Acadiana Business

‘Dramatic turnaround' in residential real estate market

by Leslie Turk

There is some serious good news in the numbers for the first half of 2012. In his mid-year market report, Coldwell Banker Pelican Real Estate exec Steven Hebert has a hard time hiding his own surprise at the level of residential real estate activity over the first half of 2012, especially in light of what appears to be a trend developing. "The turnaround in our local real estate market is nothing short of dramatic," Hebert writes in his analysis, noting that this kind of activity has not been seen in Lafayette Parish since the influx of residents after Hurricane Katrina. "I'm not sure anyone thought our market would recover this quickly, but it has."

A quick glance at the accompanying chart helps tell the story: 18 homes sold in River Ranch in the first half of the year at an average price of $565,000, representing $10.1 million in total sales activity. Plaza Village put new families into 13 existing homes during that time at an average price of $103,000, representing $1.3 million in activity.

Total home sales in Lafayette Parish are up 17 percent in the first half of the year, compared with the same period last year, according to figures from the Realtor Association of Acadiana's Multiple Listing Service. But newly constructed homes, mostly in South Lafayette, Broussard and Youngsville, easily outperformed that growth, Hebert notes. "New construction is up a staggering 31 percent in terms of volume, and housing starts in the parish are on pace for 1,200 this year, when 900 has been the norm for the last four years. This represents truly impressive growth driven by confidence in our local economy, hiring in the oilfield and buyers with a high degree of motivation who are entering the market in big numbers," Hebert says.

What's more impressive, Hebert continues, is that the growth is taking place without the help of stimulus programs, bond issues or "fancy programs to get buyers out buying."

What may be most impressive is that this is happening in an environment of tightening loan restrictions. "Interest rates are at record lows but, unlike five or six years ago, you better have some money to put down, a good credit score, solid job - and be able to prove it all," Hebert says.

Hebert's June mid-year report represents the third installment of his monthly Video Market Update. View the full report and his video here.