View from Faulkner County
March 11-17, 2024
By Spencer Hawks
As the sun breaks through my Conway office window this early March morning, I gaze upon the white board with listings and contracts on my office wall in front of me. The board is fuller than it has been for a while, and for early March this is extremely encouraging. Last year real estate professionals saw one of the most challenging years they had seen in a while, and many of us felt the train we had been on with a greased track had hit a brick wall.
Be it optimism, anticipation, or growing accustomed to a little higher rate, buyers seem to be shedding the reservations of 2023. Having gone through a slower period, while still low, inventory has picked up some. Sellers are more willing to negotiate, and prices have stabilized.
Newer agents in my office accustomed to putting in multiple offers before finding a home for a client, and offering over asking, are now learning about contingent offers and negotiating through an Inspection Addendum.
The market is still healthy, and exposure isn’t long considering historical data. Entry-level homes are moving relatively quickly despite the costs some markets are asking.
Glancing back upon the white board homes anywhere from $300,000 through $450,000 seem to be moving, which is beyond what most Central Arkansas markets would call entry-level. At our Faulkner County Awards Banquet the other night a friend and agent told me that he did more business in the first couple months of this year than he did in all 2023. Like Punxsutawney Phil, real estate professionals have come out of the Winter loll and found the shadow of 2023 is no longer looming over them.
Another difference is that financing options are more diverse than they have been in the last couple of years. During the peak, deals were often conventional loans or marked “cash” on the contract. Escalation Clauses and appraisal gaps were used to fill in the hole between demand, valuation, and desire. Higher interest rates have returned us to a reality that frankly is healthier than where we were at.
We have the majority of the year to go still. While the primaries in Arkansas came and went mostly uneventfully, some of the lowest turnout in nearly a decade, we shall see how election politics end up shaping the year in this industry. Anticipated rate changes, rate changes, and consumer optimism or the lack thereof may have some bearing on the market.
However, America is still short 3.2 million homes according to an Axios report from December, 2023 last year. This is real demand, and Arkansas is a growing state putting a target right at the heart of our local real estate markets.
Rep. Aaron Pilkington (Clarksville) called a few days ago to discuss a few matters pertaining to the state, and one that he brought up was affordability for first-time homebuyers. I agreed that becoming a first time buyer is not as easy as it has been in the past, and suggested a few ideas that the National Association of REALTORS have espoused and promoted for years. We both agree that homeownership is an important part of functional economies and communities, and I thanked him for his concern and willingness to look into the issue. A week or so prior to this conversation a group of professionals met with an organization that’s engaging with the Conway Area Chamber of Commerce about what could be done to promote and encourage affordable housing options. As a perpetual optimist, I’m encouraged that we have leadership all over our state looking into making homeownership affordable and diverse.
Finally, fueling the fire is the economic growth created by businesses who continue to come into the state because of an attractive environment for industry and commerce. In spite of aforementioned challenges, Arkansas is an affordable state in which to reside. We offer a diverse workforce and have many natural resources that are attractive to growing industries.
Our tax climate is competitive regionally and is consistently a focus of our governing bodies.
Driving around Dave Ward or Prince Street in Conway the building of commercial and industrial spaces is impossible to ignore. This is not isolated to Conway either! Central Arkansas and Northwest Arkansas are moving forward at amazing rates. Growing up around real estate and development, the growth is encouraging, and I see the opportunities are expanding.
I don’t have a crystal ball to foretell the future, but the indicators are good for continued growth in real estate in Arkansas. The shadowy brick wall of 2023 cannot withstand the splendor of the breaking sun of 2024. We have had a strong first couple months in the industry, and without unknown interruptions, I’m optimistic about a continued healthy year in the business.
