Fayetteville, Arkansas is a medium-sized city nestled in the Ozarks. Home of the University of Arkansas, it offers four seasons with mild winters, a culturally and intellectually diverse population, reasonable cost of living, and a 2.5% unemployment rate, says local Realtor Judy Luna.

"In September, the market slowed down somewhat, despite extremely attractive interest rates," says Luna. "There is a shortage of homes for sale at almost all price ranges. On the low end (under $100,000), still absent new construction, there continues to be a decided dearth of homes--especially new homes--and a strong seller's market. Buyers must move quickly if they find a home they really like, and multiple offers are becoming more common."

She explains, "In the last year, according to the Multiple Listing Service database, 219 homes between $75,000 and $100,000 were sold, an average of 18 homes per month. Now there are only 24 homes on the market in this price range, all resales except for one new home. There is one new neighborhood under construction, but in the early development stages. There probably won't be houses for sale for at least six months or more here. In addition, last year about one-third of the homes in this price range were new homes or homes under five years old. Buyers must still either purchase an older home or be ready (pre-qualified or pre-approved by a lender) to move quickly, to make an offer on newer homes which might come on the market."

Luna adds, "Between $100,000 and $150,000, these trends also exist. Currently there is only a 2.3 month supply of homes of all ages from new to historical homes, but even here the "good" ones go fast. In absolute numbers, 218 homes were sold in this price range in the last year, an average of 18 per month. Now there are 43 houses on the market, of which only three are new homes, and two of those are one-bedroom condos. Only seven of the 43 are less than 5 years old, and sixteen of those 43 are rural with at least a 1/2-acre lot. The current situation is somewhat of a boon for people trying to sell older homes, which had been languishing on the market when there were many new homes competing for buyers.

"The situation improves somewhat above $150,000," she continues. "If you are looking for a newer home in Fayetteville, this price range is the first where there is a significant number of homes on the market (30 new and 13 homes which are under 5 years old). However, of those 30 new homes on the market, 16 are condominiums and 10 are in the Bridgeport Subdivision west of town. The result is that buyers who want a newer home are somewhat limited as to the variety in location. And homes in "hot" areas go fast, so here too, buyers should be pre-approved by a lender and ready to move quickly when they find something they like. Between $200,000 and $300,000 there is a better supply, but, again, not much variety of location. The reason is that a large number of new homes under construction in the new Stonewood Subdivision (22 homes) and in Silverthorne (18 homes) on the west side of town continue for sale. Right now in this price range, there is a just under a year's supply with 125 homes on the market, of which 57 are new homes and 16 are between 0-5 years old. In the $300,000-$400,000 price range there is a 10-month supply, mostly of new and newer homes, and on homes over $400,000 there is about a 14-month supply. However, there isn't as much to choose from as the above numbers might imply. In terms of absolute numbers there are only 38 homes on the market between $300,000 and $400,000 (15 new and another 10 of them under 5 years old) and 24 homes over $400,000, of which only three are new homes.

"A few spec homes in some of the new gated communities being developed are beginning to appear on the market in the price range of approximately $130 per square foot," says Luna. "Of course, it is also possible to purchase a multi-acre estate lot ready for building a custom home, and there are some "good deals" for those who might be willing to purchase a custom home built between five and 20 years ago. Some of these have acreage, and such amenities as tennis courts and horse barns. A classic home, which has been totally rennovated, in the heart of Fayetteville's historic district is available for only $1,495,000."

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Published: October 1, 2002

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