, Man, no problem! We all appreciate what you do for us here.

One additional observation. I have seen more and more FSBOs lately (for sale by owner). It seems that many are getting tired of paying 6% commissions to realtors and trying it on their own. I think this can be risky and use realtors myself but the cost savings can be significant.

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