story by Kim Souza
ksouza@thecitywire.com
Consumers mulling the purchase of new construction homes this year will likely pay a little more than buyers who closed deals in 2014, according to local real estate professionals.
The new home market across Northwest Arkansas posted a strong year in 2014 with more than $250 million in sales and 992 homes sold. Total sales rose 9%, while the unit sales increased 7% from 2013, according to Paul Bynum with MountData.com.
He reported the median sales price for 2014 across the region was $222,498, down about 1% from $222,498 in 2013. Local market data shows that new home prices rose 3.8% in Bentonville to $286,000, while Rogers saw the steepest price increase of 8.6% to $271,400.
Nicky Dou, broker with Keller Williams in Bentonville, said there were a number of new neighborhoods doing well in 2014 and demand is fueling higher prices.
“In Hyde Park (near Cave Springs), a year ago new homes were selling for $110 per square foot and now they are selling for $115 and higher,” Dou said. “The pre-sold homes are $117 per square foot in the main phase of Hyde Park.”
She said the average price for homes in Hyde Park range between $290,000 and $325,000 which is also supported because the subdivision is in the Bentonville School District.
“They are selling like hot cakes. The price increase did not discourage buyers. Most buyers understand that costs go up and that is just the way it is,” Dou said.
She said other new subdivisions also active with buyers could see a slight price increase by $1 to $2 per square-foot this year. In Benton and Washington counties agents said some of the new and more active subdivisions include:
• Rolling Acres: Bentonville - $110 per square foot
• Silo Falls: West Rogers - $119 per square foot
• Liberty Bell: West Rogers - $115 per share foot
• Morningside: Centerton - $91 to $103 per square foot
• Cobblestone Crossing: West Fayetteville - $108 per square foot
• Stonebridge Meadows: East Fayetteville - $110 per square foot
Stephen Brooks, agent with Keller Williams in Fayetteville, said new home costs vary across the region and he expects that trend to continue. With that, he said price comparisons between new and existing homes in the same general neighborhoods also vary. For instance in the popular east Fayetteville subdivision of Stonebridge Meadows, new construction recently sold for about $110 per square foot, while similar homes nearby built around 2005 sold for between $89 and $95 per square foot.
Brooks said in western Rogers the spread between new and existing home prices is wider. In the Liberty Bell and Cross Creek neighborhoods, Brooks said new construction is going for about $115 per square foot while existing houses have seen selling closer to $98 to $102 per square foot.
He said buyer demand in Bentonville has produced one of the closest price ranges he’s seen between new and existing homes. In the Keystone and Highpoint neighborhoods which are near Centerton the new home prices are selling for about $102 per square foot, while similar homes built in just a few years ago are selling between $95 and $99 per square foot.
Prices rise the closer you move toward downtown Bentonville. Totally refurbished homes within eight blocks of the square are garnering nearly $200 per square foot and are selling quickly, according to Lindsey & Associates Vice President Nicki Rogers.
The city not mentioned by the agents was Springdale. Despite being the sixth fastest growing city in the U.S. last year, Springdale has not seen robust growth in its housing market. Builders sold just 52 new homes in Springdale last year, compared to 271 in Bentonville, 208 in Rogers and 181 sold in Fayetteville, according to MountData.com. This lackluster demand has kept the lid on new home pricing as median sales prices were $212,000 in 2014, down 0.2%.
Crye-Leike agent Tami Fagan recently told The City Wire that selling Springdale to buyers has not been easy because of misconceptions. Fagan, who lives in Springdale, and whose daughters graduated from Springdale High School and the University of Arkansas, is bringing school administrators with her to the open houses she holds in the city.
“I think some of the best values to be had are located in Springdale and yet getting people to consider the city has been challenging. Having school personnel at the open houses has helped to educate prospective buyers about all the city has to offer,” Fagan said.
Rausch Coleman Homes based in Fayetteville has tagged Springdale as one of its new market developments in 2015. The low-cost homebuilder’s Eastview subdivision is located near Butterfield Coach Road and has homes priced below $120,000 and between $82 and $90 per square foot.
Philip Taldo, broker with Weichert Realtors, the Griffin Company in Northwest Arkansas and a homebuilder in Springdale, recently told The City Wire that he expects home prices to increase in the coming months led by higher new home prices that will happen in the next two years as builders are forced to develop more lots amid already very slim supplies.
“Lot prices at $40,000 won’t be the case in new developments. I can see $10,000 to $15,000 more added on the land costs of new homes, which is going to raise the price per square foot by some $10. It is going to happen, it’s just a matter of when,” Taldo said.