Title Firms Finally Catch Their Breath

Just when interest rates finally snapped back high enough for title companies to take a break, the annual fall stretch of maturing subdivisions is prompting more paper pushing.r

Blake Hanby, president and CEO of Waco Title Co. in Springdale, said although an October rate spike slowed 2003’s mortgage refinancing boom, the break in business was short-lived.r

Many interest rates fell to about 4.75 percent on 15-year mortgages by July, 5.5 percent on 30-year notes. In October, they were up to 5.5 percent for 15 years and about 6 percent for 30 years. In late November, there was a dip again at some banks to 5 percent (15-year note) and 5.65 percent (30-year note), but most economists agree rate yo-yoing will likely continue at least through the first quarter.r

“Our orders were probably down 30 percent in October from July,” Hanby said. “But we were doing an astronomical number of orders per month for many months in a row. Even with the rate tick back up, it seems like new construction has picked up again.r

“So the ‘refis’ dropped off, but it seems like we were having another subdivision boom.”r

David Erstine, vice president of Real Estate Market Data Inc. in Springdale, is an expert on the local commercial and residential real estate markets. He said ground is typically broken on new subdivisions in the spring. By late fall, that causes a rush on title services for lots that have become available for production or homes that are ready for purchase.r

“Clabber Creek in west Fayetteville, for instance, has 109 lots and most of that site work was done in the spring and summer,” Erstine said. “Now that homes are starting to be built, there’s been a lot of closings out there.”r

Total title company closings in Benton and Washington counties for October were down 13.6 percent from 5,558 in July to 4,802 in October.r

Benton County totals showed its 14 primary title firms (plus a host of miscellaneous others) closed a combined 3,057 July deals. By October, they were down about 8 percent to 2,813. In Washington County, about the same number of firms had 2,501 closings in July before dropping 20.1 percent to 1,989 in October.r

Brian Irwin, vice president of Heritage Land Title of Arkansas Inc. in Fayetteville, said his firm barely even experienced a downturn. In fact, he said, Heritage’s October and November volumes exceeded what they did a year ago.r

“A normal day in Northwest Arkansas would make [title firms] anywhere else in the country really, really happy,” Irwin said. “When you look at the 10-year projections for this area, regardless of the ‘refi’ market, there’s a lot of continued home purchasing growth still to come.”r

Lynden Polk, the regional manager for Lenders Title Co. in Rogers, said although his firm is still busy, the refinancing slowdown has enabled it to get caught up on back office projects and to call on important customers. He said it’s “still a sellers market because there’s not enough inventory to meet demand,” but there are also quite a few projects in the works that will substantially increase supply and simultaneously provide more title work.r

“There’s also still a lot of people upgrading their homes, and with all the projects on the table we’ll have another huge growth phase in the near future,” Polk saidr