FAYETTEVILLE, Ark. – Arvest Bank has released its Skyline Report on commercial real estate in Northwest Arkansas for the second half of 2018.
Arvest Bank today released its biannual Skyline Reports on residential real estate in Northwest Arkansas for the first half of 2019.

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Homebuying activity in the region was very strong, posting a 7 percent increase from the first half of 2018. There were 4,747 homes sold, which is the third-highest total since the Skyline Report debuted in 2005.

During the period, the average price for homes sold continued to rise and reached record highs in both Benton and Washington counties. The average sale price in Benton County was $250,608, a 5.3 percent increase from $238,098 in the first half of 2018. The average sale price in Washington County was $235,893, a 0.1 percent increase from $235,618 in the first half of 2018. In the past five years, the average price of homes sold in Benton County has risen 33.2 percent, while the average price in Washington County has risen 28.1 percent. On a cost-per-square foot basis, prices rose 5.2 percent in the two-county area, from $110.85 a year ago to $116.64 this year.

During the first half of this year, 27.3 percent of all houses sold were new construction, the highest percent since Skyline’s inception.
In the short term, the area’s ability to keep pace with the demand evident in these trends is dependent upon enough new homes being built to have ample supply. With 1,946 building permits being issued in the first half of the year – the highest total since 2006 – this short-term need would appear to be accomplished.

However, looking further ahead, there could be a shortage of available lots for future building, as the number of months of inventory of available lots, based on current absorption rates, continues to drop. This inventory peaked at 281 months in the first half of 2011 and has now fallen to 25.6 months.

Mervin Jebaraj, director of the Center for Business and Economic Research (CBER) at the Sam M. Walton College of Business at the University of Arkansas, speaking about the long-term supply of future lots, said, “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. 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. 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.”

 “The real estate market in Northwest Arkansas continues to be strong for developers, sellers and buyers. We are working with our residential developers to provide the financing they need to keep supply levels in line with demand, and our mortgage lenders have been very busy this year helping our customers get the home loans they need.”

Mark Ryan, EVP/loan manager, Arvest Bank of Benton County

The Arvest Skyline Report is a biannual analysis of the latest commercial, single-family residential and multifamily residential property markets in Benton and Washington counties. The report is sponsored by Arvest Bank and conducted by CBER.

In 2004, Arvest Bank contracted with CBER to collect information about the local real estate markets. CBER researchers aggregated and analyzed data from local governments, property managers, visual inspections and the business media to provide a complete picture of the status of property markets in the two counties.

CBER provides excellence in applied economic and business research to federal, state and local government, as well as to businesses currently operating or those that desire to operate in the state of Arkansas. The center further works to improve the economic opportunities of all Arkansans by conducting policy research in the public interest.