The local homebuilding pace appears to be stabilizing among the majority of the large cities in the two-county area. Commercial projects, including multifamily housing, were showing signs of resurgence through the first half of 2014, but June numbers tracked lower than a year ago.
Combined new permit values in June among Fayetteville, Springdale, Rogers and Bentonville totaled $53.196 million, down 24% from the $70.7 million reported in June of 2013.
Homebuilders initiated 105 new single family homes in June, with a cumulative permit value of $24.505 million. This compared to 118 new starts valued at $26.767 million in June of 2013. The home building pace was on par with the June 2012 activity — 105 permits valued at $24.57 million.
Fred Rausch, CEO of the Rausch Coleman Homes, said his company is on target for a record year in Northwest Arkansas. He said market demand for first-time buyers is strong and he doesn’t expect that to change given the steady growth patterns indicative of the regional economy.
“We are pleased with where the local market is going. Traffic is good at our price points, but there are always challenges to work through,” Rausch said.
He cites tight credit that is keeping some potential buyers at bay, material costs are rising and some labor is harder to come by given that more builders are active in Northwest Arkansas today. Rausch said one other sign that bears watching are the new higher-end homes under construction by contractors from outside the area as local banks are eager to lend again.
June permit values for new single family homes increased in Fayetteville and Bentonville from the year-ago period. Springdale and Rogers issued fewer permits compared to June 2013. Following are the residential permit numbers for the respective cities.
RESIDENTIAL PERMITS (JUNE)
2014: $6.75 million
2013: $3.88 million
2012: $6.1 million
2014: $6.34 million
2013: $7.30 million
2012: $4.1 million
2014: $9.192 million
2013: $10.34 million
2012: $8.94 million
2013: $3.02 million
2012: $3.26 million
The four cities issued permits for new commercial and multi-family projects valued at $31.092 million in June, down 28.8% from the $43.7 million reported in June of 2013.
In Fayetteville the two new permits totaled $4.89 million, $4.4 million of that is for the new Crane Honda Dealership under construction at 1919 Foxglove Drive, near Interstate 49 between the Arkansas 112 and Porter Road exits. Dunkin Donuts is under construction at 1855 Martin Luther King Blvd. in Fayetteville. This project is valued at $446,000. A year ago, the city issued permits valued at $39 million, which included a large $25 million multifamily project.
In Rogers the city approved new commercial permits valued at $5.217 million in June, up from $3 million a year ago. A large retail shell is under construction at 5001 Pauline Whitaker Parkway. It is a retail strip center with a price tag of $1.525 million. A new Kindergrove day care facility is being built at 696 S. 28th St., with a cost of $1.3 million. The Twin Peaks restaurant and sports bar is under construction at 2400 Promenade Boulevard at a recorded cost of $1.527 million. Lastly, the new Heritage Indian Motorcycle dealership was approved at a cost of $440,000 at 1711 Hudson Road.
Bentonville reported commercial permits worth $20.985 million in June, up sharply from the $1.7 million reported a year ago. The Bentonville numbers include six temporary classrooms built for the Bentonville school district at a cost of $109,988; a $6 million multifamily project by Legacy Housing LLC.; a large warehouse at 2608 SE J. Street valued at $12.07 million and an office building at 2600 SE J. Street valued at $2.78 million.
Springdale did not issue new commercial building permits in June.
Health Department permit record indicate several new businesses on tap for Benton County in the coming months. Permits were issued for the Shoe Department at 200 N. Progressive Ave. in Siloam Springs, JJ’s Grill at 12 Cunningham Corner in Bella Vista, The Big Chill bar and grill at 3000 Pinnacle Hills Parkway in Rogers, and Whataburger, the Texas-based burger franchise, is under construction at 4335 S. Pleasant Crossing Blvd. in Rogers.
Health department permits generally precede city building permits by three months and provide a glimpse ahead into future commercial building activity. Following are the commercial permit numbers for the respective cities.
COMMERCIAL PERMITS (JUNE)
2014: $4.89 million
2013: $39 million
2012: $27 million
2014: $5.217 million
2013: $3 million
2014: $20.98 million
2013: $1.7 million
2012: $7.32 million