Unrealistic Expectations in a Bull Housing Market Leads to Seller Frustration

I often see homes listed at a price that I will call "Unusual." When the Northwest Arkansas housing market exploded about 18 months ago, we as agents began to see a change in market expectations that one only sees during a boom. Bentonville is my primary market, so I'll use it as a reference.

At the beginning of the boom, prices began to climb gradually and as more downtown activities (restaurants, the museum, pubs, First Friday, etc...) became available that were of interest to the public, more and more folks wanted to be within walking distance of the square. So downtown prices began to rise above the market value of the rest of the city. Every week we saw sellers asking an "unusual" price and then within days it would be sold. An influx of cash buyers or buyers with above average means caused many downtown homes to be sold at two to three times market value. Many of these were listed in "as is, no appraisal" because they were marketing to these specific people who had the means to buy the house no matter the cost, either for remodel or demo for the lot.
The next week, the next door neighbor to the seller above decides they will sell too but they raise the price above what their neighbor got just to check the waters, so to speak. And their house sold also. And so on.
This trend continued for about a year with downtown prices finally plateauing at about 1 1/2 to 2 times market value.

Here's where the frustration comes in: Now that the market is at a plateau position, anything above that point is a unrealistic expectation. So now when I see one of these properties, I think of the price as "unusual." And in the current market, if you are incorrectly overpriced, you are looking for an "unusual" buyer. Because the standard buyer knows what to expect to pay. This holds true in the majority of cases; of course, there are some special circumstances that indeed do sell at unusual pricing.

So, what do we as agents try to do for you in order to not cause unrealistic expectations? We know the market. Do you know how many times I have heard, "My house is worth '$ X' because the guy down the street has his listed for that. I know it's true cause I saw it on Zillow (or whatever)" Listing isn't selling my friends. You can ask anything for your property, from a penny to a billion dollars. This figure has no bearing on real life unless you do your homework or you have a relationship with a trusted agent who can do that work for you.

The real estate agent who is looking out for your best interest will be able to tell you what your property is worth within a few percentage points by examining the trends in the listings but especially in the selling prices over the last 6 months. Recent history is nearly always a predictor of current conditions. That's why real estate appraisers use sold comparisons. They are getting paid to tell the bank what the market conditions are for any given area so that the bank knows how much they can lend the prospective buyer. Real Estate agents do the same thing with the knowledge we gain from market study and trends. Appraisers are of course licensed to appraise and real estate agents aren't, so we are acting within the best of our ability to give a seller or a buyer the best pricing information we can give.

So how does pricing affect you, as a seller, overall? Let's take a look:

For 2017 in ALL of Northwest Arkansas, there were 17 homes sold over a million dollars. (not including large acreages).
Currently there are 58 listed. That divides out to 3.4 YEARS worth of inventory

For the same time period and place, there were 65 homes sold over $750,000. There are currently 123 active listings in that range, or nearly 2 YEARS worth of inventory.

Want to know about Bentonville?

Last year there were 11 homes sold over 750,000 and there are currently 26 on the market, for a 2 year inventory.

Last year there were 64 homes sold between 500,000 and 750,000. There are currently 51 active, or about a year's worth.

Last year there were, between 300,000 and 500,000, 366 homes sold and there are 200 active, or about 6 months inventory.

Last year there, between 100,000 and 300,000, 953 sold and there are 170 on the market, or TWO MONTHS INVENTORY!
That's almost 3 homes sold PER DAY!

So there you are. Homes between 100 and 300k are the most desirable and fastest selling, and for obvious reasons. There are about 35 to 40 people PER DAY moving into the NW Arkansas Metro area. And most people can afford or are interested in a more modest home, under $300,000. There are others in the higher brackets as shown above, but remember - for every time a seller lists above market, there will be potential buyers who pass because of the pricing.

I know this has been long-winded, but I hope it has also been helpful to those buyers and sellers who want to know more about market trends and pricing.

If I can help you further, please email, call me at 479-903-0328, message me on Facebook, whatever is easiest for you. I'm just here to help you make the right decision, one of the largest you'll make in your life, for you and your family.

Also as a favor to me, if you like this article and more like it, please like my Bentonville Real Estate - Larry Horton page!
Thanks!

Be Safe!

Let's Take a Look at the Market

I like to provide a few statistics every now and then to let buyers and sellers know a more exact picture of the market than one can find on Realtor.com or Zillow.

Currently there are 490 homes on the market with Bentonville addresses. There have been 742 sold in the last six months, or 123, roughly, per month, so we have an inventory of almost exactly 4 months. That's a pretty low inventory of homes. And remember, winter is usually the slow season for real estate, considering the holidays and the weather. But we are having beautiful weather for late November with highs in the high 60's, so people are still out looking for homes. And the folks that are moving here don't come at any specific time, they come ALL the time. We, as a community, are fortunate. 

Centerton has 101 homes on the market and has sold or pending listings at 287 over the last six months. That's 48 sales a month in a market with many fewer homes than Bentonville. So there is about a 2 1/2 month supply of Centerton homes available currently on the market. Again, low inventory. 

Finally, Rogers has 403 homes on the market and has 745 sold in the last six months, nearly identical to Bentonville. 

Low inventory means higher sold prices for sellers because there are fewer homes to choose from. In the long term, there are several subdivisions in development that will add homes in the near future. My thought is that this will offer more choices, but the number of people moving in to our area will keep pace with the number of homes. 

If you are looking to buy or sell and want more information, please give me a call at 479-903-0328. It's a crazy market right now and although there are a lot of articles on the 'net about homes and home buying, it's good to have someone on your side doing the work. 

Prices May Have Leveled Off...But Don't Think It's Over

I watch the prices of Northwest Arkansas homes on a minute by minute basis. It's true, although maybe it seems boring, but if I'm not out working with a client, I watch the new listings and reduced prices on my multi-list every minute of daylight, often into the night. I'm trying to not only catch good listings, but to try and ferret out the over-priced, the under-priced, great locations, etc... It's what you expect out of an agent. They watch it so you don't have to. And don't get me wrong, there are great online apps that give you lots of info. But when you have years and years of experience in an area, with the neighborhoods and the people, with the great locations vs the not so great - you're getting vastly more than you can get by looking at an app. 

The crazy prices that were happening in Bentonville have leveled off, finally. Everyone in the business knew it wouldn't last forever. We were, for a while, in a position that allowed one to ask nearly anything in the downtown area and expect to receive an offer. Those days, except for rare circumstances, are over. But prices aren't dropping like a lead balloon. Things are still good and prices are up; supply is limited. Bentonville today has 491 current listings. Many of those are new construction in the southwest part of the city. 992 listings have sold or gone pending in the last 180 days, which is about 165 homes sold a month. 

Looks like a good time to get in to the market, there are deals to be had. Please call me if you have questions - answers are free! 479-903-0328

Bentonville Prices Leveling Off a Bit...

Looks like the never ending upward spiral of pricing in Bentonville, especially downtown, is leveling off a bit. There are currently 467 Bentonville listings with 268 under contract and 615 sold in the last six months. 350 of those sold have been in the last 90 days. That's a robust market folks, any way you slice it. The average list price currently in Bentonville is a whopping $145 per sqft. However, the average sold price in the last six months is only $120 per sqft. This tells us that the average home is priced quite a bit above what they are actually selling for. Some of this is skewed by the higher than average downtown home prices. The average list price of homes that would be considered to be close to downtown is $230 per sqft so you can see how that would make a different in overall home prices. Is it all too confusing? If you are looking for some direction in how to proceed in buying a home or selling your existing home, please give me a call or drop by the office. Together we can figure out the best course of action. 479-903-0328 

Reduced Price! New Listing 903 NW A - Huge lot with a Pool

New to the market, 903 NW A street in Bentonville, just a short walk to the Crystal Bridges trail system and overlook. 6/10th of an acre, 2442 sqft with two separate apartments with kitchenettes, hardwood floors, modern kitchen, two living areas, pool and lots of backyard. Convenient location to downtown area, 9 blocks from the square. All for $360,000. Please call me today for a private showing. 

 

Sure, You Can Sell It Yourself..But Should You?

I'm a pretty honest and blunt person and sometimes that makes me a bad businessman. For example, I run into people occasionally who say, "I'm going to sell my house myself and skip the fees." And a lot of the time I respond by saying that it's actually not a bad idea in certain markets. If the traffic is high enough, you should be able to sell your home without a problem. So there, I've said it in print. yes, you can sell your house on your own. But it's not so simple.

You have to first determine price, and in a hot market that can lead to your losing enough money that you could have paid an expert to keep you from doing just that. Sure, there's a lot of information on the inter-web. But it's not very precise. One leading real estate website tries to place a value on each property but this can be misleading at best and downright incorrect at worst. Your local real estate professional has access to hundred of different records that help you sell your home, including the multi-list system, county records, city planning, and a deep familiarity (we hope) with the community and how the market is in any given spot. This alone can save you thousands of dollars.

Next you have all of the legal documents that go toward a less risky transaction. Property inspection, fair housing, lead based paint, termite - did you think of all of these? One wouldn't want to sell a home only to have legal problems down the road when something turns up that you didn't think of.

Lastly, whenever you enlist the help of a professional, you will hopefully get someone who is schooled in the art of negotiation. Rarely is it that you price your home and sell it for what you have priced it at, unless you have vastly underpriced it. (see above) You want someone who can negotiate FOR you, someone who is watching out for your best interest. You want the most for your investment and the professional real estate agent can do all of that and more.

If you are thinking of buying or selling, why not call an expert? I have 30 years of experience and I can help you make your best decision. Call me today at 479-903-0328 and thank you.

Listing and Sales Numbers

When someone talks about the market in terms of a "Seller's Market" or a "Buyer's Market" you may wonder what it's all about. Here's the breakdown for Bentonville, and it's pretty comparable for the NWARK Metro area as a whole.

There are currently 393 listings for Bentonville residential properties. There have been 110 similarly listed properties sold in the last 30 days. This means that there is a roughly 4 months supply of homes on the market - meaning if no one listed any more homes, the ones currently on the market would last almost 4 months before we ran out of homes to sell. This is all based on selling price and the particulars of the home. Some will never sell at their current price for one reason or another.

A further breakdown shows more details in the following price ranges:

0-100k homes - 0 are listed, 3 have sold - Hottest market

101-200k homes - 36 are listed, 24 have sold - Next best - 6 weeks supply of homes

201-300k homes - 110 are listed, 34 have sold - roughly 3 months supply

301-400k homes - 123 are listed, 28 have sold - 5 months supply

401-500k homes - 55 are listed, 11 have sold - 5 months supply

over 500k homes - 69 are listed, 10 have sold 6 months supply

This provides you with a lot of information if you are selling or considering selling your home, and also if you are buying. It is plain to see that the market for homes under 200k is hot. Few that have been listed have not sold. And that's not to say that the more expensive homes aren't hot, they just have fewer buyers and take longer to sell.

If you are looking for your next home or considering selling, these numbers are the most important thing in determining that your price is low or high in compared to the market, unless you are willing to wait several months.

Please call me if I can help you with your home purchase or sales. It's a complicated market and you don't need to go it alone!

Buying or Selling a Home Can Be Confusing...

Buying your new home or selling your old home are both, by nature, somewhat confusing. Most people only make these types of decisions a very few times in an entire lifetime.

I find that the question I get most often is - How do I start?

If you are buying a home, it does no good to look at listings and find exactly what you are looking for, only to find that you are unable to get a loan for the amount needed. And when selling there are a lot of tips of the trade that you can't get just by reading about it online.

I have a step by step plan for those who are considering buying or selling - a way in which you can be sure you are making the right choices in either situation. No sense in being nervous! We can figure it out together.

Please give me a call or drop me an email. I can meet with you and go over every thing from start to finish and make sure that you don't miss any opportunities along the way.

And of course, there is no cost for information. Which is another source of confusion in that real estate agents don't (usually) charge for information. We make our commissions off of the selling price of the home.

We can make it through this together! Let me make it easier on you!

Call me - 479-903-0328 or email bentonville123@hotmail.com

Office Space For Lease - Convenient and Spacious Minutes to Downtown

I have a really nice office space for lease. It's located at 3110 Ford Springs Road in Bentonville. The location is ideal for an out of the mainstream office that is still just a few minutes either to the Bentonville square or I49. We have 5650 sqft listed at $5 per sqft lease. It features 24 separate offices and a high level security system. If this fits your needs please call me. 

 

SOLD! #10 Stratfield Lane in Bella Vista - $230,000 and Two Lots

I have a new listing at #10 Stratfield Lane in Bella Vista. $230,000 featuring a 2570 sqft 4 BR 3 Bath home on two lots for more privacy. Close in too, on the east side near Cooper Elementary and 71 North. Take Mercy Way to Dartmoor, right on Dartmoor past the school, left at the Tee and left on Manchester and then right on Stratfield. Take a look today and give me a call to see the inside.

Beautiful from the front., nice quiet Cul-D-Sac

Beautiful from the front., nice quiet Cul-D-Sac