Skyline Report Shows Balance in Residential Construction, Sales

The new Arvest Skyline Report reflects a balance in residential building and selling in Northwest Arkansas.

Kathy Deck, lead researcher for the report and director of the Center for Business and Economic research at the University of Arkansas Walton College of Business, said the information “shows us that we are sustaining reasonable growth.”

During the second half of 2013, more new homes were occupied and more existing houses were sold than in the first half of the year, according to the report, released Tuesday.

A total of 1,279 new houses in active subdivisions became occupied between July 1 and Dec. 31, 2013, up 60.7 percent from the 796 new houses that became occupied during the first half of the year.

 “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,” Deck said. “We are seeing the market move forward without undue concern with oversupply that we have seen in the past.”

Residential building permits totaled 1,094, up 11.4 percent from the same period in 2012, but down 4.8 percent from January to June 2013. Benton County accounted for 725 of the residential building permits, while Washington County accounted for 369, according to the report.

Sales of existing houses on the market were up 14.3 percent from the previous year, reaching about 3,407 in Benton and Washington counties, according to the report.

Values and Prices

The average value of all building permits in Northwest Arkansas was $244,575 in the last half of 2013, up 3.3 percent from 2012 and up 4.7 percent from the first half of the year.

Benton County existing homes ran at an average price of $183,983, down 0.8 percent from the first half of 2013. Washington County existing homes ran at an average price of $186,493, up 7.2 percent, according to the report.

Home values, measured by the average cost per SF of existing homes sold, decreased 0.2 percent in Benton County to $82.29, from $82.43 during the first half.

A slight decrease in housing prices does not necessarily mean trouble, said Johneese Adams, senior vice president and mortgage loan manager for Arvest Bank in Fayetteville.

“We are experiencing a recovering housing market in Northwest Arkansas. Small fluctuations of less than 1 or 2 percent are to be expected at almost any time during the year and especially during the winter months. It just gives the market a chance to collect its breath, so to speak,” Adams said.

In Washington County, home values increased 4.7 percent from the first half of 2013, reaching $87.87 per SF, according to the report.

Subdivision Occupancy

More than a third of the lots in the 393 subdivisions identified as active in Washington and Benton counties by Skyline Report were considered empty in the second half of 2013.

The report shows 28,336 lots in active subdivisions. Of these lots, 10,162 were classified as empty, 216 were classified as starts, 727 were classified as being under construction and 193 were classified as complete but unoccupied.

The report shows 17,038 were classified as occupied during the second half of 2013.

In 102 of the 393 active subdivisions, no new or ongoing construction has occurred during the last year, according to the report.

The Skyline Report is a biannual analysis of the latest commercial, single-family residential and multifamily residential property markets in Benton and Washington counties. The report is sponsored by Arvest Bank and conducted by the Center for Business and Economic Research in the Sam. M. Walton College of Business at the University of Arkansas in Fayetteville.