NWA Housing Rebound Cheers Homebuilders

by Marty Cook  on Monday, Apr. 14, 2014 12:00 am  

“It took a while for people to get over the hump,” Riggins said. “There was never a demand for Waterford until after the crash. It was dead until about a year and half ago.”

The recovery of the housing market has helped, along with the improvement of the economy. Riggins said Waterford Estates had been envisioned as a community of fabulous homes approaching $1 million in price, but the development has found its niche now in the $300,000 to $500,000 range.

Steve Clark, the CEO and president of the Fayetteville Chamber of Commerce, said his city is unique in that its growth was predominantly east, a fact that led to the creation of subdivisions along Highway 45. The other major cities on the Interstate 540 corridor have seen their upscale development to the west, although Fayetteville has seen western expansion lately as well.

Fayetteville, though, started east toward smaller cities such as Elkins and Goshen. In those heady days, Clark said, Goshen made plans to develop more than 4,400 lots, about four times the population of the city.

“Everybody thought Goshen would become part of the city limits,” Clark said. “People were moving out on 45. There was more land, and they made a bet.

“As we moved into the 2000s, it still looked like a smart bet. Everybody thought it would never end, but it never never ends, and it ended quickly.”

Just as Riggins believes in Waterford Estates, David Harris believes in Otter Creek. Harris, a longtime builder of upscale homes in northwest Arkansas, said lots in the Cave Springs development southwest of Rogers once went for more than $70,000 before the housing crash and recession knocked real estate prices for a loop.

Prices for those lots, Harris said, are now in the $40,000 to $50,000 range. Harris said an easy if not completely scientific way to determine the expected price of a house is to multiply the lot price by six to seven. A house built on a $70,000 lot is in the neighborhood of $450,000, so a drop in lot price to $40,000 means the house built on it drops to $240,000 to $280,000.

“It’s going to take a while to recover,” Harris said.

Builders said there were some hard lessons learned when the hammer fell. Clark likes to joke that during those manic times when making money seemed so easy, anyone with a hammer called himself a builder and anyone with a briefcase called himself a developer.

“People were developing every piece of land, and everything was selling,” said Jack Hales, a builder and owner of a building supply company. “I can’t count how many developers there were in 2005. Most of them are out of business.”

Clark thinks Fayetteville’s expansion will reach Elkins before it gets to Goshen. But northwest Arkansas is growing at a rate of 23 people a day, Clark said, and all those folks have to live somewhere, so places seemingly islands such as Waterford Estates can still play a vibrant role in the area’s expansion.

 

 

Please read our comments policy before commenting.
Search

Latest Arkansas Business Poll

Did the Fed make the right call on interest rates?