Housing Market Tightens, Prices Up in NW Arkansas
August 31, 2021 - Originally posted by arkansasbusiness.com
The average price of a home sold in Benton and Washington counties was $306,236, up 16.2% from the first half of 2020 when the price average was $263,461, according to the latest Skyline Report.
The report, released Tuesday, said average home prices have risen 44.2% in the past five years. The report is sponsored by Arvest Bank, with research conducted by the Center for Business and Economic Research at the University of Arkansas’ Sam M. Walton College of Business.
The report said there were 4,757 residential homes sold in Benton and Washington counties in the first half of 2021, a slight decrease from the 4,826 homes sold in the first half of 2020. Madison County, which was included in the residential report for the first time in the second half of 2020, had 97 homes sold.
As home prices rose, the vacancy rate for multifamily units dropped to 3.4% for the first half of 2021, compared to 5% in the same period of 2020. The average lease price for an apartment unit was $768.48 in 2021, up from $729.42 in the first half of 2020.
“There are several reasons why the northwest Arkansas region is ranked so highly in national surveys of the best places to live and housing affordability is one of the key factors,” Mervin Jebaraj, the director of the CBER, said in a news release. “As a region, we need to address the fact that housing costs are rising faster than incomes. The housing market nationwide is experiencing many of these same factors, but in northwest Arkansas we are seeing these factors reach a very rapid pace.”
The report said the number of new homes completed but unoccupied was 154, the lowest number since 2012. The number of homes listed for sale on MLS was 607, the lowest since 2009.
Housing Permits, Lots
There were 2,704 new housing permits granted in the first half of 2021, the highest number since the first half of 2006. The report estimated that there was a 17.1-month supply of available lots in northwest Arkansas subdivisions, which is the lowest since 2005.
With the additional lots planned for construction, that monthly supply would increase that to 62 months.
“Looking at the pipeline of future housing, it’s good to see a significant increase in building permits issued, but the supply of available lots for new home construction is at its lowest level since we began measuring this in the Skyline Report in 2005,” Jebaraj said. “For those who cannot find a home suitable for their specific situation to buy, they are moving into multifamily developments where vacancy rates are at historically low levels even with so many new units entering the market over the past few years.”
The report said slightly more than $200 million in permits for multifamily construction were issued in the first half of 2021, compared to more than $324 million in the second half of 2020. The four major cities of the area — Fayetteville, Bentonville, Rogers and Springdale — have about 14,600 units either scheduled or under construction.
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