The recent Skyline Report conducted by the University of Arkansas Center for Business and Economic Research (CBER) found there were 27,850 lots available in the 381 active subdivisions identified by Skyline Report researchers in the first half of 2015.
In 74 out of the 381 active subdivisions, no new construction or progress in existing construction has occurred during the last year, according to the report. That said, the report also found that the number of residential building permits issued in the first half of 2015 rose 14.9% from the same period in 2014 and it was 29.7% higher than in the back half of 2014.
There were 1,359 new residential permits issued in the first half of this year, compared to 1,183 a year ago.
“We’ve seen both demand for new and existing housing increase in Northwest Arkansas,” said Kathy Deck, lead researcher for the Skyline Report and CBER director. “The increase in the number of building permits is warranted given the type of demand we have for housing right now.”
She said Benton County accounted for 845 of the residential building permits, while Washington County accounted for 514 in the first half of this year.
Deck also reports that the sold price of existing houses on the market were mixed in Benton and Washington counties compared with the second half of 2014. The average sold price of Benton County homes during the first half of 2015 was $200,326, down 1.5% from the average sold price of $203,419 during the second half of 2014. In Washington County, the average price of existing homes sold was $194,654, up 8.9% from the average sold price of $178,774 in the second half of 2014.
Home values, as measured by the average cost per square foot of existing homes sold during the first half of 2015, increased by 1.3% in Benton County to $89.77 from $88.61 during the second half of 2014. In Washington County, the average cost per square foot of existing homes sold in the first half of 2015 was $93.21, up 4.4% from the average cost per square foot of $89.30 reported during the second half of 2014.
Johneese Adams, senior vice president and mortgage loan manager for Arvest Bank in Fayetteville, said that although the overall value of building permits were lower, the increases in price per square foot suggests that builders and buyers are focusing on smaller sized homes that reflect a greater value for the cost.
“Slightly smaller homes with the same types of amenities seen in larger homes may drive down the average value of the building permit but it reflects the added value that people are looking for while shopping for a home now,” Adams said.
Deck said researchers are watching the lot inventory and new plats as they come before area planning agencies. A total of 27,850 lots were in the 381 active subdivisions identified during the first half of 2015. Of those lots, 8,324 were classified as empty, 185 were classified as starts, 672 were classified as being under construction, 261 were classified as complete but unoccupied and 18,409 were classified as occupied. Of the previously unoccupied houses, 1,072 became occupied during the first half of 2015, up 2.3% from the 1,048 in the second half of 2014.
Using the absorption rate from the past 12 months implies that there is a 53.4 month supply of remaining lots in active subdivisions in Northwest Arkansas, the lowest level since 2008.
“We are not seeing as many subdivisions being platted as we did in the boom,” Deck said. “Those that are being platted are being developed right away, so they don’t linger on the market as empty lots. I think that continued practice will keep the residential market from overheating, even as activity is quite brisk.”