Little Rock Realtors Association president, president-elect weigh in on state of local real estate
July 5-11, 2021
By Dwain Hebda
Incoming Little Rock Realtors Association (LRRA) president April Findlay flashes a trademark smile when searching for the right term to describe the manic residential home-buying spree gripping the local market.
“We’ve been jokingly calling this ‘The Hunger Games,’” said Findlay, a real estate agent with The Charlotte John Company and a decorated veteran of the residential game. “It’s good to be a seller right now; prices are moving up because of the lack of inventory. Inspectors are behind; you have to have an inspection within 10 days of a signed contract and your inspector may be 15 days out. Your lender may tell you it’ll be more than a 30-day closing. Everyone is a little jammed up.”
Findlay continued: “You can’t let that frenzy of winning get to you. A lot of people are like me and are competitive; don’t get so excited about winning that you pay more than it’s worth just to win.”
Current LRRA president Margaret Bell Hughes said while frenetic seller’s markets are nothing new, there are elements of the 2021 boom that defy comparison over her 15 years in the residential marketplace.
“For anyone who’s been in the industry pre-2008, they will tell you there are highs and lows,” she said. “I remember thinking in 2017 we were in a bubble, but that was nothing compared to this market.”
“I’ll be the first to tell you, I cannot believe we are still in such a low interest rate which is driving buyers to continue to want to pursue the goal of home ownership. Locally, we are still getting people into homes. They might not get the first one, they’re probably going to have to write a few offers, but we don’t have any homeless clients,” Hughes explained.
All over the country, residential real estate is in hyper gear with prices up nearly 16 percent year over year and inventory at all-time lows in many places. As Peter Lane Taylor wrote for Forbes magazine in April, “Days on market are now measured in hours ... In markets like Nashville, Sacramento, and Boise contractual absurdities like waiving all contingencies are now standard conditions as panicked buyers over-reach to get in on the action before the current boom decelerates.”
The chum that’s churning these waters includes the aforementioned lack of inventory, an issue blended from slower home building and spurred investment purchases. Historically low interest rates, now spanning their third presidential administration, have also fed the flames. And finally, millennials, who up to now have eschewed home ownership for nimbler lifestyles, have reached the age where they want to settle down, representing an enormous pool of buyers entering the market seemingly all at once.
Bell Hughes, with The Property Group of Little Rock, said while the current situation is playing out all over the country, Little Rock is starting to get particular attention as a boom area for the coming years.
“I was recently at a women’s forum and Randi Zuckerburg [Zuckerberg Media, formerly of Facebook] said Little Rock is going to be this hot spot for people moving from larger areas and I agree. We should be prepared for that,” she said.
“If you look at cities like Charlotte and Chattanooga and Birmingham, good houses there sell quickly and did so before COVID-19, so it’s trickling down to us,” c
ontinued Bell Hughes. “The secret’s out. Property values are not going to devalue anytime soon.”
Findlay said what makes this upswing different is that it’s relatively price agnostic, although homes in the $150,000 to $350,000 price range are particularly coveted. And with so many potential buyers offering well over asking, stated prices are more or less a suggestion of where to start the bidding.
“The lower end is the sweet spot; that gets multiple offers over asking price within hours,” she said. “As a listing agent it makes it more difficult because you have to have a cutoff. As an agent, I have to present every single offer to my seller. I can’t just say they won’t take that because it’s low; it may have something that appeals to the seller.
“So, agents are busy, but they’re not getting the house every time and I think that’s important for people to understand. It’s not like it was 6 months ago; you need to come in with the very best offer and realize that chances are, [sellers] are not going to counter you. They don’t have to. They’re going to take another offer.”
The market has also spurred interest in purchasing home lots, Findlay said, more so than in recent years.
“I’ve sold a lot of lots, the reason being the client may not find the house they’re looking for,” she said. “You’re seeing more lots in Hot Springs and Heber Springs, as I think COVID-19 spurred a lot of ‘Let’s get out of town.’ People think they can wait that out. I do feel though that has to turn around at some point.”
The recent brisk market activity is just one element of a particularly complicated chapter in the history of the real estate business, both nationally and locally. While the residential market has been running at breakneck speed, the commercial market continues to limp its way back post-pandemic, with some commercial firms struggling to adjust to work-from-home arrangements by many tenants.
Even as forecasters such as fortunebuilders.com continue to tout the benefits of Little Rock for investment properties, based largely on comparative price of inventory, that segment of the market has shown its own share of challenges, too. Not the least of which, skyrocketing home values and the thorny issue of the federal eviction moratorium that was recently extended through July where many landlords who’ve been left wanting for months of back rent are nonetheless stymied from evicting the tenant and moving on.
“I don’t think any of us can tell the future anymore,” said Bell Hughes when asked specifically about the eviction situation. “I know that as an association, we are trying our best to get out rental assistance because there is a lot of that out there. Getting the information to those people who need it has been hard, but we’re going to push that while we let our lobbyists work for us and fight for landlord rights.”
NAR apology and fair housing
Last fall, the National Association of Realtors issued an open letter acknowledging and apologizing for all past misconduct concerning fair housing practices and past discrimination against minorities. In Arkansas, the influential Arkansas Realtors Association (AR) has 28 independent local realtor boards and associations and serves as the state arm of Washington, D.C.-based NAR, including the Little Rock chapter.
Both Bell Hughes and Findlay said ensuring the ethics of the local real estate industry has been and will continue to be a focus of the association. Individual chapters such as Little Rock, they said, have a responsibility to help ensure those days are a thing of the past.
“Our focus is on educating our members on fair housing,” Bell Hughes said flatly. “You can always learn from your past. Some of these studies are so close to home that it’s easy to draw examples from. It’s important to focus on that and not just during Fair Housing Month. As a leader, I always try to get the most pertinent information to our members.”
“There is no difference between being a good realtor and being a good citizen. We actually hold ourselves to a higher standard than most people do as far as our code of ethics goes,” she said.
In practical terms, any real estate agent is subject to ethics scrutiny by the Arkansas Real Estate Commission for complaints filed by licensed parties. Complaints lodged by private citizens are generally heard by the Arkansas Realtors Association, Bell Hughes said.
Findlay noted such disciplinary channels are less effective if the culture of a given area allows ethical corner-cutting to slide with a wink and a nod. She said her upcoming LRRA presidency would send the message that industry ethics are everyone’s responsibility.
“What I’m talking about is more subtle; there can’t be any steering the clients, like saying, ‘This community would be great for you,’ instead of asking, ‘What do you think about this area?’” Findlay said. “People ask all the time, ‘Is this a “good” neighborhood?’ They can mean a lot of things by that. We have to have the courage to stand firm and communicate to our members that they are there to show and sell a client a house in a neighborhood that fits their needs.”
“Through LRRA’s education on fair housing, agents go through continuing education every year which gives us a good opportunity to touch on these issues. It’s important for everyone to realize they have to represent everyone fairly.
“I also think our people understand that it only takes one bad actor to make everyone in the industry look bad, because it’s in the public’s nature to paint with that broad brush,” added the incoming LRRA president. “So, while we drive the subject of ethics home and we talk about it continuously, the truth is, you don’t want to be an unethical agent here because you will not last. This is a small town; we all have to work together as agents and a bad reputation will follow you around like a cloud.”
PHOTO CAPTION: (Photos by Daily Record staff)
1. Top Little Rock Realtors Association officers April Findlay and Margaret Bell Hughes tout the hot Central Arkansas housing market as new home listings showed signs of a comeback in June as home prices broke a new record for the fifth month in a row at $385,000, according to the National Realtors Association.
2. The current boom in building activity in the U.S. is driving a surge in demand for a range of construction materials – from drywall, concrete and lumber to paint, pipes, and wires.