Price, Location Priority On Upscale Inventory

Just 10 years ago, upscale neighborhoods started going up at a rapid pace in Northwest Arkansas. Subdivisions such as Clear Creek Estates in Fayetteville and Shadow Valley in Rogers soon became the pinnacle of home ownership. Now many of those homes that have for sale signs out front are at reduced prices.

Homeowners that traded up in the last decade may now be looking to reduce their attachments to pricey status symbols.

Mary Bassett, owner and executive broker of Bassett Mix & Associates Inc., said she’s seen some evidence that people are wanting to downsize to smaller footprints.

“They’re getting closer to retirement age and saying ‘I don’t need this 6,000-square foot house,'” she said.

On the other hand, homebuyers looking to upgrade to their dream homes are finding prices are better than ever.

Price Drop
Bassett said interest rates at a 50-year low combined with reduced prices have spurred movement in the upscale market.

While some subdivisions have pretty much held their value, Bassett said there are many subdivisions that have experienced a 5 percent to 10 percent drop. She said the drop in price per square foot is a reaction to the sluggish housing market.

“It’s not that the house isn’t worth it,” she said. “Every one of those houses, in my opinion, is worth exactly what the seller is asking.”

Upscale homes are taking longer to sell. According to the Northwest Arkansas Multiple Listing Service, there are 234 homes listed for sale in Benton and Washington counties in the $500,000 to $900,000 price range. Thirty-nine in that range have sold in the past six months and 14 are pending.

Of those 53 homes, the average stay on the market was 164 days.

Homes priced above $900,000 are sitting on the market even longer. There are 107 homes listed in that category, with only 14 selling in the past year. Twenty-eight of those homes have had price reductions.

Jackson Williams, a realtor with Bassett Mix & Associates, said ideally, a home should only stay on the market for about 90 days to six months.

“If you price your home right, it should sell within a month to 90 days,” he said. “In this market, we’re up to about six months, but still, if you price it right, it’s going to sell.

“It’s all about pricing.”

Quality and Value
Despite the numbers, people are still looking at pricier homes and hoping to upgrade, he said.

“The problem we’re running into now is that in order to move up, people have to sell their old place,” Williams said.

Homes in the $150,000 to $180,000 range are moving. Those are properties being bought by first-time homebuyers, who are getting some help from government programs, he said. Hopefully, that movement will allow those sellers to upgrade.

Bassett said the other reason for the extended stays on the market is that buyers are more conscientious in today’s economy.

“Buyers are more savvy,” she said. “They want to make sure that what they’re buying is a good investment, that it fits the family’s needs and that the location works.

“And more so than they used to, they’re looking at the price point and the value they’re getting for that.”

Bassett remains optimistic about the upscale housing market.

“We’re having a lot more showings,” she said. “We’re very hopeful that the upscale or executive housing will start to turn a little bit and start selling in the second quarter.”

Like buyers and sellers, realtors have also had to adjust to the market.

“We’re going back to the basics,” Bassett said. “We’re working harder, we’re working a little smarter.”

Agents are hosting more open houses and taking advantage of technology to post virtual tours of homes on the Internet, she said.

As far as the buyer’s needs, Bassett said they want to see the quality. They expect high quality and amenities for what they’re paying, she said.

Margie Moldenhauer, an agent with Re/Max Associates agreed that buyers in the high-end price range have high standards, whether the market is slow or not.

“The market is tough right now, but it’s a narrower market anyway,” she said. “There’s just not a lot of buyers in this price range.”

Jeff Collins, an economist with Springdale-based Streetsmart Data, also said there isn’t a lot of activity in the upscale market to begin with and even less now.

“In new subdivisions, we typically see two or three sales per quarter,” he said.

The reason for the high volume of upscale homes on the market is due in part to the transient nature of that demographic of homebuyers and a tendency to not stay in a home long, Collins said.

“There’s a lot of turn in that population,” he said. “A lot of people are moving in and out.”

Collins cited data from the multiple listing service, which shows that homes over $500,000 have declined in price per square foot by 8 percent to 12 percent.

“That reflects the softness in the market,” he said.

Oversupply has also been a factor, Collins said, particularly in the upper-end market, where the demand is smaller.

“There was certainly a time when there was some overbuilding in that part of the market,” he said.

That can be seen in some of the newer subdivisions where homes have sat empty since they were built.

The homes in good subdivisions are faring better, Collins said.

“Those are the subdivisions that moved the most quickly when things were good and they’ve held their value better,” he said.

Some subdivisions were just built in the wrong location and don’t have adequate infrastructure to support the volume of homes.

“Those are the ones that just make you scratch your head,” Collins said.

One thing not affecting the upscale market as much as others is the onslaught of foreclosures that hit in last year and a half.

Collins said the high-end homebuyer was fairly well protected from the series of events that affected other homebuyers.

“If you have the income to afford a house at that level, you’re more capable of weathering the storm than the average Joe,” he said.

Bassett said Northwest Arkansas in general was spared the worst of the real estate bust, in part because the unemployment rates did not dip as low as other parts of the country.

“We have a lot of national recognition,” she said. “We have a lot of Fortune 500 companies here that have added to the employment base.

“We’re not sheltered from everything that has happened nationwide but we sure have some good buffers.”

Top Ten
The most expensive homes in Benton and Washington counties include a $4.45 million home in the Beau Chene subdivision in Rogers, a $4 million home on N. Hunter Road in Rogers and a $3.9 million home in Winslow (see map by clicking here.)

Five of the homes are located in Fayetteville, two are in Rogers and one each in Winslow, Summers and Garfield.

Six of the homes are listed by Lindsey & Associates. Meza Harris, the top agent in Northwest Arkansas by volume, is the listing agent for three of the homes.

Re/Max Associates has one listing in Fayetteville for $3.49 million. Another home in Fayetteville is listed by Crye-Leike for $2.95 million.

Bassett Mix & Associates also has a listing in Fayetteville for $2.8 million.

Combined, the ten homes represent more than 99,000 SF of residential space.

The most expensive home by SF, is at 0 E. Gate Rd. in Winslow, with a listing price of $500 per foot.