High-End Housing in Active Subdivisions Shows Decline (OPINION)

The focus of this article is the upper-end, single-family sector of the residential real estate market in Benton and Washington counties.

Specifically, sales in active subdivisions in the $500,000 to $999,999 and $1 million and above price ranges are considered. Streetsmart defines active subdivisions as subdivisions (or phases) yet to be completely built out. Subdivisions are dropped from the active list when they are substantially built out and new construction has failed to occur for several quarters.

Basically, single-family dwellings in active subdivisions represent new or newer homes. The data discussed in this article represents our research from public records.

In 2009, there were 40 sales of single-family dwellings in active subdivisions in the $500,000 to $999,999 price range in Benton County. These sales represented new construction and re-sales.

The actual sales price range was approximately $585,000 to $990,000, while the range in price per square foot of dwelling living area was $116.36 to $277.81.

In 2010, the number of sales in this price range in active subdivisions in Benton County totaled 34, reflecting a 15 percent decline from the 2009 total. The 2010 sales price range was approximately $500,000 to $975,000, and the range in price per square foot of dwelling living area was approximately $110.46 to $219.25.

The mean prices of new construction sales/re-sales in this price range in active subdivisions in Benton County were calculated to be $718,025 in 2009 and $647,353 in 2010. The decline between 2009 and 2010 is indicated to be 9.8 percent.

The number of new construction sales/re-sales in Benton County in active subdivisions in the $1 million and above price range for 2009 and 2010 totaled six and three, respectively. This reflects a year-over-year decline of 50 percent.

The actual sales price ranges were approximately $1,025,000 to $1,874,000 in 2009 and $1,088,000 to $1,237,000 in 2010. The per square foot of dwelling living area price ranges were approximately $169.65 to $343.66 in 2009 and $207.24 to $296.14 in 2010.

Mean sales prices in this price range in active subdivisions in Benton County were calculated to be $1,304,000 in 2009 and $1,155,000 in 2010. The decline in the mean sales price between 2009 and 2010 is indicated to be 11.4 percent.

In Washington County, there were 10 new construction sales/re-sales in active subdivisions in the $500,000 to $999,999 price range in 2009, and five in 2010. This reflects a 50 percent year-over-year decline in the number of sales. The actual sales price range was approximately $505,000 to $875,000 in 2009 and $525,000 to $950,000 in 2010.

Mean sales prices were calculated to be $635,400 in 2009 and $638,200 in 2010. This represents a year-over-year increase of 0.44 percent.

The per square foot of dwelling living area price range was approximately $126.25 to $189.58 in 2009 and $87.34 to $196.57 in 2010.

Lastly, the sales price range of $1 million and above in Washington County is considered. Again, the data pertains to new construction sales/re-sales in active subdivisions.

The number of sales was low in both 2009 and 2010. In 2009, there were two sales in this price range, while in 2010 there was one. This reflects a year-over-year decline of 50 percent.

The actual sales price range was $1,400,000 to $2,190,000 — with a mean price of $1,795,000 — in 2009. The lone sale in 2010 was at a price point of $1,395,000, which is $158.52 per square foot of dwelling living area. The per square foot of dwelling living area price range in 2009 was approximately $269.23 to $321.63.

The data reflects declining demand in the upper-end, single-family residential sector pertaining to new construction sales/re-sales in active subdivisions for the years 2009/2010. This, obviously, is not unexpected. Hopefully we will see more stabilization in the overall residential sector in the second half of 2011. 

Tom Reed is a partner in Streetsmart NWA, which produces quarterly reports pertaining to the residential, multifamily and commercial sectors of the real estate market. Company offices are located at 2804 Main Drive, Suite C, Fayetteville, Arkansas. The phone number is (479) 575-9100.