Building Permits, Housing Sales Increase In Region

FAYETTEVILLE -- Arvest Bank recently released the residential real estate market Skyline Report results for the second half of 2016 in Northwest Arkansas. The report noted an almost equal increase in building permits issued, with a 37-percent increase over the same period in 2015, and new homes being occupied showing a 37.6-percent increase.

Significant absorption of new homes led to the lowest level of remaining months of unbuilt lot inventory, 35.1 months, since the inception of the Skyline Report in 2004.

"Given the increase in building permits we've seen during the past twelve months, it is quite impressive that the absorption of newly constructed homes has kept pace," said Kathy Deck, lead researcher for the Skyline Report at the Center for Business and Economic Research at the Sam M. Walton College of Business, University of Arkansas at Fayetteville. "Overall the residential real estate market is as hot as we've seen it since the recession. Moving forward we will be paying attention to two issues that could slow down the pace of absorption -- the forecasts for slower job growth in the area and the price of lots that are remaining, as this could limit builders' ability to build the price of homes that are selling."

There were 1,561 building permits issued in Benton and Washington counties in the first six months of 2016 and 1,574 new homes sold in the last six months of the year indicating good balance between the number of new homes being constructed and the number of new homes being purchased. In the second half of the year there were 1,638 permits issued, a 37-percent increase from the 1,196 permits issued during the same period of 2015.

The average sale price of homes sold during the period increased 6.7 percent in Washington County, from $189,093 to $201,804. In Benton County, it increased 7.4 percent, from $206,575 to $221,944.

"It is good to see the residential market being so active while also remaining well-balanced in terms of supply," said Deck. "The market was equally hot prior to the recession, but at the end of 2006 there were more than 2,500 complete but unoccupied houses on the market and now there are fewer than 300. We hope that this balance is sustainable moving forward."

The total number of new and existing homes sold in the last half of 2016 was 4,772 -- a 12.1-percent increase from the 4,257 sold in the last half of 2015.

The Arvest Skyline Report is a biannual analysis of the latest commercial, single-family residential and multi-family 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.

General News on 03/22/2017