Skyline Report: Northwest Arkansas Housing Market On The Rebound

Analysts are seeing positive signs for the residential real estate market in Benton and Washington counties.

Building permits issued for the final six months of 2012 represented a 53 percent increase from that same period in 2011, according to the Skyline Report, released by Arvest Bank and the Center for Business and Economic Research at the University of Arkansas' Walton College of Business.

Total permits totaled 980, following just 642 for the final six months of 2011.

"The northwest Arkansas residential real estate market continued to post positive signs in the last six months of 2012, building on the gains made in the first six months of the year," Kathy Deck, director of Walton College’s Center for Business and Economic Research, said in the report. "It is nowhere near where it was at the peak of the boom, but it is rising from what we can consider the bottom of the market."

Benton County accounted for 641 of the residential permits issued in the final half of last year. Average value of the permits was also on the rise, reaching $236,731. That's 10 percent higher than the same period in 2011.

Existing home sales also saw an increase in average price. Homes sold in the fourth quarter averaged $186,963 in Benton County and $161,150 in Washington County. Those totals represent an 8.1 percent increase in Washington County and 7.5 percent increase in Benton County.

Price per square foot improved 12.1 percent in Benton County ($80.56) and 12.6 percent in Washington County (84.12).

Northwest Arkansas could soon be a "seller's market," according to Todd White, senior vice president and loan production manager at Arvest Mortgage Co.

"It is obvious from this report that after several years of the market remaining relatively stable in terms of home prices and values, we are beginning to see a faster pace of changing dynamics," White said. "Prices are going up, future inventory of new homes is set to increase and there is very little current inventory of available homes.

"The one thing that has remained the same is that interest rates are still very low, which should lead more consumers to consider buying soon before prices climb even more."

Other highlights in the Skyline Report:

  • A total of 28,464 lots were in the 393 active subdivisions identified by Skyline Report researchers in the second half of 2012.
  • In 165 of the 393 active subdivisions, no new construction or progress in existing construction has occurred during the last four quarters.
  • During the second half of 2012, 777 new houses in active subdivisions became occupied, up 70.4 percent from 456 in the first half of 2012.
  • Using the absorption rate from the past twelve months implies that there was a 121.5 month supply of remaining lots in active subdivisions in northwest Arkansas in the second half of 2012.
  • An additional 3,279 residential lots have received preliminary approval in northwest Arkansas. Adding these proposed lots to those in active subdivisions yields 153.4 months of inventory in the second half of 2012.
  • According to the Assessors’ databases, 63.3 percent of houses in Benton County and 64.9 percent of houses in Washington County were owner-occupied.
  • From July 1 to Dec. 31, there were 2,982 houses sold in Benton and Washington counties. This is an increase of 0.5 percent from the 2,967 sold in the previous year.
  • The Bentonville School District accounted for 30.6 percent of the houses sold in the region, while the Rogers School District accounted for 19.1 percent. 
  • There were 3,144 houses listed for sale in the MLS database as of January 2, 2013 at an average list price of $251,918.