In northwest Arkansas, building permits have increased, the supply of remaining lots continued to fall and the number of complete but unoccupied houses remains low, according to Arvest Bank's residential real estate market Skyline Report for the first half of 2016.
Kathy Deck of the Center for Business and Economic Research at the Sam M. Walton College of Business at the University of Arkansas, is the lead researcher of the report, which is sponsored by Arvest. She called demand for new housing in the region "robust."
"In a fast-growing economy like the one we are experiencing, it is not unusual to see supply outstrip demand slightly," she said. "At this point, inventories remain low, so there is some room for an increase. Prices have been increasing over the past few years, so the increased pace of building may help keep home prices affordable as the selection of available properties increases."
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There were 1,561 building permits issued in Benton and Washington counties from Jan. 1 through June 30, a 15 percent increase from the same period of 2015 and a 30 percent increase compared to July to December 2015, the report said.
The average value of building permits in northwest Arkansas from January to June was $226,466, down 3 percent from the average value reported in the same time period of 2015 and down 5 percent from the average value reported from July to December 2015.
In total, 4,373 existing homes were sold in Benton and Washington counties during the first six months of 2016, an increase of 16 percent from the same time period of 2015.
The average sales price of Benton County homes during the first half of 2016 was $218,482, up nearly 6 percent from the second half of 2015. In Washington County, the average price of existing homes was up 7 percent from the average sales price in the second half of 2015.
"With economic growth and low unemployment in northwest Arkansas, families are needing homes," said Dax Moreton, senior vice president and loan manager for Arvest Bank in Prairie Grove.
Using the absorption rate from the past 12 months implies that there is a 46.1-month supply of remaining lots in active subdivisions in the region, the lowest level since 2007. But an additional 5,539 residential lots have received either preliminary or final approval in the two counties. Adding those proposed lots extends the supply to 75.1 months, the report said.