By: Aidan Loney

Fayetteville, Ark. (UATV) – The Skyline Report is an economic report for the Northwest Arkansas region published by the Center for Business and Economic Research and is sponsored by Arvest Bank. The report provides residents with commercial and residential real estate analysis from the first and second halves of each year.  

The report showed that commercial vacancy rates reached 7.2% in the first half of this year, the highest since 2021. The biggest driver was warehouse vacancy rates, which rose to 10.4%. Anywhere from 5 to 10% vacancy is generally considered still healthy, which is why experts still view the market in Northwest Arkansas as healthy.

Gene Gates, a loan manager at Arvest Bank, said, “We don’t look at it as concerning. Our numbers still went up, but they’re not at an astronomical high.”

The number of homes sold in Northwest Arkansas regressed by 5.4% from the second half of 2024, but is up 5.2% from this time last year. Home prices are also up 5.2 % in Northwest Arkansas and 7.2% in Washington County. Despite the increases, Fayetteville sits 14% below the national median for home prices at $314k compared to $370k. 

Joe Terrien, the principal broker at Blue Canopy Realty, said, “We won’t see the sky falling (so) we’ll see adjustments, and I think we’re seeing it now too,” regarding housing prices.

The Northwest Arkansas region is one of the fastest growing regions in the country, which includes Fayetteville being ranked the 18th fastest growing city by the US Census Bureau. With the University of Arkansas having record enrollment for 5 consecutive years, there has been an increased demand for housing in Northwest Arkansas. 

With the increasing population, developers fear that the infrastructure in Northwest Arkansas could limit further development if they are not addressed. This led to a 14% increase in construction rates in Northwest Arkansas. 

“But with the growth of the university, we have to continue building places for these people to live,” Gates said.

Terrien believes, “If we do the proper planning, it will make sense. I think we are starting to see those offsets of new construction bringing down rent prices.”