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Residential real estate boom continues.

Little Rock Market Remains Robust in Potential Pinnacle Year

PULASKI COUNTY REAL estate watchers see no end in sight to what they say is shaping up to be one of the best years in recent memory for the residential real estate market.

"We're seeing considerably more purchase activity this year than last," says John Moore, president of Moore Mortgage Corp. "We're up probably 10 percent over this time last year."

It's a sentiment echoed by real estate agents, who uniformly report stellar years. If activity continues at its current pace -- and market watchers see no reason why it won't -- they say 1993 will be a pinnacle year.

"It's like somebody turned on the faucet in January. |This year~ started out phenomenal," says Roy Rainey Jr., president of Rainey Realty Inc. and of the Little Rock Realtors Association. "We are up probably 30 to 40 percent over a year ago."

Byron McKimmey, broker of Real Estate Central in North Little Rock, reports just over $22 million in sales to date, compared with $16 million for the same period last year.

Not surprisingly, new housing starts in the five cities that comprise Pulaski County are up, too. By the end of July, building permits had climbed 27 percent to 654 compared with the same period last year, according to figures compiled by the Arkansas Home Builders Association.

Dee Eastham, executive officer of the association, attributes the increase to a pent-up demand for housing.

"And we're still not meeting that demand," she says.

Although lumber costs have risen, the increase has been offset by low interest rates, and housing starts have remained lively.

Another indicator of the strength of home sales is a nearly 70 percent increase in the dollar amount of mortgages filed in Pulaski County. A total of $158.2 million in mortgages, including refinancings, had been filed by the end of June, according to figures compiled by Beach Abstract & Guaranty Co.

Higher average closing costs and fewer days on the market also point to a robust market and one that tilts the scales in the seller's favor.

Most sellers were in the market years ago because an impending move dictated the need to sell a house, Rainey says. Today, sellers are often in the market simply because the atmosphere is so conducive to selling and buying.

"You see more sellers waiting for the right price," he says, "and we see a lot more full-price offers."

Although owners aren't selling themselves short, homes are staying on the market for a shorter period of time. In the second quarter of this year, homes have stayed on the market an average of 18 fewer days, according to figures from the Central Arkansas Regional Multiple Listing Service.

Rainey says some areas remain easier to sell than others. For example, real estate in southwest Little Rock generally moves slower than in west Little Rock.

"You get a good west Little Rock listing and it's priced right, it's sold," Rainey says.

"The key is still pricing competitively," says Nancy Dutton of McKay and Co. "Sellers are able to price their homes competitively and obtain close to that price."

It's no secret that low interest rates are what's driving the market. The question is how long the favorable rates will keep the engine revving.

Moore says he doesn't sense anything that will cause a dramatic increase in interest rates.

And, judging by the rates mortgage lenders were quoting last week, rates are actually edging downward. Interest on a 30-year, fixed-rate mortgage sank to 7 percent, and the 30-year adjustable-rate mortgage is at 3.75 percent.

In mid-July, mortgage rates ticked up slightly after Federal Reserve Board Chairman Alan Greenspan publicly voiced concerns about consumer price increases.

Steve Cochrane of Regional Financial Associates Inc. in West Chester, Pa., an economic consulting firm, says his company is projecting that interest rates will remain at current levels or lower. The company forecasts interest rates at about 7.5 percent well into 1994. Cochrane says that projection is based partly on optimism that the country is getting a handle on the national debt.

Rainey says he senses that buyers have confidence in the economy's future.

"I don't hear a lot of, 'It's great today, it's going to be bad tomorrow,'" he says. "I believe |rates~ are going to stay low for a while because the current administration thinks that's the way to go."
COPYRIGHT 1993 Journal Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Little Rock, Arkansas
Author:Walters, Dixie
Publication:Arkansas Business
Date:Aug 16, 1993
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