story by Kim Souza
ksouza@thecitywire.com
The local construction sector in Benton and Washington counties is building new roads, trail infrastructure and several large commercial projects, but new home starts declined sharply in April.
The four largest cities in the region issued a combined $45.209 million in new commercial and residential building permits last month, down 24.5% from the $59.923 million reported a year ago.
Residential permits for new home starts among the four cities were valued at $34.539 million, down 11.7% from the $39.116 million in the same month last year. During April, the four cities issued a combined 142 permits for new homes. Fayetteville saw a 81% increase in the number of new residential permits at 49. New home starts (29) were off by 58% in Bentonville, compared to a year ago. The cities of Rogers and Springdale each reported steady permit numbers with a year ago.
April Residential Permits (New Construction)
Bentonville: 29 homes at $8.471 million, down 57%
Fayetteville: 49 homes at $12.825 million, up 113%
Rogers: 40 homes at $7.044 million, down 4%
Springdale: 24 homes at $6.199 million, up 5.24%
Brent Hanby, co-owner of Encore Flooring & Building Products in Springdale, said his business is bustling.
“Every homebuilder and remodeler I speak with tell me they are swamped with work for the next 120 days or so. I know the new home inventory is pretty low based on the last numbers I saw,” Hanby said. “I look for this momentum to carry through the back-half of the year.”
Paul Bynum, analyst with MountData.com, reports that there were 393 new homes listed for sale in the local multiple listing service as the end of March. The new home inventory was up from 273 a year ago. Bynum estimated 5.9 months of supply in new inventory at the end of the first quarter. He said that reading is up from 4.5 months a year ago because there are more new homes for sale.
Bynum also noted that a balanced market occurs when there is between five and six month supply of homes. He said the new home market was sound heading into the month April in terms of sales.
“Through the first quarter of this year new construction had a sales volume of $48 Million, up 3% over 2013. Units sold totaled 201, up 6% and the median sale price is $217,044, down 3% from 2013,” Bynum said.
Local builders told The City Wire earlier this year that they expected to keep pace with 2013 numbers. They continue working to get some spec homes finished for showing, because the homes were selling faster than they could finish them. Hanby said labor and ready-to-build-on lots are in shorter supply in the residential sector given there are more builders working this year.
“I am hearing some developers began to plan for new subdivisions in desirable areas because the available lot supply has been absorbed. I continue to be amazed with all the new construction I see out toward Goshen in the Waterford Estates subdivision. It’s been years since this area has been this active,” Hanby said.
Waterford Estates features custom homes beginning at $280,000 built by Riggins Construction. The brick homes range in size from 2,300 square feet to 3,000 square feet with custom details.
COMMERCIAL SECTOR
The local commercial construction sector continues to show signs of new life after several years of relatively slow growth.
Bentonville has three new commercial projects permitted last month valued at $4.201 million. The projects include a new Walgreens drug store on Walton Boulevard, a strip shopping center along South Walton Boulevard and a small industrial office building. Permits issued by Bentonville in April of last year totaled $7.748 million.
Fayetteville reported one new commercial permit in April, a new CVS Drug store under construction at 2402 N. College Ave. This project is valued at $1.461 million. A year ago, the city did not issue commercial permits in April.
Springdale had two new permits for commercial use issued last month. Popeyes Chicken is under construction on West Sunset, near the entrance to Arvest Ball Park. O’Reilly Auto Parts obtained a permit for work valued at $807,905 for a new store at 3049 E. Robinson Ave.
Rogers issued a handful of new commercial permits totaling $3.869 million in April. Permits were down from $9.536 million in the year-ago period. A large industrial warehouse located at 1300 W. Hudson Road was valued at $1.4 million. The Mercy Clinic at 613 N. Second St., has a permit value of $1.34 million. There was also five permits for multifamily housing units to be built at 2007 S. Dixieland Road.
The Health Department recently issued the following permits for new businesses planned in two-county area. These permits precede the city permit step by roughly three months.
Kum & Go Store — Main Street & Broyles in Farmington
Dunkin Donuts — 1805 W. Martin Luther King Boulevard, Fayetteville
Bone Heads Restaurant — 1404 Moberly Lane in Bentonville.
Walmart Neighborhood Market — East Central Avenue in Centerton
Planet Fitness — 216 Westpark Drive, Bentonville
Crossings Nail Salon — 2600 W. Pleasant Crossing in Rogers
SNAP Fitness — 2600 W. Pleasant Crossing in Rogers