Despite rising interest rates, local market remains record-breaking strong
There are certain factors in the real estate market that have a simple cause and effect. Chief among them is rising interest rates. Yet, even as those interest rates rise (a full percentage point in May) Lafayette Parish's home market remains exceptionally healthy. By mid-December the total dollar volume of home sales in the parish had skyrocketed to $642 million, compared with the previous record of $548 million in 2007. That's a remarkable $100 million more in sales.
As far as Coldwell Banker Pelican Real Estate COO Steven Hebert is concerned, the lion's share of influence on the local market is the oilfield.
"In South Louisiana we can deal with a few other adversities as long as oilfield employment is good and prospects are bright," Hebert says. "A really good job and the anticipation of increased pay and more demand for your skills negates concerns over rising interest rates and rising home prices."
Both numbers in Lafayette Parish are on the rise.
"Up about 6 percent," Hebert says, noting an average sales price of $200,540 for homes in Lafayette Parish in December 2012 compared to today's $212,411.
The other component driving future numbers - inventory. As the parish closed out 2013, inventory remained "moderate," Hebert says, with just more than 400 new homes compared to 344 new homes on the market a year ago.
"I have to credit incredible demand combined with local lending restraint that has kept this number in check. The local home building market is in about the best shape I have ever seen it as we enter the New Year," Hebert says.
Hebert also points out that 2013 was the first year that topped more than $200 million in sales of new homes. And the final numbers hadn't yet been tallied when this story went to press.
"Combine this with the aforementioned moderate inventory and you would have to expect 2014 will be another really good year to be a home builder in Lafayette," Hebert says.