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Residential resurgence.

Residential Resurgence Local Realtors Are Smiling With An Upswing In Home Sales, But Will This Trend Continue?

Doug and Amy Whitley are all ears as the closing agent at Pulaski County Title walks them through an assembly line of paperwork. HUD-1 Settlement Statement, Truth-In-Lending Form, Promissory Note, Nortgage, Survey, Compliance Agreement, Payment Page and Termite Clearance Letter -Dianne Donaldson goes through the documents one by one as the Whitleys autograph each in succession. Their real estate agent, Carol Moriarty, is seated nearby watching over the proceeding.

The quartet is huddled around the desk until the final signature when they lean back in their chairs and exchange smiles. Congratulations are in order for Little Rock's newest homeowners.

The Whitleys don't really consider themselves trendsetters, but with the purchase of their new house in west Little Rock's Hickory Ridge Addition, the couple became unwitting participants in a resurgence of residential real estate sales activity.

Booming Optimism

A combination of low interest rates, and unseasonably warm weather has helped get the new year off and running for local Realtors, and the mood is upbeat for 1990 to produce the best results since perhaps 1986.

An estimated 5,000 single-family homes changed hands in Pulaski and Saline counties that year with an average closing price of $70,600, according to the Central Arkansas Regional Multiple Listing Service. CARMLS data reflect Realtor sales only, which might exclude as much as 20 percent of all residential sales - deals handled by non-Realtors.

For 1989, CARMLS tabulated sales were 3,800 - the lowest level since 1982 when home sales in the two countries numbered only 2,689. Eight years ago, some Realtors celebrated the beginning of 1983 with a grim yet humorous tribute to its predecessor: T-shirts bearing the message "I survived 1982."

A similar gesture isn't planned to commemorate 1989, although overall sales were less than stellar and the attrition rate among real estate agents was uncomfortably high. Activity in the local housing market began picking up at year's end, which has carried over into 1990, and some Realtors are having a hard time containing their excitement about what the coming months might bring.

"With these sales?" laughs Bev Kennedy, residential sales manager at Rector Phillips Morse. "I do feel it's an uptrend. It's marvelous.

"We had a record-breaking quarter (November-January) in terms of income from closed sales. It was the best performance we've ever had during those three months in the 35-year history of the company. The pace for new offers is wonderful."

January Harvest

January is historically a good month for real estate activity, what with year-end corporate transfers and buyers/sellers turning their attention to the housing market after being distracted by the holiday season. Also, with the approach of income tax season, it's a time when people traditionally evaluate their financial position and decide whether they can afford to enter the market for the first time or move up to a higher-priced home.

Roy D. Rainey Jr., president of Rainey Peacock Penfield Realtors, reports that business in January was so heavy that the overflow is threatening to affect February sales - a problem he and other Realtors enjoy trying to cope with.

"I've never seen anything like it, and I'm worried about this month's sales because we're so busy trying to get all of these other deals done," smiles Rainey. He adds that January sales at the firm's west Little Rock office alone totaled $4.5-$4.6 million. That one-month performance is equivalent to the combined sales for October-December 1989.

"We have the biggest backlog of closings now, and that's great because I've got the biggest backlog of bills," Rainey quips. "I have seen more high-dollar buyers than I have seen in some time."

As might be expected, the hottest area of activity continues to be west Little Rock where $100,000-plus homes seem as plentiful as pine trees. In 1989, 547 houses (14.45 percent of all CARML sales) were sold in the area west of I-430, referred to as Z-7 or Zone 7. Rounding out the top five areas of residential sales during 1989, as reported by CARMLS, are:

% West of University, north of I-630 and east of I-430 where 301 homes were sold (7.95 percent).

% Jacksonville, 289 homes (7.63 percent).

% North Little Rock, 253 (6.68 percent).

% Sherwood, 247 (6.52 percent).

While single-family home sales fell during 1989, the average sales price reported by CARMLS remained strong at $73,700. On average, sellers received 94.33 percent of the original listing price for their homes last year.

Market Momentum

Georgia Sells, VP at McKay & Co., has observed increased activity in the market as well. She tempers that good news by pointing out that the homes that are now moving have spent about 180 days on the market.

"We have really seen an upturn," reports Sells. "The marketing time is longer because of the oversupply of houses, but at the same time I see more buyers. Unfortunately, I see more people who want to buy a house but can't sell their existing home.

"We feel that six months on the market is the average marketing time."

Uncertainty over the ramifications of the court-ordered desegregation of Little Rock's public schools has been cited as one intangible that has helped create a bottleneck in the residential market. Public perception appears to be changing though, and whatever impact this issue has had on home sales seems to be waning.

"I'm a public school supporter, but it's taken longer than anyone thought to straighten out the student assignment plans," says Charlotte John, who heads her own namesake real estate firm. "The last few weeks we've seen some momemtum, and I don't know what to attribute that to either. I think the pent up demand is finally starting to burst."

Rusty Armstrong, sales manager at Prudential-McKay Properties, isn't sure what the exact reasons are for a change in the public's attitude toward the residential market too, but he sees the change as a positive one.

"I think we've been in a soft market for probably 1 1/2 years and flat for three years," Armstrong states. "The attitude of the buyer affects our business as much as anything. When people start feeling good about the market, it responds. I tend to think it's on a slow rise, and of course, Realtors are eternal optimists."

More Bangs for the Buck

Even with its ups and downs the central Arkansas market is viewed as stable and reliable. The peaks aren't as high, and the valleys aren't as low compared to other locales around the nation.

Doug and Amy Whitley can testify to that notion from their firsthand experience with the housing market in Poughkeepsie, N.Y. They moved from there to Little Rock as part of a corporate transfer associated with her job at United Parcel Service.

The tough real estate market in Poughkeepsie (with an estimated metro population of 262,000 in 1988 and a 10-plus percent decline in property values) makes Little Rock seem glorious by comparison.

Because the cost of living is lower here, they will also be enjoying more bang for their buck. Their purchase is a parallel move in terms of dollars and cents, but is a step up in terms of how much house they could afford here versus New York.

"We went house hunting during one weekend, and we found this one house (two-story, brick and frame) we really liked," Amy Whitley remarks. "We made an offer on Monday, and it was accepted that same day. In choosing the neighborhood, we were really interested in resale value because we might be transferred again in a few years."

"You can get a lot more for your money here," adds Doug Whitley, whose background is in real estate appraisal. By his estimation, the difference in value between Little Rock and Poughkeepsie is about 2 1/2 times.

Unlike the Whitleys, most of the homebuyers entering the market will be coming from within the Little Rock area and from other parts of Arkansas, and they won't be able to take advantage of such a price gap. Movement from this mainstream segment is there, and Realtors hope the trend continues to play out in the coming months.

PHOTO : In purchasing their new, west Little Rock home, Doug and Amy Whitley become unwitting participants in a upswing of residential real estate activity. Realtors hope that renewed interest in the market will portend healthy sales figures for 1990.

PHOTO : Doug and Amy Whitley (foreground) close on their new home while their real estate agent Carol Moriarty (left) and Dianne Donaldson of Pulaski County Title look on.
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Title Annotation:Little Rock, Arkansas
Author:Waldon, George
Publication:Arkansas Business
Date:Feb 26, 1990
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