Area building permit values down 31% in August; Greenwood posts gain
Fort Smith area building activity — the one bright spot in The Compass Report for the second quarter of 2010 — is on a downward trend entering the second half of 2010.
The combined value of building permits issued during August in Fort Smith, Greenwood and Van Buren fell more than 31% compared to August 2009, with the decline pushing year-to-date Fort Smith permit values down more than 23%.
Total value of the 211 permits Fort Smith issued in August was $6.379 million, down 38.2% from the August 2009 period. Commercial permitting was down in August, with the city issuing commercial permits valued at $1.708 million, down 66.3% compared to commercial permit values in August 2009.
For the first eight months of 2010, building permit values in Fort Smith total $76.732 million, down 24.7% from the $101.931 million during the same period of 2009.
However, residential construction picked up the pace in August after a slow July. The city issued 19 permits for new home construction valued at $2.923 million in August, up 39.6% in value from the 17 permits valued at $2.092 million in August 2009.
Up until July, the new home construction sector in Fort Smith was hot. June marked four months of year-over-year gains in the number and value of new home construction in Fort Smith.
• July 2010: $1.878 million, compared to $2.425 million in July 2009
• June 2010: $5.159 million, compared to $2.261 million in June 2009
• May 2010: $4.789 million compared to $1.716 million in May 2009
• April 2010: $4.51 million compared to $4.49 million in April 2009
• March 2010: $5.976 million compared to $2.02 million in March 2009
A federal tax credit for first-time homebuyers and the expiration of that credit is the primary reason for the surge and decline, respectively, in new home construction, according to David Hughes, executive director of the Greater Fort Smith Association of Homebuilders.
The federal tax credit provided up to $8,000 for first-time home buyers and up to $6,500 to home buyers. The program requires homes to be under contract by May 1 and close before July 1.
Hughes has said consumer uncertainty and the election cycle may result in weak housing demand in future months.
GREENWOOD, VAN BUREN
August permit values in Greenwood totaled $1.721 million, a big increase from the $354,845 in permit value in August 2009. The August gain came courtesy of 7 new residential permits with a total value of $1.715 million.
The south Sebastian County city also saw a drop in new home permits, with three issued valued at $640,400. During July 2009, the city issued eight permits valued at $1.05 million.
Van Buren posted an August permit value total of $861,150, a 63.1% decline form the $2.334 million in August 2009. The August 2009 numbers included permits for $1.502 million in commercial construction.
Van Buren is likely to have a respectable 2010 permit total thanks to a $13.587 million permit issued for King Elementary School. During April, Van Buren officials issued permits valued at $13.965 million, compared to $1.501 million in April 2009.
Combined, Fort Smith, Greenwood and Van Buren permits totaled $8.962 million in August, down 31.1% compared to the combined value of $13.021 million in August 2009.