story by Kim Souza
ksouza@thecitywire.com
There was no shortage of new building projects taking shape in May among the region’s four largest cities. Bentonville, Rogers, Springdale and Fayetteville issues new construction — commercial and residential — permits valued at $90.895 million last month. The cumulative permit values rose more than 76% from the year-ago value of $51.637 million.
Nearly three quarter’s of the new projects breaking ground in May were located in Bentonville, thanks to $43.8 million multifamily expansion at Lindsey Management’s Linx at Rainbow Curve complex. Amazeum, the region’s first children’s discovery museum, also added $9.19 million to the Bentonville’s permit values last month.
Commercial projects, including multifamily among the four cities totaled $62.488 million last month. A year ago, the four cities issued a handful of new commercial permits in May with a value of $3.83 million. Med Express and Rogers Dental Clinic are under construction in Bentonville. Legacy National Bank’s new Rogers facility valued at $1.598 million also break ground last month.
In Springdale, Wal-Mart Stores got a permit ($117,690) for a fuel kiosk at the new supercenter at Elm Springs Road and I-49. The city also issue a permit to Memco and M&M Poultry for a new 60,000 square-foot warehouse and distribution center at 3001 E. Huntsville Ave. That project is valued in excess of $5 million. There were no new commercial or multifamily permits issued by the city of Fayetteville in May.
RESIDENTIAL SECTOR SLOWS
The residential building pace slowed again in May compared to the prior-year period as builders started half as many new homes. The four cities issued 104 permits for new single family dwellings valued at $28.397 million in May. This compared to 201 new home permits valued at $47.807 million a year ago.
New construction starts were off sharply in three of the four cites compared to May 2013. Bentonville issued 42 permits, less than half of the 79 new projects reported last year. This comes on the heels of a 58% decrease in April.
The same could be said for Fayetteville whose new permits (22) were valued at $6.446 million, down 41.7% from the same period in 2013. In the month prior, new construction in Fayetteville declined 81%.
Rogers issued just 19 permits last month for new homes. This was down from 49 new starts a year ago. Permit values also declined to $4.7 million, some 49% from the May 2013.
Springdale reported steady home construction with 21 new project permits valued at $6.55 million last month. This compares to 20 permits worth $5.92 million in the year-ago period.
STAYING BUSY
Despite fewer new starts, homebuilders report an active year with sales. Through the first five months of this year there have been 278 new homes sold in the two-county area, that compared to 267 in the same period of 2013, according to Paul Bynum, market analyst with MountData.com
Nicky Dou, a sales broker for three new subdivisions in Benton County, said the new home market is strong. Dou said in the first half of 2013 she had 66 closed sales totaling $18.6 million. In mid-June her sales pending and finalized totaled 69 with $19.5 million in production values.
"Out of my 73 sales so far 41 were new construction and 32 were resales,” Dou said on Wednesday (June 25). "The new homes in good locations are selling before they are even finished. In my experience – some of our subdivision like Hyde Park I can barely list them before they are is an offer. It is a great market for new construction homes and even resale homes if they are in a good location, priced properly and marketed well."
CONSTRUCTION ACTIVITY
Brent Hanby, co-owner of Encore Flooring & Building Products in Springdale, recently told The City Wire his own business is bustling thanks to builders and remodelers. He said every contractor he has spoken to is busy with work throughout the summer.
Builders say there lost some days throughout the long winter and rainy spring, which has had them playing catch-up. They report a tight labor pool for skilled trade because of the active commercial building and infrastructure work underway in the region.
“With demand for construction growing in most states, many firms are slowly rebuilding their depleted payrolls,” said Stephen E. Sandherr, CEO of the Associated General Contractors Association.
Sandherr warned that if the overall economic growth slowed, construction employment could backslide in many states. In Arkansas, the group reports 400 fewer construction jobs in May from the prior month. Year-over-year the state’s construction sector has added 1,500 jobs, a 3.3% gain.
NEW PERMIT VALUES (MAY)
Bentonville $65.988 million, up from $23.521 million
Fayetteville $6.446 million, down $11.184 million
Rogers $6.749 million, down from $9.3 million
Springdale $11.702 million, up from $6.19 million
(Permits include new commercial and residential projects and exclude remodels and alterations and additions.)