The residential real estate market in Little Rock strengthened in the first quarter of 2015. Year-to-date home sales increased 8.5 percent and prices increased 2.5 percent from one year ago. Realtors from the area noted that existing homes have been selling fast with multiple offers.
The residential construction market in the Little Rock zone improved in the first quarter. Single-family building permits increased significantly in the majority of the MSAs in the zone. Realtors from the zone reported that it is difficult to get banks to lend for speculative home construction and that the redevelopment of lots for single-family houses is very limited.
The commercial real estate market improved. In all property types, except for office, vacancy rates fell in the first quarter of 2015. Still, the office market is strong (see figure below). The industrial market performed exceptionally well; asking rents increased more than 6 percent and vacancy rates dropped for the first time in a year.
Non-residential market
(Little Rock, Q1-15)
| Apartment | Office | Retail | Industrial | |
| Vacancy Rate (%) | 6.6 | 12.1 | 11.4 | 8.5 |
| Asking Rent (percent change from one year ago) |
1.9 | 0.3 | 0.2 | 6.4 |
Note: Apartment, office, and retail values are from Reis.com. Industrial values are estimates from Cassidy Turley.
Contacts reported that there is speculative office space being developed for the first time in many years and major national retailers and manufacturing firms are opening up stores and facilities in the Little Rock area.
Diana Cooke is a senior research associate with the Federal Reserve Bank of St. Louis. This article appeared in the bank’s Burgundy Book on Little Rock economic conditions for the second quarter of 2015. Reprinted by permission.
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