Posted 5/20/2009 10:50 am
Updated 12 months ago
The slowdown in new home activity in northwest Arkansas continued through the first quarter of 2009, impacting the number of building permits issued, housing starts, the number of homes under construction and the number of new homes that became occupied.
Data from the first-quarter residential Skyline Report, commissioned by Arvest Bank Group Inc. and compiled by the Center for Business & Economic Research in the Walton College of Business at the University of Arkansas, shows that 185 building permits were issued in the first quarter, a 48 percent decline from the same quarter a year ago, when there were 356 permits issued.
Building permits declined by 88 percent from the peak levels of 2006, when 1,562 permits were issued in the first quarter.
There were 67 housing starts in the first quarter of 2009, compared with 138 in the first quarter of last year, a 51 percent decline.
The number of new homes under construction fell to 355, a 45 percent decline from the 651 in the first quarter of 2008, and an 83 percent decline from the first quarter of 2006 when 2,079 homes were under construction.
The number of new homes being occupied fell to 277, a 66 percent drop from the 809 homes that became occupied in the first quarter of 2008.
Kathy Deck, director of CBER, said home construction has declined dramatically since 2006.
"I'm sure that's not news to anyone in the construction or related fields," she said. "But to have only 185 building permits issued in an entire quarter and only 355 homes under construction in the entire area would have been unthinkable a few years ago."
Deck said her main concern is on the demand side.
"With prices falling back to 2004 levels, we really need sales to pick up within the next quarter or two to believe that home prices will not continue to adjust downward," she said. "And while I have no way of knowing if that will happen, I do know that it is a good time to buy a house for someone with the resources, credit and employment stability."
In the first quarter of 2009, the average sales price of existing houses fell from first quarter 2008 levels by 19.5 percent in Benton County and 12.8 percent in Washington County.
The average price per square foot of homes sold in Benton County in the first quarter of 2009 is approximately $76. In Washington County, the average price per square foot is $86.