Northwest Arkansas building permits taper in March, flat for the quarter

New construction permit values for the region’s four largest cities were flat in the first quarter compared to a year ago. Issued permits from January through March totaled a combined $131.53 million for Bentonville Fayetteville, Rogers and Springdale, up slightly compared to $131.38 million a year ago.

The construction pace was also flat in March after values trended downward in February following a robust start to 2015 the prior month. Following is the breakdown on first quarter permit values for the cities.
• January: $50.723 million, up 10% 
• February: $41.8 million, up 27%
• March: $39.01 million, up 0.39%

Residential was the biggest part of the overall Northwest Arkansas market in March with   141 new home permits valued at $33.619 million. Even so, this segment was down from the 139 permits issued a year ago worth $35.795 million.

In the first quarter, homebuilders stayed busy with permit values totaling $85.725 million which were 65% of the total new construction permits issued in the four cities. The homebuilding pace across the region is steady with a year ago when permit values were$85.815 million.

Bentonville again led the pack with 51 new home starts in March valued at $15.95 million, compared to $10.36 million a year ago. For the full quarter, builders got new permits to start 127 new Bentonville homes with a total value of $38.75 million. Residential activity in Bentonville is up 20% from the $32.08 million in permits issued in the same quarter of 2014.

Fayetteville, the largest city of the four, showed a weaker building pace in March with just 29 new permits which were worth $5.73 million. March permit values were down 43% from a year ago. For the full quarter the city issued permits for 79 new homes for a total value of $16.3 million. Residential permit values across the city are down from $21.35 million reported a year ago.

Builders in Rogers had an active month in March with 44 new home starts and combined permit values of $7.423 million, up from 40 permits worth $8.1 million a year ago. The lower values are a result of more lower priced homes under construction compared to a year ago. 

In the first quarter, Rogers issued 109 new permits for new homes with a total value of $18.64 million, up from 79 new starts worth $14.37 million in the same quarter of last year.

Builders across Springdale were issued 17 new permits for home starts in March. Those  permits were valued at $4.498 million, down from the 29 permits worth $6.73 million issued in the year-ago period. For the first quarter Springdale issued 47 new home permits valued at $12.013 million. The construction pace in the city is down from a year ago when there were 74 new home starts with permits valued at $18.03 million. 

STEADY COMMERCIAL
While residential building is the lion’s share of the market, commercial activity has remained steady in recent months.

In the first quarter the four cities issued new commercial permits valued at $45.825 million, inching up from $45.565 million in the year-ago period. There have been several commercial projects underway in the recent quarter.

In January the largest permits was the $7.251 million for the Benton County Sunshine School in Bentonville. In Rogers, JoAnn Fabrics, Med Express and Aspen Dental had permits totaling nearly $3 million. Springdale has more than $2 million in permits for Springdale Public School construction, and Cassady Clinic. 

Commercial activity ticked higher in February with permit values of $11.41 million, led by citywide projects in Springdale, a new branch for Today’s Bank, a $4.54 million office complex on 48th Street and a new manufacturing site for Stabil Loc.

Last month the local commercial permits totaled just $5.183 million, down slightly from $5.808 million a year ago. 

Also on tap in the region is Freddy’s Frozen Custard and Steakburgers in west Fayetteville, a new Burlington Coat Factory in Rogers and Uncle Maddios Pizza in Rogers.

CONSTRUCTION JOBS
Construction employment across the nation was good in the first quarter expanding in 249 metro areas including Northwest Arkansas. The local region added 300 new construction jobs in March compared to March 2014. There were 8,600 construction-related jobs in the local metro area at the end of the first quarter, according to the U.S. Bureau of Labor Statistics.

Employment in the sector reached a high of 12,900 in June 2006 in the height of the building boom in Northwest Arkansas. That boom went bust, and less than three years later sector employment was below 9,000.

Veteran builders across the region say they are not seeing labor shortages as they tend to employ the same sub-contractors. They note that building activity has been sluggish because the snowy start to March and a wet April, but they expect steady work throughout the spring and summer months as demand for new homes continues, particularly in Bentonville and areas of Fayetteville.