story by Kim Souza
ksouza@thecitywire.com
The two building sectors across Northwest Arkansas moved in different directions last month as new residential and new commercial permits issued by the region’s four largest cities totaled $57.693 million, down sharply from the $90.89 million permit value reported a year ago.
The May 2014 value was bolstered by a $43 million multifamily project by Lindsey & Associates in Bentonville as well as a $9 million permit for the Amazeum, the children’s museum in Bentonville.
That slack in commercial construction is being filled by a robust residential building climate. Builders began 137 houses in may in Fayetteville, Bentonville, Springdale and Rogers which issued cumulative new residential permits valued at $34.128 million, up 34% from the $28.4 million reported a year ago.
Bentonville again led the region with the most new permits (43) issued in May. City officials said their office is busier than last year especially with new residential permits which totaled $12.63 million last month, up 14.3% year-over-year.
Fayetteville wasn’t far behind issuing 40 permits for new home construction which had a total value of $10.597 million. Permit values rose 73.7% from $6.098 million a year ago.
In Rogers builders started 28 new homes last month valued at $5.154 million. The values in May were up nearly 10% from a year ago. The Rogers residential market has slowed dramatically since the peak of real estate construction in 2006. That said, local leaders believe the building pace this past year is a sustainable one.
Springdale builders were also busier in May with 28 new starts compared 21 a year ago. While the number of permits rose in Springdale the total permit values declined slightly to $5.746 million in May, thanks to more lower-end homes under construction today.
The demand for new homes remains steady, according to Nicky Dou, a broker with Keller Williams in Bentonville who recently said many spec homes are selling before they are finished.
Paul Bynum, market analyst with MountData.com, reports across the two counties there were 100 new homes sold in May ranging from $125,000 to $799,000. He said more than 500 new homes have been sold this year at a median price of $229,925. Bynum expects to see building continue as there is a 3.2-month supply of new homes on the local market, which is helping to keep prices higher.
Economist Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas, said rising metro area incomes and population numbers are also helping to fuel demand for the local real estate market.
COMMERCIAL SECTOR
The same four cities issued new commercial projects in May worth $23.565 million. While that’s down more than 164% from the $62.488 million reported a year ago, there were some large projects in the works.
A new office and separate retail complex known as the County Club Plaza near the entrance of Pinnacle Country Club in Rogers was permitted by the city last month. The three-story office complex ($7.5 million) has more than 86,000 square feet of Class A space. The retail building ($2.5 million) will be a tenant finish out space located nearby at 5100 Pauline Whitaker Parkway. Also in Rogers there is a new pediatric health clinic ($2.93 million) under construction near Mercy Hospital.
In Bentonville, a large office building ($2.63 million) is under construction on Southwest A Street. Another multi-tenant retail/office space ($647,000) is under construction at 1600 S.E. J. St. A permit for a new airplane hanger was issued with a value of $424,000, and the Solid Rock Baptist Church obtained a building permit valued at $1.316 million.
In Springdale the city issued a permit ($254,688) to Vining Holding to rebuild their offices destroyed by fire. That was the only new commercial permit issued by Springdale last month.
Fayetteville issued two large commercial projects in May. At 2016 W. Martin Luther King Blvd., the Bluetop Liquor store is under construction with a value of $1.103 million. Dr. Josh Roller Weight Loss is building a new office at 1695 E. Rainforest Rd., valued at $4.25 million.