I need another cup of coffee before I dive into this.
Or a glass of whiskey.
I see posts like this all the time. While they’re most likely meant to grab reactions, they’re a demonstration of ignorance at best.
I know every real estate market is different. I’ve got my finger on the pulse of both the Austin market and here in Northwest Arkansas. I get it. However, the fact of the matter is that a president, whether Democrat or Republican, will not be able to come in and single-handedly “crash” the real estate market. Wherever you’re at.
Since NWA is my home, I’m going to give you four solid reasons I believe we will see housing prices continue to rise here and why this spring will indeed be a hot market. No matter who you voted for.
But first, let’s talk about how stuff works.
Yes, I know that a political administration’s policies will affect the market. But I also know how our economy works, as well as the Federal Reserve and their decision on what to do with interest rates, which is what really dictates what happens in all things real estate.
A quick lesson in how the Fed determines what to do with the interest rate.
The Federal Reserve does not make arbitrary decisions based on the last election cycle. Decisions regarding whether to lower the interest rate are based on multiple fronts.
- Inflation: Target inflation rate is 2%. If inflation remains below this rate, this is an indicator rates could drop. Today’s current rate is 2.7%, which is a huge improvement from June of 2022 where it was as high as 9.1%.
- Employment and labor markets: Higher unemployment rates, slow job creation, and stagnant wages could trigger a rate cut.
- Economic growth: Slower GDP growth and a drop in consumer spending could signal a cut.
- Stock market trends: Sharp declines can influence the Fed’s decisions on rate cuts.
- Global market trends: Global slowdowns can also predict what direction the Feds could take in regard to rate cuts.
…just to name a few. Even natural disasters can affect the decision to raise or lower the interest rates.
And yes, I know certain policies will affect the market. But please. Stop the fatalism. The sky is not falling, no matter who the president is.
Now, grab yourself a hot cup of coffee, and let’s go to my four reasons why I believe we’ll see a boon in the NWA market.
- Continued Economic Expansion. Everyone knows Bentonville is the home of Walmart. But did you know J.B. Hunt, Tyson Foods, and Simmons Food all call this area home and continue to attract a skilled workforce? Additionally, Walmart’s new 1 billion dollar “Home Office” campus, set to open in 2025, is expected to continue to boost local employment and housing demand.
- Population Growth: Let’s talk people. Bentonville’s population rose by 2.7% in 2023, and it’s not slowing down. This indicates a sustained demand for housing.
- Limited Housing Inventory: While there’s lots of new construction happening here, housing inventory is still low. This means increased competition for buyers and higher prices. According to the Skyline Report, in the first half of 2024, 4,799 homes were sold in Benton County and nearby areas, marking an 8.5% increase from the previous year, with 39.5% being new constructions.
- Stable Mortgage Rates: Finally, future projections indicate that mortgage rates may decline slightly this year, encouraging even more buyers to enter the market and increase housing demand.
Do I have a crystal ball? No. Sure wish I did sometimes, but I don’t need one to determine whether or not the market is going to crash this year. All facts point to a growing real estate economy in 2025.
Similar to my waistline from the holidays. But I digress.
So, to my real estate colleagues, stop worrying, get out there, and sell some houses.
The Overly Caffeinated Agent 