Arvest Bank today released the residential real estate market Skyline Report results for the second half of 2015 in Northwest Arkansas, which noted that building permits issued and existing houses sold both increased significantly compared with the same period last year.
The area also recorded its lowest level of residential lot supply since 2007, with only 48.3 months’ supply remaining in active subdivisions in Northwest Arkansas.
The Arvest 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 (CBER) in the Sam. M. Walton College of Business at the University of Arkansas.
The full report is available at this link.
“Steady, incremental growth continues to be the story in Northwest Arkansas’ residential real estate,” said Kathy Deck, lead researcher for the Skyline Report at the CBER. “As demand has grown along with an uptick in the economy, developers and contractors are expanding their supply of housing to meet the needs of families moving into and within the two county area.”
There were 1,196 building permits issued in Benton and Washington counties from July 1 through December 31, 2015, a 14.1 percent increase from the 1,048 building permits issued during the same period of 2014 but a 12.0 percent decrease from the 1,359 building permits issued in Benton and Washington counties from January through June in 2015. Benton County accounted for 799 of the residential building permits, while Washington County accounted for 397.
The average value of all building permits in Northwest Arkansas from July through December 2015 was $238,907, down 3.7 percent from the average value of $248,080 reported in the same time period of 2014 and up 1.8 percent from the average value of $234,753 reported from January to June in 2015.
The sold price of existing houses on the market was mixed in Benton and Washington counties compared with the second half of 2014. The average sold price of Benton County homes during the second half of 2015 was $206,575, up 3.1 percent from the average sold price of $200,326 during the first half of 2015. In Washington County, the average price of existing homes sold was $189,093, down 2.9 percent from the average sold price of $194,654 in the first half of 2015.
Home values, as measured by the average cost per SF of existing homes sold during the second half of 2015, increased by 4.3 percent in Benton County to $93.60 from $89.77 during the first half of 2015. In Washington County, the average cost per SF of existing homes sold in the second half of 2015 was $94.75, up 1.7 percent from the average cost per SF of $93.21 reported during the first half of 2015.
In total, 4,257 existing homes were sold in Benton and Washington counties during the last six months of 2015, an increase of 15.3 percent from the 3,691 sold during the same time period of 2014.
“As the number of existing houses sold continues to climb along with the number of building permits, it is apparent that people are in the market for new homes,” said Jeff Resler, Arvest Mortgage Loan Manager for Benton County. “We at Arvest Bank are ready to help them achieve the home of their dreams by either helping them finance a construction loan or by identifying and securing one of the many mortgage programs now available.”
Researchers continue watching the lot inventory and new plats as they are submitted to area planning agencies. A total of 27,293 lots were in the 377 active subdivisions identified in the Skyline Report during the second half of 2015. Of those lots, 7,670 were classified as empty, 140 were classified as starts, 865 were classified as being under construction, 245 were classified as complete but unoccupied and 18,373 were classified as occupied. Of the previously unoccupied houses, 1,144 became occupied during the second half of 2015, up 6.7 percent from the 1,072 in the first half of 2015.
Using the absorption rate from the past 12 months implies that there is a 48.3-month supply of remaining lots in active subdivisions in Northwest Arkansas, the lowest level since 2007. However, an additional 5,113 residential lots have received either preliminary or final approval in the two counties. Adding those proposed lots extends the supply to 76 months.