Home sales have been down in Conway and Faulkner County over the past year. Those in the housing industry are hopeful that consumers will take advantage of several factors working in their favor and that the industry will pick up in the next few months.
According to the Arkansas Realtors Association, home sales for January through November 2008 were down 14.3 percent from the same period in 2007. For the month of November alone, the report said, home sales were down 57.01 percent year-over-year.
PulseofConway.com reports a 38.8 percent drop in building permits for single family homes in Conway for January through November and a 72 percent drop from November 2007.
Ethan Nobles of the Arkansas Realtors Association said the National Association of Realtors has predicted existing home sales will pick up in the first quarter of this year.
However, he said, "We don't do predictions, and here's why. (Recently) the federal government announced they were going to buy $500 billion of mortgage backed securities held by Fannie Mae and Freddie Mac. When they announced that, those securities became much more desirable, and investors started to buy them. When that happens, yields decrease on those securities, and that has a direct impact on mortgage rates. They go down. So we're hovering around 5 percent on a 30-year fixed rate mortgage. That is an historic low. No one really predicted that happening. We just don't know what action the government is going to take to make purchasing a home more attractive for buyers.
"There's a perception that banks are out of money, but banks are lending. A lot of those zero down loans are pretty well gone, unless you qualify for one under the U.S. Department of Agriculture or under the Veterans Administration. Chances are you're going to have to come up with a down payment. That can be through a (Housing and Urban Development) loan, which is 3.5 percent. Conventionally they're looking for about 5 percent.
"If you're looking in Conway, the HP plant coming in and Southwestern Energy will boost home sales."
Johnny Adams, president of First Security Bank in Conway, said interest rates are excellent.
"We're in a situation where rates are the best they've been in some time, below 5 percent," Adams said. "It really has stirred a lot of refinancing in our market which has the ability to lower payments for folks, which is a good thing."
Adams said Conway has not seen a dramatic increase in new home sales, but the area is better off than many other markets.
"The market is a function of supply and demand. Builders have stopped building," Adams said. "There is a great reduction in new homes for sale. Hopefully, with good news in job creation HP, Southwest Energy we'll see a turnaround, a need for new housing would spur our housing industry."
He said some homeowners have experienced depreciation in their home values below what they owe, but "certainly not the 20 and 25 percent that they've seen in California and other areas.
"That's one of the good things about living here. The market tends to be more stable. We don't have the big upswings, but we don't have the big losses when things turn down."
He added, "Rates dropped just after Christmas. We've seen a little turnaround with the lower rates. It's a good time with the lower rates. If they're renting and they can afford the down payment, it's not a bad time to buy."
Bill Hambrick, store manager at Ridout Lumber, said it is a bad time for contractors.
"Those that have been in business for years don't have anything to do right now," he said. "I hope it picks up in the spring, but it doesn't show signs of doing much. When the sun's shining and it's pretty it looks like it's going to pick up. I've been seeing signs of people wanting to do more, but I just don't know.
"It's a good time to build if you can get the loan because lumber's cheaper than it's been in years. With rates the way they are, it would be an excellent time to build."
Greek Miller of Greek Miller Construction Inc. said his new home business has slowed to below half its former rate of activity. He has been a builder in Faulkner County for 32 or 33 years, he said.
"We're picking up a lot of remodel work, so it's keeping the economy going here," Miller said. "I don't think Faulkner County has got the problems that some of the other cities do. I think we're still able to get a little work done here where others are not. I think late spring, early summer, with HP coming, you're going to see new housing pick back up. I think our days of years ago when we had so many good years are over, but there will be plenty of work for everybody."
He added, "It's been rough on everybody right now, but I feel we have better days ahead of us. A lot of that is due to Conway itself. Conway seems to be doing better than other areas of the state."
(Staff writer Rachel Parker Dickerson can be reached by e-mail at rachel.dickerson@thecabin.net or by phone at 505-1277. Send us your news at www.thecabin.net/submit)
