Washington County Single-Family Outlook

Based on Multiple Listing Service data, there were over 3,000 single-family home sales in Washington County in 2005. This continues the annual increase in home sales experienced since 2002. The median home price for 2005 for all homes sold also increased above the year-end 2004 level.

As of year-end, the median sales price was reported at $154,000 for all homes sold in Washington County, which was about 12 percent higher than 2004.

While home prices and demand for housing remained strong in 2005, the supply of new homes and planned construction in Washington County continued to grow. Heavy development over the past few years has helped push land prices to increase, which has been influential in higher home prices.

Although population growth has supported the strong housing market in Northwest Arkansas for the past several years, it now appears the supply of lots being developed for homes projected to be delivered in the next two years could exceed demand.

As of year-end 2005, there were over 9,500 single-family lots planned (or commonly referred to as “in the pipeline”) in Washington County. This number is twice the number of lots planned at year-end 2004.

Most of the planned lots in Washington County are located in Fayetteville and Springdale, although outlying areas like Farmington and Prairie Grove have a significant number of planned lots as well.

The Fayetteville market remained strong with over 600 new lots occupied in 2005, which was up from 487 in 2004. The number of unoccupied, developed lots increased as well to 1,150 as of year-end.

The west Fayetteville area continues to experience strong developer interest. This includes the area west of Interstate 540 from West Salem/Weir roads and south to U.S. Highway 62. More than 1,200 single-family lots have been added to this area over the past three years.

Newly developed single-family homes in west Fayetteville are estimated to typically range in price from about $160,000 up to $600,000.

Springdale’s strong housing market continued in 2005 with more than 400 new lots occupied. There were also over 900 unoccupied developed lots at year-end, which was an increase from just over 600 at year-end 2004.

As of year-end 2005, there were over 2,800 lots in the pipeline for the Springdale market. A development located in the northwest portion of the Springdale market has a large number of those planned lots.

Among the smaller, outlying areas affecting the housing market in Washington County, Farmington is having a significant impact. As of year-end 2005, there were over 1,000 lots planned for this area and over 150 lots unoccupied and developed. Due to Farmington’s proximity to the Fayetteville city limits and land availability, it has been an attractive alternative for developers. However, if all of the planned lots are developed in the next two years, Farmington’s population would need to grow by more than 80 percent.

Another area experiencing strong growth in Washington County is Prairie Grove, located about 10 miles west of the Fayetteville city limits.

As of year-end 2005, Prairie Grove had about 250 unoccupied, developed lots and more than 900 lots in the pipeline. A large number of those lots in the pipeline will be in one development with lot prices of about $40,000 to $50,000.

Other areas in close proximity to Fayetteville such as Elkins and Lincoln are experiencing growth due to their availability of land and in some cases lower land prices.

These two cities also offer affordable new housing, which is becoming harder to find in Washington County. Unfortunately, in Elkins, this may end due to the city putting a halt on residential subdivision development due to sewer capacity issues. As for Lincoln, single family housing in active subdivisions and homes planned for construction will range in price from about $110,000 to $165,000.

Areas such as Elm Springs and Tontitown, which border Springdale to the west, are also likely to have a considerable effect on the housing market in the coming years. With the opening of Springdale’s Har-Ber High School and Hellstern Middle School, developments west of Springdale are becoming more attractive.

Tontitown, which had 455 lots in the pipeline at year-end 2005, is expected to become even more attractive to developers in the near future.

The city of Tontitown is expected to receive sewer service from Springdale, which will increase activity in that area.

It is important to note not all areas of the market are expected to suffer as more housing is added in Washington County.

Demand is expected to remain strong in the Northwest Arkansas area, and affordable housing is always in demand. In the past two years, more than 3,000 homes were sold in the price range of $150,000 and below. Unfortunately, there were just over 550 homes in the pipeline in Washington County in that projected price range as of year-end 2005, compared to more than 3,000 homes in the pipeline with a projected price range of $225,000 to $350,000. As home prices increase, home sales will certainly be affected in the coming years as affordable homes become harder to find.

Real Estate Market Data tracks various aspects of the single-family housing market in Northwest Arkansas through data obtained from public records, the NWA 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.

Click here for a look at lots in the pipeline by city in Washington County.

Click here for a look at Washington County lot activity.