The three largest cities in the Fort Smith metro reported higher than average building permit values in February. Fort Smith, Greenwood and Van Buren had a combined $90.808 million in building permits in February, up 298% from the $22.802 million in February 2021.
The February permit values were also a 187% increase from the $30.554 million value in building permits reported in January. Year-to-date building activity is valued at $121.362 million, a 173% rise from the $44.422 million for the first two months of 2021.
Fort Smith issued 134 permits in February with a value of $36.873 million, an increase of 91.2% from the $28.509 million value of 155 permits issued in January and 213% increase from the $17.42 million value of the 108 permits issued in February 2021. There were 22 permits issued for new residential construction in the month with a combined value of $3.785 million, down 22% from the $4.86 million value of 25 permits issued in January, but up 110% from the $1.8 million combined value of seven new residential construction permits issued in February 2021.
Part of the February gain was a $13.25 million permit for an addition at Mercy Fort Smith at 7301 Rogers Ave. On Feb. 22, Mercy marked the beginning of construction on a $162.5 million expansion of Mercy Hospital that will focus on new emergency room and intensive care unit (ICU) areas, and parking.
VAN BUREN, GREENWOOD PROJECTS
Van Buren, the region’s second largest city, issued 43 permits in February with a value of $35.014 million, a significant increase over the $1.86 million value of 64 permits issued in January and the $5.26 million value of 52 permits issued in February of last year.
The monthly activity included four residential with a value of $636,000, a 61% decrease from the $1.65 million value of the nine residential projects permitted in January and a 78% decrease from the $2.89 million combined value of the residential construction projects permitted in February 2021.
On the commercial side, there were three projects permitted with a combined value of $34.337 million compared. There were no commercial projects in January, and $2.34 million in commercial projects recorded in February 2021. The big push to Van Buren’s high permitted activity in the month came from the first phase of a $100 million Simmons Foods addition to its plant at 2101 Twin Circle in Van Buren, which has a permitted value of $34 million. Company officials said the upgrade will add 100 jobs, bringing total employment at the plant to 700.
Greenwood also had a good month, issuing 11 permits in February with a combined value of $1.286 million. The total was 585% more than the $185,043 value of 12 permits issued in January and 950% higher than the $122,520 value of nine permits issued in February 2021.
INFLATION, INTEREST RATES
Jimmie Deer, director of building services for the City of Fort Smith, said the increased value in building activity over the past several months was due to a combination of increased activity and a higher cost of building due to inflation.
ERC Chairman Rod Coleman agreed with that assessment.
“Twenty-four months ago, it was totally just more building. The last six to 12 months, there has still been a lot of building, but inflation has had a lot to do with it. People are still wanting to buy. They are not concerned so much about how much that 10% to 20% higher price will have on their monthly payments,” Coleman said.
Year-to-date construction in the region is up 105% from the $59.22 million in permitted activity reported in Fort Smith, Van Buren and Greenwood in the first two months of 2020. That pace is likely to change if interest rates rise, Coleman said, noting that a rise to 5% from 3% interest rates will affect residential construction greatly.
“A rise in interest rates affects home construction. No doubt about that,” he said.
The region ended 2021 with $343.289 million in permitted building activity, a 29% increase over the $265.975 million in 2020. The Fort Smith metro has seen continuous growth over the past several years, but no recent year has performed as well in building activity as 2021 with all three of the larger cities in the region seeing an increase in building numbers from 2020.
REGIONAL BUILDING ACTIVITY RECAP
Combined total for the three cities
2021: $343.289 million
2020: $265.975 million
2019: $241.741 million
2018: $231.78 million
2017: $210.844 million
2016: $211.345 million
2015: $218.899 million
2014: $198.983 million
2013: $202.389 million
2012: $154.64 million
2011: $201.079 million