FAYETTEVILLE, Ark. — Arvest Bank recently released its Skyline Report on residential and multifamily real estate in Northwest Arkansas (NWA).
The report is a biannual analysis of the latest commercial, single-family residential and multifamily residential property markets in Benton and Washington counties.
According to the report, the number of homes sold in NWA decreased by 20.8% compared to the second half of 2021.
Meanwhile, for the first time in several years, home prices leveled out in NWA and even declined slightly in Benton County.
In the multifamily market, the overall vacancy rate in the region also fell from 2.3% to 1.6%. The decline was the result of Fayetteville's vacancy rate falling.
This is because Fayetteville represents nearly half of all multifamily units in the region. All other cities experienced the following slight increases in vacancy rates as eight new complexes entered the market:
- Bentonville at 2.3%, up from 1.4% in the first half of 2022
- Rogers at 2.4%, up from 0.8%
- Springdale at 1.5%, up from 1.2%
- Siloam Springs, at 5.0%, up from 0.6%
Mervin Jebaraj, director of the Center for Business and Economic Research (CBER) at the UA Sam M. Walton College of Business indicated that the changing marketplace with fewer sales, more homes for sale and prices stabilizing could benefit the region, at least in the short-term.
“We have been saying for some time that home prices in Northwest Arkansas have needed to stabilize in order for the region to continue to be an attractive and affordable place to call home,” Jebaraj said. “I believe that the leveling of price increases are an opportunity for the market to potentially recalibrate at a more sustainable pace."
According to Jebaraj, it would likely be beneficial long-term if more developers focused on building in the more affordable price ranges, which would mean further downward motion on average home prices.
In the second half of 2022, there were 122 multifamily building permits issued for 23 separate complexes. The total value of the building permits issued in the period was $333.1 million, down slightly from the $371.8 million in permits issued in the first half of the year. According to Arvest Bank, this is the fifth-highest total for multifamily building permits since the inception of the Skyline report.
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