Real estate tide turns: Grand opening for Grand Valley

It’s been a long time coming, but there’s life again at Grand Valley Estates in east Springdale.

Legacy National Bank and builder Jeff Whorton teamed up to make sweet lemonade from a bushel or two of sour spoils left behind from the turbulent real estate storm that blew through the region in recent years.

There are 160 residential lots, 75 acres of raw land and 19 acres zoned light commercial included in Grand Valley LLC. Legacy National Bank was the lead lender to developer Tom Terminella for the project around 2006.

Legacy CEO Don Gibson said the original loan totaled about $10 million, with loan participations sold to Guaranty Bank in Springfield, Mo., and the First National Bank of Green Forest.

Sometime after the market turned downward in 2007, Legacy National ended up with the property in lieu of foreclosure and it sat vacant for the past three years.

Thursday (March 29) Legacy held a grand opening to showcase 12 new homes in the subdivision which is located off Don Tyson Parkway and Butterfield Coach Road in east Springdale.

The homes range from 1,500 to 1,600 square feet and are priced at $149,900. The original subdivision covenant called for larger homes — 2,100 square feet — and a much larger pricetag.

Gibson said the covenant was amended to allow for the smaller footprint, but the homes have all the bells and whistles found in more expensive properties.

“We left the lot sizes the same, which gives these properties much larger yards that many of the newer subdivisions,” Gibson said.

Local real estate appraiser and analyst Tom Reed commends the bank for waiting out the market and building a product that fits what buyers want today.

“This lower price point in conjunction with a great location is certainly going to appeal to a wider pool of prospective buyers than the more expensive homes originally planned,” Reed said.

Legacy has played a waiting game for about three years with respect to this subdivision, according to Patrick Swope, chief operating officer at Legacy. He said the lots had to be reappraised and values written down accordingly. The bank had to set aside larger loss provisions during this process, which kept the institution from retaining profits.

Swope said the lots, if sold individually, would sell today for somewhere between $25,000 and $30,000.

Reed said the original pricetag was likely more than double that.

“The bank also had to wait until there was a demand for new homes in this area and price range,” Reed said.

He said the past couple of years not many new homes were built because demand was tepid. Thankfully 2012 is looking better from both the builder and buyer demand sides of the market, Reed added.

Swope said eight of 12 homes are completed and waiting for offers. The bank will add more homes are these are sold.

In the near future a small park and playground area will be added as an amenity for this newly established neighborhood.

Reed said empty subdivisions with overgrown lots certainly don’t help market prices overall. But as a new neighborhood springs up, a community can be created around it and that will in turn bring more value to the surrounding homes.

“It’s a good story but I think we will have to wait and see how these homes sell before we can really know the full impact on real estate values in the surrounding area,” Reed said.

Gibson and Whorton said they are proud to showcase this new neighborhood and look forward to seeing families take ownership.