Regional building pace picks up steam

Homebuilders across Northwest Arkansas welcome the early spring weather and the busiest February they can remember in several years.

New residential construction permit values in Fayetteville, Springdale, Siloam Springs, Rogers and Bentonville together jumped 57.74% to total $21.661 million in February, versus $13.732 million a year ago.

There were 103 new homes started last month, half of those were in Bentonville. The city issued 51 permits for new single-family or duplex dwellings between Feb. 1 and Feb. 29. The permit valuations totaled $9.168 million, up 118.64% from a year ago.

“We have been incredibly busy at the city and there is no sign of a slowdown through March. Builders seem to be a little more optimistic and it’s good to see some of the empty subdivisions active again,” said Lance Blasi, chief building inspector for Bentonville.

Springdale has also seen a rapid increase in residential building activity. The city issued 19 permits in February totaling $4.997 million, up 167.5% from a year ago.

Rogers issued 12 new home permits in February which were valued at $2.797 million, up 16.25% versus last year.

Fayetteville and Siloam Springs resisted the upward trend.

Fayetteville posted a 1.38% decline in new home permit values last month. The city issued 21 new permits valued at $4.699 million.

Siloam Springs did not issue a new home permit in February.

Tom Reed, appraiser and partner with Streetsmart Data, said new home inventories are pretty low across the entire region. He said the excess left behind when the market halted in 2007 has been absorbed. Builders and their lenders have been cautious with new building projects in the past three years which has also kept a lid on new construction, he said.

“If you are going to have a new home market, you have to keep building. We continue to see bankers working with a few homebuilders to get homes on empty lots in subdivisions that were not finished out before the market turned. We have noticed there is more new construction underway than we remember in some time. A warm winter and early spring are also likely part of the reason for the uptick in activity,” Reed said.

U.S. homebuilder sentiment across the nation remains at its highest level since June 2007, according to the National Association of Home Builders.

The NAHB/Wells Fargo Housing Market index held steady at 28, though economists expected the index to register 30.

The index is just one metric used to gage the pulse of homebuilders and residential construction sector.

Reed said confidence is improving overall, but it’s still got a long way to go to reach the levels of optimism set at the market peak in 2006.

He said if the trend continues to mid-year, he will feel a lot better about the prospects for the slowly recovering economy.

COMMERCIAL SECTOR
After a sluggish start in January, the region’s commercial building sector got a shot in arm in last month with a $28.315 million multifamily project in south Fayetteville.

North Carolina-based Campus Crest is building a 232-unit project which is a joint venture with a student housing operator at the University of Arkansas. The multi-million complex is slated for completion by the start of the fall semester, according to the company’s website.

The commercial sector includes new businesses, schools, industrial and multifamily projects. The five cities together issued 16 permits valued at $33.228 million in February, up 1,245% from a year ago.

Without the large multifamily project, the region’s commercial building pace still increased 208% from a year ago.

On tap in Bentonville is a new McDonald’s restaurant located on Regional Airport Boulevard. This was the only new commercial permit issued in February for the city. There were no new projects a year ago.

In Springdale there were two new permits issued totaling $1,931 million, compared to zero a year ago.

"We are seeing a diverse amount of construction planned for the city," said Lance Eads, vice president of economic development for the Springdale Chamber of Commerce. "And we believe we're seeing a significant trend dating back to June of 2011. Our commercial building permit valuations have been $1.4 million or higher in eight of the last nine months.”

In Rogers and Siloam Springs, commercial permit values were lower than in the year-ago period. Rogers had 2 permits totaling $827,000, down from $1.26 million a year ago.

Siloam Springs did not issue a new commercial project last month.

When combining the two building sectors the region’s February’s permit values totaled $54.889 million, up 194.38% from $18.645 million a year ago.