The number of homes sold and permits issued, overall absorption and average prices rose in northwest Arkansas in the first half of 2019, but the dwindling availability of lots could slow future growth, according to Arvest Bank’s most recent Skyline Report.
A total of 4,747 homes were sold, the third highest total since the inception of the report in 2005. According to the report, released Tuesday, that’s a 7% increase from the first half of 2018.
Absorption also saw a boost, of 14.6% year-over-year, with 1,589 new houses in active subdivisions becoming occupied.
At the same time, the average price for homes continued to rise, reaching record highs in Benton and Washington counties. The average sale prices were $250,608 (up 5.3% year-over-year) and $235,893 (up 0.1%), respectively.
In addition, 27.3% of the houses sold were newly constructed, the highest percentage since 2007.
Building permits set another record, at 1,946, the most issued since 2006. Fayetteville had the most at 338, followed by Bentonville (277), Rogers (222), Centeron (173), Bella Vista (129), Springdale (101) and Prairie Grove (101).
According to the report, the region’s short-term need to keep pace with demand appears to have been met by building new homes to ensure an ample supply.
But there could be a shortage of available lots for future building, the report states. Using the absorption rate from the past 12 months implies that there was a 25.6-month supply of remaining lots in active subdivisions at the end of the first half of 2019. That’s the lowest number of remaining lots since 2007.
“With the area continuing to attract newcomers, and as young people continue entering the homebuying market, the need for new homes is likely to continue for quite some time,” said Mervin Jebaraj, director of the Center for Business & Economic Research at the Sam M. Walton College of Business at the University of Arkansas, in a news release. The center researches and writes the Skyline Report.
“In order to meet this future demand, it is up to our cities to find ways to allow more utilization of current areas for residential development, as many consumers wish to live close to desired amenities,” he continued. “Land for development in less populated areas should not be an issue, but land for development within cities is also needed, along with the water and sewer infrastructure needed to support residential developments.”