George Faucette, Coldwell Banker Harris McHaney & Faucette, Shares on the Residential Real Estate Market (Exec Q&A)

George Faucette is co-CEO, with Pat Harris of Rogers, of Coldwell Banker Harris McHaney & Faucette. His company has 160 sales associates at four offices in northwest Arkansas.

Background: Faucette, 68, is a Fayetteville native. He graduated with a bachelor’s in business administration from the University of Arkansas in 1967.

Experience: Faucette was a partner in Faucette Real Estate Co. from 1975-1987, president and majority stockholder of Coldwell Banker Faucette Real Estate in 1988 and president and sole stockholder in Coldwell Banker Faucette Real Estate from 1989-2009. He has held his current position since 2010.

Q: What is the state of the residential real estate market in northwest Arkansas? 

A: It is getting much better. During the last four months, my company’s new business increased by 38 percent compared with the same four months a year earlier. It is also better than at any time since that same time frame in 2007-08. Our closed business for that same time frame was up 25 percent, and the overall market was up 15 percent.

Q: What sectors of the residential market were most affected by the bursting bubble?

A: Initially, it was the upscale market, as the supply-demand curve was tremendously out of balance. There were substantially more new homes well under construction or completed, and at the same time, corporations were beginning to delay expansion and the relocation of employees. Second to that was the first-time home buyer, as credit standards and loan requirements tightened appreciably and locked out many in this sector from being able to secure financing and, therefore, purchase a home.

Q: How have your clients weathered the housing bust?

A: Our clients, whose jobs were secure, with no overriding reason to sell, were fine. They just delayed their moving plans.

Others who had more pressing needs to sell, such as families relocating or [experiencing] a job loss or other financial difficulty, sustained losses of some or all of their equity, as values declined as much as 30 percent during the four-year downturn.

Q: What kind of backlog of inventory is there for houses in the $400,000 range and up?

A: Approximately a 16 months’ supply.

Q: Are upscale real estate clients still seeking houses with massive square footage, or has the demand for quality overtaken the demand for quantity?

A: Quality is beginning to trump quantity. Price per SF is still the standard by which houses are evaluated and compared, but buyers are willing to pay more per foot if the quality and extra features are in place and evident.  

Q: What is the attitude of real estate sellers these days?

A: Much better than a year ago. Consumer confidence has increased tremendously in the last 120 days as much of the economic news, both nationally and globally, is positive. Additionally, home prices have stabilized, with signs of some slight uptick in prices. Interest rates are still at historic lows. Thirty-year loan rates have hovered between 3.85 and 4 percent for approximately six months, and 15-year rates are in the 3.15 to 3.25 percent range.