CONWAY — Roger Lewis said two things stood out in his annual Faulkner County economic report — the decrease in housing permits in Conway and the increase in the city’s restaurant sales.
“The main one — single-family housing, and even apartments — is way down,” Lewis said.
Lewis, who retired in 2002 as director of institutional research at the University of Central Arkansas in Conway, gives the report a theme each year. This one is Building Conway’s Future. It’s the 21st year he’s presented the findings to the Conway Rotary Club.
“Permits for single-family houses dropped to 119. That’s the lowest in 10 years and maybe even 20 years,” Lewis said. He said 147 permits were issued for single-family homes in 2013. At the time, Lewis said, those were the lowest numbers he’d seen.
“It’s harder to qualify for loans now, after the bubble. People trying to buy a moderately priced house — $150,000 — can’t find one,” Lewis said. “It costs so much for developers to develop a subdivision. Developers just can’t afford to build affordable houses. Houses being built tend to be smaller and toward the patio-type houses because of that. That’s really something that has to be addressed by the city of Conway and developers.”
Longtime Conway developer Hal Crafton knows that better than anyone.
He predicted in 2013, when home construction was down, that the housing situation wouldn’t improve in 2014.
“The math doesn’t work in Conway anymore on new affordable homes,” Crafton said. “Affordable is going to be in existing subdivisions. In a lot of cases, the infrastructure isn’t even there, so it’s got to be run to there.”
To purchase property in the city limits and install infrastructure isn’t possible “unless you’ll be able to spend millions,” he said.
“You’ll never see a new lot come in under $40,000 again. Right now, we’re really closer to lots under $50,000. You can’t build a $150,000 home on a $50,000 lot; it won’t work and appraise. We’ve had several meetings. The city’s aware of it; it’s just not an easy fix,” Crafton said. “We’ve run out of easy areas to build.
“I’m going to predict that in 2015, 70 percent of the homes that are going to be built are going to be over $250,000,” Crafton said.
Also, people’s homes have not appreciated in value. Lewis said he bought his home in 2005, and “it’s not worth much more” in 2015.
Crafton said Lewis is right.
“New homes for $120,000 to $150,000 — there are hardly any out there at all,” Crafton said. “So you would have thought existing homes would have gone up — what Roger said is exactly right. We’ve lost six to 10 years of appreciation. There’s always an exception, but as a whole, you have not made a dime. We’re not used to that here.
“There’s no access inventory. During the bust, there were all these empty homes.”
The oil-and-gas industry has slowed in the past two years, Crafton said, and it’s made a noticeable difference.
“It’s hurt; there were more [employees] here than we thought,” Crafton said. “It’s affected the real estate. If Conway continues to grow, pricing will go back up.”
In January and February, a total of nine single-family housing permits were issued, Crafton said, and none for apartments.
“I think ’14 was our bottom [for depressed home construction], unless something unforseen happens in our economy. .… The average person thinks we were already there, but in real estate, the bottom was probably ’14. I don’t think it’s going to go back real fast. I think it’s going to be a real slow, hopefully a healthy, climb back up,” Crafton said. “If we don’t build homes and we are growing, the tightness of the market will make homes go back up, and I’m ready to see that.”
“Overall construction dollars have been pretty good,” Lewis said. “Building permits — if you put the commercial ones in — that adds up.”
Extensive construction projects are underway or planned in Conway.
Baptist Health Medical Center-Conway, a $60 million project, he said, is under construction on property west of Interstate 40 near exit 129.
Two shopping centers are planned. Lewis Crossing — no relation to Roger Lewis — is a 440,000-square-foot development being built at Dave Ward Drive east of I-40 and Amity Road, where the Lewis Livestock Auction Co. stood for years. The center is scheduled to open sometime this year. The Shoppes at Central Landing, a 760,000-square-foot mixed-use development, will be built on the former Conway airport site. It is scheduled to open in 2016.
Those centers will bring in stores such as Dillard’s, Victoria’s Secret, Academy Sports and Sam’s Club.
In 2014, construction permits totaled $140 million: $105 million was commercial, and $35 million was residential.
In 2013, construction totaled $110 million: $59 million commercial and $51 million residential.
“If you go back to 2003, it was $136 million commercial; $95 million was residential,” Lewis said.
“The demand for housing, I think, is even going to be greater with the hospital being built and Central Landing and Lewis Crossing,” he said.
Conway is the shopping hub for the county as it is. Most of the estimated retail sales in the county — 76 percent — were in Conway. The next largest shopping hub was Greenbrier at 5 percent, according to the report.
“Businesses will be moving in, and they’ll be hiring people and managers and so forth,” Lewis said. “The demand will be there — how will it be met? More apartments, probably.”
Crafton said Conway is apartment-heavy, and he acknowledged that he developed many of the complexes.
“I’m not saying someone won’t blow in here from out of town, but when you see what vacancy rates really are — and when’s the last time some of these apartments have been able to have a rate increase — the market is really kind of saturated,” he said.
Lewis’ report found that the cost of living in Conway is “only 91.9 percent of the U.S. average,” which is lower than Little Rock, Hot Springs and St. Louis.
“The lower cost is particularly pronounced in housing,” with Conway’s housing costs at 79.7 percent of the national housing costs in 2014.
Meanwhile, Conway restaurants are cooking up a storm.
“It’s just the amount of growth sort of staggers me,” Lewis said. “Other areas seem to be flat.”
In 2014, restaurant sales, based on the Conway Advertising and Promotion tax, were $176.2 million, up 12.4 percent from $156.7 million in 2013.
The top 10 restaurants in annual sales, not including alcohol,were as follows:
Chick-fil-A in Conway Commons, $4.4 million;
Chili’s, $4 million;
Cracker Barrel, $3.9 million;
Golden Corral, $3.7 million;
TGI Friday’s, $3.4 million;
McDonald’s on Salem Road, $3.2 million;
McDonald’s on Dave Ward Drive, $3.1 million;
McDonald’s on Oak Street, $2.8 million;
McDonald’s on U.S. 65, $2.8 million (just about $200 less than No. 9); and
MarketPlace Grill, $2.6 million.
“There are two locally owned restaurants that are doing well — Mike’s Place and Stoby’s — and Pasta Grill is doing pretty well, too,” Lewis said.
People who drive in Conway during rush hour probably won’t be surprised at another figure Lewis reported: The number of vehicles registered in Faulkner County has zoomed from 97,425 to 112,128 in 2014, an increase of 15.09 percent.
Lewis said that includes “any motorized vehicles,” including motorcycles.
People driving those vehicles are likely going to and from work.
The unemployment rate in Conway was 5.8 percent in 2014, down from 6.9 percent in 2013. Faulkner County’s unemployment rate was 5.9 percent, compared with the Arkansas rate of 6.4 percent and the national rate of 6.2 percent.
Conway’s 2014 population was estimated at 63,014, with the Faulkner County population at 122,000.
The complete report can be found on Lewis’
website, pulseofconway.com.
The late Thomas Wilson, CEO of what was then First State Bank, compiled the first economic report in 1952.
The inaugural presentation was given first to the Conway Rotary Club, a tradition that has continued, Lewis said. He has help. This year, the report was prepared by Stacey Spinks, a graduate assistant at the University of Central Arkansas. Coordinator for the report was Pat Cantrell, associate professor of economics at UCA.
Senior writer Tammy Keith can be reached at (501) 327-0370 or tkeith@arkansasonline.com.