NWA sees housing construction boomlet

Builders across Benton and Washington counties have been slinging their hammers to a steady pace through eight months of this year with new construction permits rising 49% in August when compared to the year-ago period.

The region’s four largest cities issued 165 permits for new homes during August. Those projects were valued at $40.986 million, versus 121 permits worth $27.471 million last year. The construction pace has risen 89% since August 2011 when these same cities issued 87 permits valued at $17.773 million.

Residential Permit Values (August)
Fayetteville: 43 units, $10.828 million, up 59%
Bentonville: 78 units, $20.191 million, up 55%
Rogers: 35 units, $6.847 million, up 41%
Springdale: 9 units, $3.130 million, 10.6%

Sean Morris, general contractor for ARC – Walker Brothers Construction, said he has seen a lot of new crews working in the area in recent months.

“Some of those who got out of the business have started building again and we also see new and outside area firms at work in this region,” Morris said.

The local metro area added 700 construction jobs since August 2012, according to the Bureau of Labor Statistics. That 8% increase was strong enough to push the metro area ranking into the top 50 out of 339 regions tracked by the Association of General Contractors of America.

“It has been a tough decade for much of the construction industry, considering that many areas experienced peak employment levels in the middle of the last decade,” said Stephen Sandherr, CEO of the contractor association. “More troubling, it will take a lot more growth before significantly more metro areas get back to peak employment levels in construction.”

Morris voiced some slight concern that there is a great deal of building going on right now.

“We have been building at a nice, steady pace, and don’t have much done product sitting around, but I have been in some subdivisions where just one or two houses are sold with 20 or more finished or nearly completed,” he said.

MountData.com reported there were 340 new homes listed for sale at the end of August. New homes comprised 9.12% of the overall listings last month. The percentage of new home inventory has risen from 7.76% two years ago.

Nationwide, new homes made up just 6% of total home sales last month, that is down from historical levels of 12%, according to the National Association of Home Builders.

Through June, new home sales in Northwest Arkansas totaled $109 million, up 28% from the same period in 2012, according to Paul Bynum, statistician with MountData.com. Bynum said builders sold 431 units in the first half of this year, up 15% from the prior-year period. The mean home price for new construction was $231,300 in the first half of 2013. Prices rose 9% from a year ago.

Morris said his firm on pace to close roughly 15% more home sales this year over last.

COMMERCIAL SECTOR
It’s been a few years since the building crane, once the official bird of Northwest Arkansas, has heavily decorated the regional skyline. But commercial jobs have been quite steady for the past 12 months with multifamily projects going up around the University of Arkansas and retail for restaurants and shopping continues to come online in Benton County.

In August, the four cities in this report issued a handful of new commercial jobs totaling $6.232 million in value. Commercial permit values declined from $13.918 million in the same month last year.

Springdale issued a permit for another Kum & Go located at 500 S. Thompson Ave.

In Rogers the city issued permits for the new Chewy’s Mexican restaurant at 4889 W. Pauline Whitaker Pkwy., and the Mommy & Me Nail Salon.

Bentonville issued a permit for the new Dunkin Donuts that will be located at 2349 S.E. 14th Street, as well as another strip shopping center along Walton Boulevard.

There were no new commercial permits issued in Fayetteville last month.

Other large scale commercial projects on tap Benton County over the next 30 to 60 days include construction of the AMP entertainment venue, a Wal-Mart Supercenter in Springdale, two Wal-Mart Neighborhood Markets — Centerton and Siloam Springs.

CVS Pharmacy has pegged two locations in the region, Bella Vista and Fayetteville and while those cities have approved building projects the land deals have not yet been closed. Tim Harrell, owner of the proposed site in Bella Vista, said he expects a deal will be reached in the next 30 days.

Permit Comparisons (January through August)
Fayetteville
2013: $221.519 million
2012: $218.246 million
1.49%


Bentonville
2013: $124.865 million
2012: $122.234 million
2.15%


Springdale
2013: $51.857 million
2012: $47.634 million
8.86%


Rogers
2013: $60.834 million
2012: $65.988 million
-7.81%

(Permits are for new construction, additions and remodels are not included.)