the ofn
ag-visors
Advice from
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The Real, Real Estate Market By Ken Knies
The real estate market in the Ozarks available. These include quality schools and is on fire. This dynamic market is beeducation options, shopping and entertaincoming prevalent in many areas ment offerings, good transportation options around the country. and the perception of a safe quality of life. We’re all hearing stories of properties sellThese and other amenities con-tribute to ing well above asking prices and getting mulresidential demand. As a result, commercial, tiple back-up offers above the agreed-upon farm and recreational properties become sale price. This is becoming commonplace more desirable as well. throughout the area. I have personally heard Here are some recent residential market stats of or experienced real estate sales contracts in Northwest Arkansas for October 2021 Year being signed the same day. This sometimes over Year: applies not only to homes but land and oth• Active Listings were 881, down 33 percent Ken W. Knies is an er properties as well. Y/Y and 14 percent for the past month (reagricultural and Let’s look at some financial considerations duced supply = higher demand) rural consultant. He that impact this phenomenon: • The median listing price increased from holds a bachelor’s Supply vs Demand: The old saying $294K to 379K (demand, location and price of science and arts holds, “They’re not making any more of it.” inflation) from the University Land is of finite supply. We’re experiencing • The average days on the market decreased of Arkansas and a a classic marketplace where there is pent-up from 36 to 26 days, a 27 percent decrease master’s of business demand, strong cash/financial positions (higher demand) administration from and limited properties for sale. It’s a perfect • Units sold increased from 965 to 1,050, an Webster University storm for a great sellers market. This set of 8 percent bump in sales (again, increasing dein St. Louis, Mo. He scenarios applies to farms, commercial, resimand) formed Ag Strategies, dential and recreational properties. Land is Info provided on-line by Coldwell Banker – HarLLC as a business in demand. ris McHaney Faucette unit focused on Demographics: The Baby Boomer genquality borrowers eration is looking to real estate as a stable, An Upcoming Bubble?: There are sevand lenders. durable asset class to hold. Given the eneral outside factors in play that impact land during rise in the stock and investment marvalues. These include available credit from kets, capital gains can be realized and conbanks and lenders and the Federal Reserve’s verted to real estate. Real estate is a “go-to-option” right now on-going policies that are keeping interest rates at historical for interim and longer-term investors alike. Flipping homes lows. However, we should realize there is a limit to how high or other properties is another subject and outside the scope and how long this pricing trend will continue. Significant and of this article. The word gets out, and people from all over accelerated interest rate increases would immediately affect the country and beyond tend to migrate toward “desirable” demand. Also, consumer confidence is a big driver in one’s areas. Given the propensity to allow more remote and work- desire to either borrow or hold tight regarding a large purfrom-home employment options, individuals and families chase or business expansion project. find moving more attractive than ever. Many will remember the low real estate cycle during 2008 Business and Employment: In addition to three of the and 2009. Hopefully, we’ve learned lessons from that period. largest companies in their respective industries (Wal-Mart, However, history does tend to repeat itself. 1998-2000 and Tyson and JB Hunt), there are many affiliated and supporting 2002-2003 were also down markets in real estate values when businesses in our area. These companies provide thousands looking at the U.S. as a whole. of jobs and contribute to the real estate demand. Many of As we step back and view the bigger picture, let’s enjoy the these supporting companies are smaller businesses are local positive impact of our robust economy while staying cognizant and worthy of local support. They, too, are significant em- of the potential for change. Every seller needs a buyer and vice ployers. versa to maintain the thriving real estate community in this Growing Pains: Rapid increases in populations create area. Careful planning is important when maintaining and imdemand. “Hot” real estate markets are typically tied to at- proving real estate. I’ll always contend our farmers and ranchtractive, accessible locations where multiple are amenities ers are the best stewards of this great asset – the land. DECEMBER 6, 2021
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