The number of residential building permits issued in Northwest Arkansas during the second quarter of 2007 decreased by 56 percent from the second quarter 2006, according to the Arvest Bank Skyline Report.
But the number of housing units on the market continue to outpace the number of consumers in the area, as illustrated by the 2,881 completed but unoccupied homes in Benton and Washington counties.
The Arvest Skyline Report is a quarterly 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 the Center for Business and Economic Research in the Sam. M. Walton College of Business at the University of Arkansas.
George Faucette, president of Coldwell Banker Faucette Real Estate, said the slow-down was expected by most in the real estate industry but not the extent seen in the second quarter.
“We saw this coming 18 months ago; the slow-down really began at the end of 2005,” Faucette said. “I expected the slow-down; I did not think it would be this severe.”
Facuette said many Realtors are still as busy as they were during the housing boom but are now working much harder to achieve the same results as before.
Kathy Deck, lead researcher for the Skyline Report at the Center for Business and Economics Research at the Walton School of Business, said the data still indicates strong demand for residential real estate and shows “real improvements in the residential market in Northwest Arkansas.”
The multifamily housing market is also showing the effects of market saturation as vacancy rates continued to increase. The vacancy rates for the second quarter of 2007 increased only 0.5 percent over the rates for the first quarter of 2007, but they still remain well above the 7.5 percent rate that was recorded for the second quarter of 2006.
By Katie Stockstill, ArkansasBusiness.com