Gauging the local housing market In Lafayette, real estate and our local economy have been healthy for more than a decade, and hopefully we’ve been watching and learning from the exceptional developments and neighborhoods in our area in order to understand how this is driving our overall success.
Clearly, there is a concentration of smart and successful people in this market and certainly no lack of ambitious developers possessing an entrepreneurial streak.
Some of you may not remember how River Ranch blew the bell curve on pricing. Think of how often you have heard people say, “I wish I had bought early on in River Ranch,” or “I wish I had not sold my property in River Ranch.” River Ranch continues to lead the market on price per square foot, and that doesn’t seem to be changing any time soon.
Ten years ago appraisers told the developers of River Ranch that Lafayette had never sold a home for more than $100 a square foot, warning them they’d have a hard time appraising any homes over that amount. The first several homes in River Ranch ranged in price from the $120s to the $130s per square foot; now those same homes are selling in the range of $190 to as high as $300 per square foot. Yes, you read that right, and it’s not just new construction. Truly, it’s blowing just about everybody’s mind, especially those naysayer appraisers. And it’s not just River Ranch, as prices are appreciating in a number of areas in Lafayette. Other established neighborhoods such as Greenbriar, Bendel Gardens and Fernewood have seen substantial growth in values and demand — showing time and again that they have staying power. Smart investors/buyers understand that in the event the market softens, there are several areas that are more likely to hold their values.
But it is not just about price per square foot when deciding on this investment. Does the home fit you and your family’s needs and lifestyle? Is the location right? And, most important, can you afford it? If you can answer yes to those three questions, go for it.
There is no doubt smart money comes to Lafayette; we have an abundance of successful, visionary people looking to invest. The question is once you get it, where do you invest it? Let’s consider the recent market trend. For the first four months of 2008, sales for new construction are down approximately 24 percent, and resales are down about 12 percent compared to the same period last year. So looking at these numbers and what the nation is going through, the market is a little softer than years past — creating what some would call a buyer’s market. That can mean a couple of different things to a buyer. Sure, there are more listings on the market, but what’s the long-term value of the property? And although there are fewer closed sales in early 2008 than during the comparable period last year, buyers are still making offers — granted some at slightly lower numbers than sellers would like to see but still others are at asking price — and properties are going under contract and closing.
Recently, I have been around the market a bit more than usual, not just studying comparables but physically walking and driving through developments and homes and studying prices. There are a few key things that I keep in mind. This market is still fundamentally controlled by the underlying value created by the quality of the developments and construction, along with the high percentage of equity and financial stability of the owners. If you are looking at real estate in Lafayette, where you feel like — as a buyer — you are in the driver’s seat, there is a good chance that you are previewing a property owned by a short-term player. Short-term players, who buy on speculation in a growing market, are not necessarily invested appropriately in solid long-term value. So you may be getting a good deal, but you may also simply be paying what the property is worth, even in a recovered market.
Our local and national economic environments have their own personalities. Those of us who have been here over the long term have a clear understanding of the draw of a traditional neighborhood developments like River Ranch and the importance of quality over the long run, irrespective of the gyrations of the real estate market.
In Lafayette, we have been blessed with an ever-diversifying economy that today is very strong. What’s more, Lafayette is a great community to call home. If you have a long-term interest in home ownership, I suggest you take a deeper look at investing today and get the knowledge you need to understand your investment. Consider consulting with a real estate professional that has the experience and knowledge of our local market.
Please take time to understand your investment — not only the home but the neighborhood, its financial strength and its commitment to our community.
An Abbeville native, Charlie Baudoin lives in Lafayette and is a Realtor with Van Eaton & Romero. He has 12 years of experience in residential real estate, having been a top listing or selling agent in Acadiana for the past five years.