The four largest Northwest Arkansas cities issued permits for new homes and commercial projects valued at $51.544 million in February, up 11.49% from the $46.231 million reported in the same month last year.
More than two-thirds of the construction permits issued last month were for new residential projects. Bentonville, Fayetteville, Rogers and Springdale issued permits for 139 new homes in the respective cities, up from 130 new home starts in the year-ago periods which were valued at $29.867 million.
Bentonville again led the region with new residential activity with 45 permits last month for a combined value of $13.429 million. While the value was nearly twice that of the cities it fell short of the $14.701 million Bentonville issued in residential permits in the same month last year.
Builders in the Bentonville market say they are working to keep up with demand amid buyers from all income levels who want to live in the Bentonville School District. While square foot pricing is elevated to $200 in the downtown area, lower lot prices can be found in the outlying areas on the south and west ends of town. Rausch Coleman Homes is building more affordable homes on the Centerton line, west of town. Homes ranging from 2,619 to 1,644 square feet are priced between $209,590 and $166,775 according to the builder’s website.
On the higher-end of the price range Van Construction got a permit for a new home in the Creekstone subdivision in North Bentonville on the bluff overlooking Bella Vista. The permit for the new home under construction at 3504 NW Creekstone is valued at $484,684. Van Construction has been building high-end homes in the Creekstone subdivision since 2004.
Nicky Dou, executive broker with Keller Williams in Bentonville, said new home prices are “continuing to rise primarily because there is so much demand and so much going on that the builders are having to pay more for land and building materials and contract labor than in previous years.”
Fayetteville issued 34 new residential permits valued at $7.851 million in February, up from 32 permits worth $6.470 million in the year-ago period. Mark Marquess of Riverwood Homes had several new projects in the Cobblestone Crossing and Crystal Springs subdivisions in Northwest Fayetteville. Home permits values in these two active subdivisions range from $197,800 to $244,000 depending on square footage.
Marquess has also planned a new development in Fayetteville that will have 97 new lots in phase one which is expected to begin later this summer. This new development dubbed Sloanebrooke is located in southwest Fayetteville near Rupple Road. He purchased 56 acres from Bear State Bank last summer for $1.2 million, according to county land records. This 56-acre tract will accommodate the 97 lots in phase one of what Marquess says will eventually become a 500-home development over the next few years.
Homebuilders in Rogers received 32 permits valued at $7.055 million in February. Building activity increased from 26 permits valued at $4.903 million in the year-ago period. Springdale issued 28 new residential permits in February, which was nine more than the same month last year. Springdale’s residential permits were valued at $6.799 million last month, up 79% from the $3.793 million value a year ago as more builders got permits for homes scattered east and west across the city.
Kathy Deck, director for the Center for Business and Economic Research at the University of Arkansas, has said the single family housing market in Northwest Arkansas is proceeding at a sustainable pace given there is no evidence of unsold, finished homes building up in the region.
In her September 2015 analysis of the residential market for the Arvest Skyline Report Deck said researchers were watching the lot inventory and new plats as they come before area planning agencies. Using the absorption rate from the past 12 months implies there was a 53.4 month supply of remaining lots in active subdivisions in Northwest Arkansas, the lowest level since 2008.
The commercial building sector in Benton and Washington counties has been active in recent months. In February the four cities issued commercial construction permits worth $16.68 million, up slightly from the $16.36 million reported a year ago. Multifamily projects in Fayetteville, Rogers and Bentonville contributed $4.66 million to the 2016 commercial totals. In February 2015 there were $1.385 million in new multifamily projects, all of which were in Bentonville.
A large remodel to the Walmart’s Real Estate Company at 702 S.W. Eighth Street in Bentonville was valued at $5.086 million last month. In Rogers, the largest permits were two $1.043 million permits for buildings 4 and 5 of the Watermark at Walnut Creek apartment complex at 600 S. Promenade Blvd., just south of the Scottsdale 6 Shopping Center. The 220-apartment project is being developed by Watermark Residential of Indianapolis.
In Fayetteville the largest commercial permit issued in the city last month was for a $1.1 million renovation of the Butterfield Trail Village retirement community at 1923 E. Joyce Blvd. In Springdale, Bank of the Ozarks received a building permit for a $400,000 for a 3,533 square foot bank to be located at 2773 W. Sunset Ave.
NEW CONSTRUCTION PERMIT VALUES (January through February)
2016: $41.195 million
2015: $40.091 million
2016: $98.539 million
2015: $11.951 million
2016: $27.805 million
2015: $23.782 million
2016: $13.091 million
2015: $11.85 million