Recession and Northwest Arkansas - Part 3

Hey everybody. My name is Phillip Shepard. I’m a local real estate agent located right here in Northwest Arkansas. Today, we’re talking about part three of our Northwest Arkansas and recession trilogy, which looks at the housing side of the potential recession.

In the event of a financial recession, the limited buying power, the number of people moving in, and the rate at which they are coming are all factors that would alter the dynamic between buyers and sellers in the housing market in Northwest Arkansas and dictate the local economic climate.

This article will jump right into housing, recession, economics, and all the fun things that would go down in Northwest Arkansas. So let’s talk about those.

Buying Power Is Limited

The first thing we’re talking about is the elephant in the room. Buying power is more limited now than it was about seven or eight months ago. Maybe less than that. For instance, if you wanted to afford a $350,000 house, you might be cut down to $300,000 now.

But one thing to note is that even though interest rates are currently sitting around the 5% to 6% mark, those figures are still historically low compared to what housing interest rates have been in the past.

When you compare 2% to 6%, it seems crazy. But realistically, it’s still very low. The buying power has still decreased significantly.

If you are looking to buy a home in the next couple of months or so, your buying power is limited. That’s not to say that I would necessarily wait to buy a home.

If you are looking to buy a home in the next couple of months, say, if you are moving to Northwest Arkansas and leaving a different state or city to move here, I would still highly recommend doing it.

I also recommend the whole process of buying a home here, which is to get a two to three-month Airbnb or VRBO kind of thing, and then just look around for the best location where you want to end up housing-wise.

Then you might have a 30-day closing. It’s good to get wiggle room when you do come down. So, if you do come down here, definitely check that out.

5 Brand New Businesses In Northwest Arkansas – A must-read!

Video:

More and More People Are Moving Here

Secondly — and this is where we’re going to start getting into more of the specific things about Northwest Arkansas — is that the speed at which people are moving here is not slowing down.

I have noticed that people are still moving here at an insane amount and at the same rate, which means that people are coming to the area as fast as they were a year ago. In fact, it’s probably actually sped up quite a bit as well.

That little difference means that people might wait three to four months before they actually pick an area they want to be in. They’re taking their time a little bit more than they have in the past.

So, this is one thing to consider if you’re moving here or considering selling your home. Know that the growth rate of Northwest Arkansas has not decreased at all.

When you do get here, you might want to wait a little bit longer just because you have a little more time. People are waiting three to four months before they really start making that commitment to where they want to be in the area.

Now, I do admit that usually, about two months is the point where people really do hunker down and say, okay, I want this spot, this spot, or this spot. They then purchase a home and give themselves 30 days — sometimes 45 days — to close.

So that hasn’t changed too drastically. It was a little faster, maybe about six months ago, but the fact is, people are still moving here at a fast rate. They might just be staying around here a little longer in an Airbnb to find the perfect settling area or school system they’re looking for.

Want to work in peace and comfort? Here are the Best Co-Working Spaces Bentonville, Fayetteville, Rogers, and Bella Vista!

Also, I have a 3-day itinerary that can help you decide what activities to do if you’re overwhelmed by everything Northwest Arkansas has to offer.

It doesn’t matter if you’re a foodie, a sports person, a sightseer, or want to spend quality time with your kids; I have something for you. Check out the link below to learn more:

https://www.allthingsnwa.com/3-day-itinerary-northwest-arkansas

Interesting Homes Are Sitting Longer

This is where it gets very specifically Northwest Arkansas when it comes to recession. The interesting homes have hung around on the market a little longer than normal, and normal is a very vague term.

The last three years of the market were a little different than before. If you have an interesting home, let’s say, for instance, you have a three bedroom, two bath, and a quiet cul-de-sac in any of the neighborhoods with a great school district, it’s not going to be a problem at all. You’re going to sell just fine.

There are interesting homes that should be a very niche group — for instance, those with a basement or bedrooms upstairs and nothing downstairs.

What has been happening is that people moving here with a more limited budget than before have been hanging around a little longer.

They’re not as quick to move on those homes because they’d rather sometimes wait an extra 30 days to find that perfect home with three bedrooms, two baths, split floor plan or four bedrooms, two baths.

Whatever the case, they’re willing to wait a little longer to find that actual home versus just jumping on those interesting homes.

If you’re coming down here, be aware that these interesting homes create an opportunity for buyers. If you want to find those interesting homes, the sellers are sometimes in a more interesting position to sell because they’ve been on the market for 14 days, which seems like a long time.

But if they’ve been on the market for 14 days, as a buyer coming down here, you might have an opportunity to get a “better deal” than you would have six months ago just because those interesting homes are sitting on the market for a little longer than usual.

This goes into my next point, which is a message to buyers.

If you want to learn more about Northwest Arkansas architecture, check out this article, Architecture in Northwest Arkansas – 7 Award-Winning Designs.

Message for Buyers

If you’re coming down here, you can find a more interesting home or deal than you might have had six months ago because there will be less competition.

That’s not to say there won’t be offers on these interesting homes. It just might mean that they’re in a more interesting position to sell if it has been on the market for 14 days.

That doesn’t mean that you might not go against the competition when it comes to offers. It just might mean that you might go against less competition.

Just because interesting homes have not been on the market for 14 days doesn’t mean that the sellers are willing to sell them at that price. It just means that they realize that it hasn’t sold in the first three to five days, and there might be some changes they need to make to the home.

They might be willing to sit for a little longer, so you have to play that game from a buyer’s and seller’s perspectives to figure out how you want to handle that.

Message for Sellers

Now let’s look at the seller’s side for a minute.

One thing that has been creeping up more and more is that you might not be able to push your price as far as you would have in the past, and that’s just because the buying power isn’t there anymore.

On the other hand, there are as many people moving here, so there’s this weird dynamic happening because you might not be able to push the square foot per house, or whatever the case is, as far as you did in the past two years for instance, or one year specifically.

But you may have a very unique home — not interesting, but unique. Let’s say, for instance, a three bedroom, two bath in Rogers with a really nice outbuilding and a pool. Whatever the case is, you’ll be able to push that square footage a little with those very fun additions to the home.

On the other hand, if you have a three bedroom, two bathroom in Rogers that has none of those things, you might not be able to push it as far unless you have some really interesting things you’ve done to the home.

But on top of that, while there are as many people moving here, instead of having ten offers on the table, you might only have five at the moment, or maybe seven.

If you do have very fascinating fun features about your home, then you can push your square footage a little higher than you typically would. But if you just have a regular three bedroom, two bath in Rogers, you might have trouble pushing that next level when it comes to square footage.

It really is because of the tightening of the budgets of people moving here. They might not have the same budget as before, so it’s a give-and-take thing at the moment.

Conclusion

A potential recession would create an interesting situation in Northwest Arkansas in terms of housing with the shifting dynamics between buyers and sellers. The limited buying power and the sheer number of people continuously moving down here all shape this current climate.

Again, if you are thinking about moving down to Northwest Arkansas, download my three-day itinerary.

Maybe you’re an adventurer. Maybe you’re a sports person. Maybe you’re into art and culture.

Maybe you’re a foodie. There’s a three-day itinerary for you. So go ahead and download.

Recession and Northwest Arkansas – Part 3