FAYETTEVILLE, AR - The anemic construction sector in Northwest Arkansas got a $41.9 million booster shot last month from Jim Lindsey and Lindsey Management who received permits to build 604 multifamily units in west Fayetteville. The new project, The Links at Fayetteville (Phase 1), ramped up total building permit values among the two-county area to $81.74 million, compared to $55.10 million a year ago.
This large multifamily project is one of 18 underway in the region, according to Jeff Collins, economist with Streetsmart Data Services of Springdale. Four other multifamily projects have been halted due to excess supply and liquidity concerns among some of the developers. Collins said the multifamily market is soft, even in Fayetteville, where the vacancy rates are pushing 10 percent. Scott Rogerson, chief financial officer for Lindsey Management, said the company does see the Fayetteville multifamily market as saturated. He said the complex will take about 18 months to complete and will offer a regulation 9-hole golf course, one of only two such facilities in Fayetteville.
In a recent roundtable discussion with Roby Brock in the "Talk Business Quarterly" magazine, Jim Lindsey said the multifamily business has improved, despite a slower activity in single family housing. He said in the magazine interview that multifamily units were a "parking place" for many would-be homeowners waiting for the housing market to recover. Without the large project, the region's building pace slowed an average of 27 percent in February among five of the largest cities, when compared to a year earlier.
Single family residential construction in the region was down 42 percent in the year-over-year period. Permit values in Rogers among home builders has leveled off to roughly $2.4 million per month after falling more than 72 percent from the building boom in 2006. Bentonville's residential construction was off $4.32 million in February. The city issued 15 new home permits with a value of $3.71 million. The average price of these homes is $247,937. Four of the homes were valued in excess of $325,000, while three of the homes under construction were valued at below $150,000.
Despite a recent resilience seen in the Fayetteville residential market, February permit values tumbled 51 percent. The city issued 20 permits valued at $3.2 million, compared to 42 permits valued at $6.54 million a year earlier. Springdale and Siloam Springs also reported lower residential permit values down 27 percent and 78 percent, respectively.
The slower building trend is just what the doctor ordered, according to local economists who say a reduction in construction is needed to help the regional market return to normalcy after a 5-year bull run. Those same economists have said the local commercial building sector faces similar oversupply issues that now plague the residential market. Among the five cities surveyed, new commercial building permits totaled $20 million last month, compared to $24.18 million in 2007. Fayetteville took the lion's share of that activity as new commercial permit values totaled about $9.4 million, comprised of an office building, church, storage facility and small mixed use retail space.
Springdale issued two commercial permits last month totaling $5.12 million. The city will soon get a new TaMolly's Mexican Restaurant at 1371 S. 48th St. The Texarkana-based chain operates 16 locations in Arkansas, Texas, Louisiana and Oklahoma. Residents in east Springdale will soon have another grocery store. A Wal-Mart Neighborhood Market is under construction at 3553 Robinson Ave., near Butterfield Coach Road. It has a permit value of $3.97 million.
The story was different in Benton County, where building has slowed across all three cities. In Rogers, the city issued seven new commercial building permits valued at $3.54 million, down 79 percent fr
Source: NWAonline.com