Economist Says Residential Market has Turned From the Bottom

The residential real estate market in Northwest Arkansas continues to show several indicators of positive absorption and growth through the first half of 2012.

The results are included in the Skyline Report, released today. The biannual analysis is sponsored by Arvest Bank and conducted by the Center for Business and Economic Research in the Walton College of Business at the University of Arkansas.

Economist Kathy Deck said the latest report is a clear indication that the market has turned from the bottom.

“It was pretty much good news across the board” said Deck, the director of the CBER.

There were signs of positive absorption rates across the entire market. During the first half of the year, 456 houses in active subdivisions became occupied, down 27.3 percent from the 627 in the last half of 2011.

The report showed a 145.4 months’ supply of remaining lots in active subdivisions in Northwest Arkansas.

Additional improvement was noted in number of building permits issued, average price of existing home sales and average cost per SF for both Benton and Washington counties.

There were 880 residential building permits issued in the first six months of 2012, up 57.7 percent from the same time period of 2011.

Regarding the average price of existing home sales, the price was up 12.3 percent in Benton County to $173,856. In Washington County, the increase was 16.3 percent to an average of $161,150.

Home sold in Benton County had an average cost of $76.82 per SF, up nearly 12 percent from the same time period in 2011.

Prices for Washington County homes sold increased 13.7 percent to an average of $78.62.

“We take these improvements in the housing market to be a positive sign on where we have been,” said Todd White, senior vice president at Arvest Mortgage Co.

The report also indicated there are 3,139 approved lots within the two counties in 60 preliminary or finally approved subdivisions.

If this lot inventory is added to the remaining lots in active subdivisions, there are 180.1 months of inventory in Northwest Arkansas, a worst-case scenario as many of the projects may be delayed or changed before becoming active.

In the Bentonville pipeline, there were 382 lots in eight subdivisions reported. In Centerton, five subdivisions were planned with 400 lots.

The Rogers planning commission had approved four subdivisions with 225 lots. There were 118 planned lots in five subdivisions in Siloam Springs.

Cave Springs had 215 lots in three subdivisions. The cities of Decatur, Highfill, Pea Ridge and unincorporated areas of Benton County had approved an additional 243 lots in 10 subdivisions.

Fayetteville had 610 lots in 13 subdivisions and Springdale had 218 lots in five subdivisions.

The cities of Elkins, Elm Springs, Farmington, Goshen, Prairie Grove, West Fork, and Washington County accounted for an additional 693 approved lots in seven subdivisions.