Layoffs could damage real-estate market on two fronts – Reported by The Benton County Daily Record in Northwest, Arkansas
By Tom Treweek Staff Writer ! email@example.com
Posted on Thursday, February 12, 2009
BENTON COUNTY – The real-estate market in northwest Arkansas has been slow of late; not that it hasn’t been slow everywhere. But with up to 800 layoffs announced by the Wal-Mart Home Office, local brokers are worried about further damage.
Crye-Leike broker Dave Mishler, who works for the company’s Bentonville office but will soon head the Bella Vista office, said there is about a 14-month supply of vacant homes for sale in Bentonville, Bella Vista and Rogers. The Wal-Mart layoffs, he said, could add another three- or four-month supply. Should those now without jobs need to move to find work, the market situation could give them little chance to sell their current homes. Mishler estimated that two-thirds of the affected employees are likely homeowners.
“It could make it difficult for those looking to relocate,” he said.
Cameron Torabi, owner and broker at Exit Pinnacle Realty in Rogers, said the relative unavailability of financing will also make homes difficult to sell.
“A lot of things are playing into the mess,” Torabi said.
But what may damage the market most, reaching both residential and commercial properties, is the emotional impact of the layoffs, shaking the confidence residents and investors had placed in the world’s largest retailer.
“In our area, Wal-Mart is kind of like the flagship of stability,” Torabi said.
Before Tuesday, Torabi had seen a lot of interest in this region because of the perception that Wal-Mart provided a solid foundation for the local economy.
“We’ve been getting a lot of big-money investors,” Torabi said. “They come to this area because of the affordability index, as well as the number of stable Fortune 500 companies we have here.”
But now that confidence is shaken.
“I call it the psychology of the event,” Mishler said. “To have this happen is kind of shocking.”
In a few months, however, the community’s psyche will return to normal, Mishler said, and the economy will rebound.
“I still am very positive on this area,” Mishler said. “And if these people would stick it out, I still believe northwest Arkansas will rebound faster than other areas nationally.”
Torabi hopes to absorb some of that workforce. He plans to call some of those who were laid off from Wal-Mart’s real-estate division.
“With the learning and the experience they have, it could be very beneficial,” Torabi said.
Torabi said there is opportunity for anyone in the real-estate field, but Mishler said he worries that oversaturation of brokers would mean less money for everyone trying to sell land.