Outlook for 2018 and Beyond
9/1/2018 Well, there has been a lot of water go under the bridge since my last missive. Time for an update!!
The real estate market continues to gradually and steadily increase in price here in NWA, even in the face of slightly rising interest rates. The residential market continues to lead the way higher with particularly the Bentonville market continuing to stair step up. The rental market continues to be in tight supply. It seems that in Rogers or Bentonville markets that anything existing under $175,000 that doesn't need a tremendous amount of repair is being purchased and leased out. This cycle continues to put pressure on the homebuyer that needs to be in the first-time or affordability categories. New housing construction that falls into that price category seems to be lacking at the present time.
The days ahead in the real estate markets seem to me to not be as bright as in the past 5 years. I believe new buyers need to proceed with caution, not expecting an ever increasing market to bail them out of a tough situation should one arise.
I believe that new and exciting innovations are taking place in electronic currencies, secure transfer systems and all the affiliated ways that will speed commerce on a worldwide basis and that it will affect real estate in a positive light with new ways of much faster and more secure deed transfer of property, fractional ownership and securitization soon becoming commonplace realities. New and better things are on the horizon!! Keep the Faith and Soldier On. But keep some powder dry...
-- Jeff
Outlook for 2013
November 7th, 2012 Well the Presidential election is over for this cycle and I wanted to update you on my thoughts for the real estate market going forward for 2013 and beyond.
It seems to me that the past is prologue in our local market. The foreclosure side of the market is steady and I think will continue steady in number of units coming to the market for the foreseeable future. Not adding more supply percentage-wise, but still remaining a significant portion of our local NWA housing market. The "regular" housing market continues to show a very small (0-3%) increase in overall average price improvement this year and I think there is a good chance that will accelerate in the coming year. The monies that have been distributed to the 6 major real estate lending banks in the past 3 years has been phenomenal and with the Fed's commitment to purchase $45 billion in mortgage backed securities on top of the 40 billion already committed to, that $85 billion every month is going to have an effect sooner and later. In short, I believe inflation has a running chance of returning this year, building up a head of steam and affecting prices upward at an increasing rate in the years ahead.
It is a good time for credit-worthy borrowers that can acquire income producing/investment real estate to do so now, with low interest rates locked in, especially with the excellent rental environment we are experiencing presently. I think that they will be rewarded handsomely on a nominal basis in the next few years.
As well, this is looking to be the best time in my 23 years of brokerage for new/first time homebuyers to give wings to their home ownership dreams. I don't subscribe to the thoughts of some that there may be another hit to prices before a housing bottom is found. I feel that is behind us for this cycle, not ahead of us.
My dearly departed Grandpa Allen sat me at his side many times and gave business lessons, some that I clearly remember. One of those was that "you can do business paying 4% interest." I didn't think that would ever be seen again.
That was one of those "depression circumstances." Well, here we are right back there again. It's time to do business!! Best wishes to your and yours in 2013.
-- Jeff
Greetings and Merry Christmas! December 2009 My hope is that my 3rd annual Christmas letter and outlook for 2010 finds you well and successful. After reviewing the previous letters I have written, I wish that I could report that positive change has occurred; that the real estate market has clawed its way back up to its previous value and activity, and that it is clear sailing ahead.
Unfortunately, I cannot. It seems that the residential side has been helped by the taxpayers subsidizing some homebuyer?s purchases, but I think it has served to just help keep enough optimism in the market to keep lower end homebuilders operating and adding to inventory. We still do not need any more new home building in this market and won?t for some time, yet.
The majority of commercial and bare land sales have stopped. Activity continues to center around leasing. People continue to be tentative in their decision making. Uncertainty over the possible changes that may come from cap and trade and new taxes on small businesses and individuals to support new health care regulations have been major factors in this trend.
I still think that the real estate market has the opportunity to be a real tangible asset/store-of-value-play in the future; much like gold continues to be. The dollar value continues to be debased by government officials and Federal banking policies, causing continued market distortions. There is an unfortunate disconnect between what is said and what is reality in the market place. So much so that lying, deceit, and outright theft is so common that the reports of them are thought of as passé.
We need to turn back to our Christian principles of rule of law, everyone is equal under our laws, and there are consequences of justice for law breakers. Hopefully we can turn back to a nation with true freedom, liberty, and justice for all.
In conclusion, I would like to restate that I hope this Christmas finds you well and whole. I believe there will be great challenges ahead in 2010. Hope and pray for the best, but prudently prepare for a much lesser scenario. Happiness, true joy, and peace in your family and for yourselves depend on what is on the inside. I pray that we will be strong in 2010 to effect positive change in the NW Arkansas Community.
As always, you are welcome to call me or come in and see me to discuss your property value, market trends, or business needs. I will be happy to help you sort out myth from reality and to help you set a course for success.
May God bless you and provide wisdom and strength to you in 2010. We are all going to need it.
-- Jeff
July 2009, Mid Year Update I wish I had a better report to make for you, but here goes. At mid year, it seems the residential real estate market is basically steady volume at flat prices, relative to a year ago. Foreclosure and repossession activity has increased compared to the past few years, as noted in the popular press. This helps increase unit sales, but depresses pricing power.
Some commercial leasing activity is taking place for those needing to expand their business operations. Land and commercial building sales are just not happening, even though new commercial properties continue to accrue on the market with hopes that buyers will soon return to pick them up. The spread between what buyers are willing to pay and what sellers are willing to take is just too large. Bankers talk a good game but seem to want to keep their loans to themselves, making it difficult for those who have the desire but not the capacity to make real estate purchases.
The general public psyche seems to be expressing itself in the stock market, and that in turn mirrors itself in the real estate market. While in past recessionary economies the stock market and real estate market would be expected to go in opposing directions, they are now running in tandem, and have been so for the recent past.
This fall and winter may well be a 'make or break' season for a lot of folks. I hope that you are one of the 'makers!' Keep your powder dry; we still have more to go through before clear sailing can be declared. May God Bless you and provide for you for the balance of 2009.
-- Jeff
December 2008
Well, it's time for my 2nd annual Christmas letter and outlook for 2009. After reviewing last year's letter, I concluded that my hopefulness for a market up-trend for 2008 sounded a bit rosy compared to the past year's actual events.
Rather than eat crow over the 2008 letter, however, I think I will just throw it out and start over with new prognostications for 2009.
For over 2 years I have had a running bet with another agent, here at Lindsey, as to when the local real estate bottom (in price and number of sales) would occur. He maintained that November of 2008 would be the bottom, and I projected that March of 2009 would be the market's lowest point. I guess I still have to stick with that date.
There's been a flight to safety into paper (money) that is going to turn sour as people realize that these "dollars" will go back out of favor, leaving real estate as the most obvious choice to get "dollars" exchanged for tangible goods. Lord knows we are being flooded with bailouts and handouts from the dollar printers in Washington. That "created" money is going to find a "home" eventually in tangible goods. Dollar down = tangibles up.
I believe that soon real property in the hand will be thought of much more highly than paper promises of the future. I'm hoping the bottom to be here in March and that a slow upward progression in the market will begin soon thereafter.
Continue to look up. Things don't stay bad for very long, local history has proven this as our area has traditionally been one of growth in both industry and population. We live in a blessed part of the country, isolated from many disruptions that the national economy/government throws our way.
Hang in there. Opportunities will arise. Be clear of mind and stout in heart for the challenges of the days ahead. May the Good Lord keep and prosper you in 2009.
-- Jeff
December 2007
I wanted to share my thoughts regarding the current real estate situation, as I am sure that you have concerns regarding your own holdings and hopeful sales opportunities.
I expect the local real estate market to continue on its slow trend with an up-tick at the end of this year. National forecasters, on a nationwide basis, project a downward trend for 2-3 years, but I don't expect NWA to follow that trend that severly or for that long a period of time.
Our area continues to be looked at in a favorable light by those in the country who are looking for a great place to live. NWA has been evaluated during the last few years by entities such as CNN, Forbes, Sperling's Best Places, MSN, Kiplinger's Finance Magazine, Business Development outlook, The Milken Institute, AARP, Inc. Magazine, and the Washington Post (sited on moving.about.com and Fayetteville.com) and given high rankings in things such as best place to live to reinvent yourself, clean air, top college towns, best place to do business, and best place to live and work.
Low cost of living, affordable housing, and steady job growth were sited among the reasons for people to move to our area. Couple that with the natural beauty of the Ozarks, temperate climate, and the fact that there is a continued influx of Fortune 500 companies to this area, and it's plain to see that there's every indication that our population will continue to increase with those who are pursuing the Great American Dream.
NWA exemplifies the entrepreneur's gold mine, even with the current slow down in real estate sales. The word is out! With recent national news media recognition, NWA is fast becoming known as one of the best places in this country to live and work, and to make your business dreams come true. Soon both residential and commercial real estate will again reflect this phenomenon. I hope that 2008 will bring you success in all that you set your hand to do.
Blessings to you in this new year. Be encouraged and keep the faith.
-- Jeff
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