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Selling Central Arkansas: Arkansas may be the only place that's a buyer's market.

The national housing sector may have been depressed in 1991, but in central Arkansas and most of the state, the residential real estate market continued to make gains.

Despite the drop of interest rates on conventional 30-year, fixed-rate mortgages to their lowest levels in a decade, private residential construction in the United States during 1991 fell 7 percent from 1990.

The average mortgage interest rate of 9.3 percent was down considerably from the 10.1 percent average rate in 1990.

However, the relatively low prices and enticing mortgage rates spurred central Arkansas home buyers to take advantage of the buyer's market that existed in 1991.

"We bucked the tide a little bit," says Bob Balhorn, executive vice president of the Arkansas Realtors Association. "The year was fairly stable, if not a little better than it had been in the last couple of years. But it wasn't a barn-burner year."

The statewide realtors association has 4,700 members. Half of them are active licensees, an increase of approximately 5 percent compared to the same time last year.

Balhorn attributes the state's consistent real estate market to attractive home prices, particularly for retired persons. He also credits a slow but steady stream of industry that has moved into the state.

"A lot of people are discovering Arkansas," he says. "You can buy a house here probably as inexpensively as anywhere in the country. The fact that we had some new industry move in made a difference ... Those people from other states were pleasantly surprised at the price of a home here."

Housing Starts Down

The lower mortgage interest rates in 1991, while helping to offset some of the higher housing costs across the country, were not powerful enough to have a significant effect on the number of housing starts.

Also considered significant were a decrease in consumer confidence, which discouraged homeowners from trading up to more expensive homes, and a problem of affordability for first-time home buyers.

A recent report by the Bureau of the Census of the Department of Commerce indicates that 57 percent of all families and unrelated individuals in the United States cannot afford to buy a median-priced home in the area in which they live.

Economic forecasts for 1992 predict a steady growth in residential construction that is slower than the overall economy.

Mortgage rates are expected to hover around 9 percent, but ownership is expected to decline as house prices continue to increase faster than wages.
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Article Details
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Author:Fleisch, Shelley
Publication:Arkansas Business
Date:Jun 15, 1992
Previous Article:Too much of a good thing?: A $20 million retail project is on the drawing board for West Little Rock.
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