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n the first half of 2024, the Northwest Arkansas real estate market saw a surge in home sales and low vacancy rates for both multifamily and commercial properties, according to Arvest Bank's Skyline Reports. This data was presented at a Springdale event attended by over 400 area business leaders to celebrate the 20th anniversary of the Skyline Report.
The Skyline Reports are compiled semiannually by the Center for Business and Economic Research (CBER) at the Sam M. Walton College of Business at the University of Arkansas for commercial, multifamily, and residential real estate in Northwest Arkansas. Arvest Bank has contracted with CBER since 2004 to gather and analyze data on the local area real estate market from various sources including area governments, property managers, visual inspections, and business media. This has resulted in over 12,000 pages of real estate data and analysis since the first Skyline Report was released in the third quarter of 2004, with a total of 152 reports completed.
In the residential sector, 4,799 homes were sold in the first half of this year, representing an 8.5% increase from the 4,422 homes sold in the same period last year. Of these homes sold, a record high of 1,896 were new constructions, accounting for 39.5% of the total homes sold. This is the second-highest percentage for the Skyline Report after the 39.9% in the second half of 2023. The overall absorption rate of 2,497 homes reached a 20-year high, up 29.6% from the first half of 2023.
The average price of homes sold continued to rise in Benton County, increasing by 2.5% to $432,956 in the first half of this year from $422,564 in the same period last year. In Washington County, however, the average price fell by 0.7% to $389,574 from $392,306.
The number of home building permits issued rose to 2,631 in the first half of 2024, marking the third-highest total since the 2,892 permits issued in the first half of 2022. The average permit value was $326,426 in the first half of 2024.
In the multifamily market, the vacancy rate increased to 3.3% from 2.2% last year but remains at a healthy level despite a significant number of new apartment complexes and units entering the market. Average apartment rent increased by 9% to $1,037.57 monthly from $952.17 in the first half of 2023.
Building permits were issued for 12 apartment complexes in the first half of 2024, valued at $362.55 million, up 41% from $256.4 million in the second half of 2023. The apartment complex with the highest permit value was Clear Creek Apartments in Springdale, with a value of $51.17 million.
The overall housing market in Northwest Arkansas for both homes and apartments remains robust with a high percentage of newly constructed homes and multifamily units being built and absorbed. However, affordability of housing remains a major concern due to the significant increase in home prices and apartment lease rates over the past five years.
The Skyline Report on commercial real estate shows a "very healthy market" with a flat overall vacancy rate for all types of commercial space at 6.4% from the past two reports. There was strong leasing activity in the class A submarket as 61,325 square feet of new leasable space entered the market in the first half of 2024.
The vacancy rate for the warehouse submarket rose from 3.6% to 8% as 313,356 square feet of new space entered the market and two large existing spaces became available. Despite this, there is rising demand for additional warehouse space in the region.
Excluding building permits issued for Walmart's new home office, the total value of commercial building permits rose to $406.1 million, a record high for the Skyline Report. This is a testament to the area's growth and intelligent development, which has been supported by Arvest Bank's long-term commitment to provide area leaders with the highest quality real estate data available.
The links for the new Skyline Reports are as follows: residential report, multifamily report, and commercial report.
