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Construction sector steps up pace to start 2013

story by Kim Souza
ksouza@thecitywire.com

Builders started 90 new homes in January in the region’s four largest cities – Fayetteville Springdale, Rogers and Bentonville.

The new residential permit values totaled $20.738 million, up 16.5% from the same period in 2012. Contractors agree the building uptick is an indication 2013 is off to a decent start. The building pace was more active in Springdale and Rogers last month than in Bentonville and Fayetteville.

Rogers issued 33 permits valued at $5.984 million in January. Values rose 20% with eight more properties under construction from the same time last year. About one-third of those properties were issued to ARC/ Walker Brothers of Centerton.

Sean Morris, general contractor for ARC, said his firm is building in the Bellview Subdivision and on 38 lots they picked up late last year in The Groves subdivision near Pleasant Grove Road.

Morris said several permits are for pre-sold homes in The Groves. The price point in this subdivision starts at $199,900 for 2,000 square feet. Larger footprints at 2,300 square feet are also available at a higher cost.

The city of Springdale issued 20 new residential home permits last month with a total value of $4.665 million. Building activity in the city is more active with residential permit values up 48% from a year ago.

There were 15 new home permits issued in Fayetteville compared to 12 a year ago. Permits values rose 58% from January 2012 and were pushed higher from more larger homes in the mix.

In Bentonville, builders cooled their heels last month after a very active 2012. City officials issued 22 permits valued at $6.062 million in January and activity declined by 15.2% from the prior year.

On Tuesday, the National Association of Home Builders warned that the budding housing revival still faced a number of obstacles as 2013 gets under way.

“I talk to many of our builder members who are expressing increasing frustration that they can’t get access to construction loans to develop lots in markets where demand is on the upswing,” said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. “Not only is this keeping workers sidelined, it is frustrating potential home buyers and slowing the recovery.”

With the peak spring home building season just weeks away and inventories of new homes at or near record-lows in many markets, builders should be ramping up to meet demand and create new jobs in markets across the nation.

Across Northwest Arkansas builders say their inventories are low by design mostly as no one wants to come close to the oversupply the region faced in 2007.

“With the severe declines in housing over the past years, many building material manufacturers  such as drywall producers and lumber firms had to close plants and cut back production dramatically,” said NAHB Chief Economist David Crowe. “Now, with the NAHB/First American Improving Markets Index showing that many housing markets are on the mend, the supply chain is starting to strain. Producers are reluctant to expand while credit remains tight and the most recent result has been skyrocketing prices.”

Crowe said builders have to absorb these added costs by cutting back on other areas, including hiring.

Local builders say they work with regular sub-contracting crews and have maintained the about the same number of contractors over the passed two years. They don’t see that changing anytime soon.

COMMERCIAL SECTOR
The four cities together issued a handful of permits for new commercial projects in January. The total value of $5.055 million was 25.8% more than those issued a year ago.

On tap in Springdale is a new Casey’s General Store on South Thompson and Don Tyson Parkway.

In Rogers, a new Casey’s General Store is under way on Second Avenue, and Hunt Ventures is constructing a new office/multi-use building at Promenade Point along Green Acres Way in western Rogers.

In Fayetteville, a new 4900-square-foot office building was approved and permit issued to Milestone Construction. The value of the office complex is $1.4 million.  

Bentonville did not issue any new commercial permits last month.

Building Permit Values
Bentonville
2013: $6.062 million
2012: $8.84 million
-31.42%

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Fayetteville
2013: $5.428 million
2012: $3.553 million
52.7%

Rogers
2013: $9.305 million
2012: $6.345 million
41.92%

Springdale
2013: $4.998 million
2012: $3.59 million
39.22%

(Permit values are for new residential and commercial construction, alterations and remodels are not included.)

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