The local residential building sector continues its steady trek forward in March with the region’s four largest cities reporting new permits valued at $35.795 million, a 22.7% increase from March 2013.
Fayetteville, Springdale, Rogers and Bentonville cumulatively issued 139 permits for new homes last month. That was 28% more home starts than in the same period of 2013. The biggest year-over-year gains were in Springdale. The city issued 29 new home permits valued at $6.73 million, compared to 8 permits worth $2.5 million a year ago.
Bentonville and Fayetteville builders were also busier with $10.36 million and $10.51 million, respectively, in residential permit values last month. Permit values rose 21% and 6.3%, respectively.
Rogers issued 40 permits last month for new homes, which was three less than a year ago. Permits values dipped slightly to $8.16 million from $8.21 million in March 2013.
Builders surveyed by The City Wire in recent months expect steady business this year and several report homes selling so quickly they can’t keep inventory to show potential buyers.
The recent Skyline Report indicated a stable residential market, healthy in terms of the number of homes available and the number of perspective buyers. The report results for the second half of 2013 in Northwest Arkansas noted that the number of new houses that became occupied jumped by 60.7% over the number occupied in 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,” said Kathy Deck, lead researcher for the Skyline Report at the Center for Business and Economic Research at the University of Arkansas. “We are seeing the market move forward without undue concern with oversupply that we have seen in the past.”
Tom Reed, analyst and partner in Reed and Associates, said the new home market has been vibrant for two years and there are some new residential developments and later stage developments on tap as many of the lots in the more desirable areas have been absorbed.
Reed agreed there are more builders active in the local market today, and some are those who took time off amid the downturn and a few others have come from outside the immediate area. He cautioned that builders and lenders need to restrain themselves as the economy continues to improve, so that supply does not outpace demand. For now, he said the market is balanced.
The local construction employment numbers have grown by 400 workers since March 2013, according to the Associated General Contractors of America Association.
“Much of the country experienced relatively robust growth in construction employment during the past year,” said Ken Simonson, the association's chief economist. “But the fact construction employment remains below prior peak levels in most areas shows just how hard hit the industry was during the downturn and how vulnerable it is to disruptions, such as a potential lapse in federal highway funding.”
The four Northwest Arkansas cities issued new commercial permits totaling $14.71 million, up 32% from a year ago.
In Bentonville, the city granted permits to Big O Tire and a $3.2 million office technology building for an undisclosed business near the David Glass Technology Center for Wal-Mart Stores.
Rogers issued permits for a new Designer Shoe Warehouse at 2203 Promenade along with retail space for the GAP next door and three additions to medical offices near Mercy Hospital. Those permits totaled $2.254 million, up 16% from a year ago.
There were no sizable commercial permits for Fayetteville last month, but Springdale was active with the NanoMech announcement valued at $1.83 million (initial permit.) Har-Ber High School is getting a new football stadium, with that permit was valued at $1.43 million. A new O’Reilly’s Automotive is slated for 3043 Robinson, according to a permit valued at about $808,000.