Washington County Single-Family Outlook (Analysis)

Single-family Lots
• Click here for the chart of lots sold in 2005.

• Click here for the chart of lots sold in Washington County.

• Click here for the chart of lots in pipeline by projected dwelling price.

• Click here for the chart of lots in pipeline by sub-market.

(Charts require Adobe Acrobat viewer. Click here for a free copy.)

Population growth in Washington County has certainly been instrumental in helping to spur a strong residential market. A new result of that growth is the emergence of outlying communities near Fayetteville and Springdale being stimulated by the need for more affordable housing in the area.

Demand for housing in the price range of $125,000 to $175,000 has been steadily increasing. In part, due to fast rising land costs, this price range isn’t readily found within the city limits of these two cities.

Nearly half of the lots in the pipeline in Washington County are located in outlying communities. Cities like Elkins, Farmington, Prairie Grove, Lincoln and Greenland remain attractive to home buyers due to their close proximity.

These communities generally provide developers with more affordable land, which results in the lower dwelling prices. The population of these cities is generally 1,000 to 4,000 residents.

Another result of the lack of supply of homes in the price range of $125,000 to $200,000 is Springdale having only 167 new home sales during the first half of 2005.

The sale of new homes in Springdale is on pace to be lower than the previous year’s sales, which would be a first since Real Estate Market Data Inc. started tracking sales in 2001.

Lowell, although located in Benton County, is expected to make a significant impact on the Washington County residential market. Recently, the city of Lowell decided to begin allowing certain types of residential development that had previously been under a growth moratorium since 2003 because of sewer capacity issues. Lowell had become an area with lower priced single-family housing prior to that moratorium.

Looking forward, this could become another alternative for home buyers looking for affordable housing in the area, especially since other nearby communities like Elm Springs, Tontitown and Johnson have dwelling prices primarily $350,000 and above.

Another area of strong development activity is in west Fayetteville, west of Interstate 540 from West Salem/Weir Roads and south to U.S. Highway 62.

Over the past two years, more than 1,000 lots have been prepared for construction in this area alone, with nearly 300 added during the first half of 2005 (compared to 422 in all of 2004). Dwellings in west Fayetteville are estimated to range in price from $160,000 to $600,000.

During the first half of 2005, the overall Washington County single-family housing market remained strong with 462 new home sales. New home sales are currently on track to exceed 2004’s total of 804.

More importantly, more than 1,000 new lot deliveries (lots receiving final plat from their respective city) far exceeded the amount of new lots delivered during the same time period in 2004.

Obviously, as developers continue to drive up land costs in Northwest Arkansas, demand for affordable housing will only increase. In Washington County, the areas outside Fayetteville and Springdale should continue to grow as home buyers look for lower-priced home alternatives.

REMDI tracks various aspects of the single-family housing market in Northwest Arkansas through data obtained from public records, the Northwest Arkansas MLS Records, developers, builders and on-site inspections. In Washington County, the cities of Fayetteville, Springdale, Farmington, Greenland, Elkins, Goshen, Johnson, Elm Springs, Tontitown, Lincoln and Prairie Grove are covered.