February building permit values indicated NWA growth ongoing

February was another cold and snowy month but homebuilders were able to ramp up their permit paperwork in the region’s four largest cities. Springdale, Bentonville, Fayetteville and Rogers issued new residential permits valued at more than $30.418 million last month, up 5.3% from $28.881 million the year ago period.

Last month the combined cities issued 129 permits for new single family homes planned. This was stable against the 125 permits issued a year ago. However, permit activity was up 84% from the previous month.

THE NUMBERS
Residential Permit Values (February)
Bentonville: $12.801 million, up 18.6%
Fayetteville $8.075 million, up 27.6%
Springdale: $6.324 million, up 13%
Rogers: $5.155 million, down 16.5%

The recent Skyline Report sponsored by Arvest Bank indicates the supply of new, completed homes in the two-county area shrunk by 60% the back half of 2013 amid steady buyer demand.

“The balance between absorption of the existing houses in new subdivisions and the small increase in building permit activity across Benton and Washington counties is exactly right,” said Kathy Deck, lead researcher for the Skyline Report at University of Arkansas. “We are seeing the market move forward without undue concern with oversupply that we have seen in the past.”

Deck said the level of new construction is appropriate to the level of growth in the area.

“This shows us that we are sustaining reasonable growth," she added.

This is good new for homebuilders and their suppliers who have managed to stay busy, particularly in Benton County because of pent-up demand for new home construction. 

CONTINUED REBOUND
Murray Mansch, owner of Flooring America stores in Springdale and Bentonville, said his business was up 15% last year and it continues to rebound from the major housing bust eight years ago.

“About 40% of our business is new home construction. … We are seeing smaller builders who sat out for a while rekindle their business and others expanding the number of homes they are starting from pent-up demand,” Mansch said. “As home values are coming up, we are also seeing more remodel business that includes new flooring.”

He estimates his own business will grow another 15% this year after recent meetings with his largest homebuilding customers. He said lumber prices are holding steady despite the uptick in demand. Mansch said freight on flooring materials is a big part of the overall costs. He said wood flooring is the most popular choice today and most of it is harvested in the U.S. and shipped to China for manufacturing and then shipped back as wood flooring.

COMMERCIAL WORK
The four cities issued just two new commercial permits between them last month totaling $2.495 million. The number follows an active January with several large permits totaling $25.9 million. New commercial permits declined 49% from the $4.898 million reported a year ago, among the respective cities.

On tap in Fayetteville is a new Slim Chicken’s Restaurant at 3562 Wedington Drive. In Bentonville, Walgreens cleared the way for a new pharmacy located at 1311 S. Walton Blvd., directly across from the new Wal-Mart Convenience Store and gas station.

Local experts expect the commercial sector will pick up steam this year following on the heels of robust residential activity over the past two years.

NanoMech in Springdale broke ground Monday (March 31) for its 25,000-square-foot expansion to its manufacturing research site. The company plans to add between 25 and 50 new employees to its payroll once the project is completed by late summer.

Numerous companies have recently filed permits with the state health department for new projects or expansions of existing businesses. These permits typically precede city permits by two or more months. Legacy National Bank filed a permit for a new 6,500-square-foot banking center to be located 4901 W. Pauline Whitaker Parkway, next to Chuy’s Restaurant in Rogers.

CEO Don Gibson said the bank recently acquired the property from Hunt Ventures and has received approval from the Office of the Comptroller of the Currency to relocate a small branch office in Pinnacle Hills, near Cross Church to the new financial center.

“This new banking center will provide a full range of services like our Joyce Street location in Fayetteville and our flagship bank in Springdale. We plan to break ground in mid-April and expect the bank to be completed by September by Milestone Construction,” Gibson said.

Other Benton County projects include:
• Twin Peaks Restaurant, Promenade Boulevard and Bellview Road in Rogers;
• Maria’s Supermercado, 2503 S. Walton Blvd., Bentonville;
• Advance Pierre Foods, 5507 Walsh Lane, Ste. 201. Rogers;
• The Ice House, SE 5th Street and SE E Street in Bentonville; 
• Walmart Neighborhood Market, 935 S. Holly Street, Siloam Springs;
• Walmart Neighborhood Market, 240 Slack Street, Pea Ridge; and
• Thrive Bentonville, multifamily complex, 401 SW.A Street, Bentonville.

Washington County projects include:
• Regal Nails, 4870 Elm Springs Road, Springdale;
• Springdale Parks Improvements, new park near Butterfield Coach Road, Springdale;
• Wood Stone Craft Pizza, 5575 School Ave., Fayetteville'
• Mr. O’s Nutrition Smoothly Bar, 3980 W. Wedington, Suite 11, Fayetteville; and 
• Walmart Fueling Station, Elm Springs Road, Springdale.