It looks like more people are renting these days. I think they should be buying. The rates are low and there are great deals out there.
Vacancy rates for Northwest Arkansas’ multifamily real estate market declined for the second consecutive quarter, according to Tuesday’s Skyline Report.
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.
The multifamily market reached had its highest vacancy rate — 16.1 percent — during the second quarter of 2010, but that number now has dipped to 8.9 percent. While all five major cities in Benton and Washington counties reported substantial declines in vacancy rates, Bentonville has the lowest aggregate rate (6.4 percent) and Springdale the highest (10.0).
Lead researcher Kathy Deck called the report “the most positive development we’ve seen in this market,” but also warned against exuberance.
“While it is good to see multifamily vacancy rates down to near 2006 levels,” Deck said in a prepared statement, “we really must caution builders against adding more units to the market at present.
“A 10 percent vacancy rate is not as comfortable as we would like to see. Five percent is better.”
Tuesday’s report also indicated a general decline in commercial real estate market vacancy rates. The only submarket not to show a decline was the retail market. Vacancy in that segment increased to 14.7 percent from the 14.5 percent rate reported at the end of the fourth quarter of 2010.
In the first half of 2011, more than 790,000 SF of commercial space was absorbed. With more than 113,000 SF added during the same period, the net positive absorption was 677,429 SF.
More than 6.07 million SF of commercial space remains available in Benton and Washington counties at the end of the second quarter of 2011. At the end of the second quarter of 2007, there were more than 4.52 million SF of commercial space available.
Payne Brewer, executive vice president and loan manager at Arvest in Fayetteville said via prepared statement the net positive absorption is “encouraging.”
“We continue to monitor the market for evidence that the commercial economy is improving — albeit slowly — in our communities throughout Northwest Arkansas,” he added.