Acadiana buyers waiting for lower interest rates could miss out on homes with high-quality amenities.
In Acadiana’s residential real estate market, many buyers are sitting on the fence waiting for lower interest rates, but if they wait too long, they might be pushed off the fence by higher rates. Mortgage rates are destined to come alive and jump forward again. The days of insanely low 4 percent interest rates are just about gone, and right at this moment there are newly constructed properties with maximum amenities, sitting empty.
Buyers, however, are simply not taking advantage of these deals.
A cursory review of local lenders and Realtors paints this picture: “People are actually waiting for interest rates to drop another quarter percent!” Another told me, “Buyers here in Acadiana have, sort of, been sheltered. They have a misguided confidence and are playing the interest rates as if they were on a roulette wheel. You know, ‘come on, 3.75 percent!’”
Meanwhile, builders have had to adjust and cut back on the number of homes they built in 2009, as well as reduce the quality and quantity of special features. Cutbacks began early this year when new construction sales dipped. Builders quickly moved to lower price points and scrapped the higher-end design elements buyers were spoiled into expecting.
Up until now it was expected of new construction to feature deluxe kitchen appliances, including a five- or six-burner gas range, tankless hot water heaters, custom vacuum system, high-end flooring and clay tile roof caps. Buyers willingly paid top dollar for these things, and builders worked hard to out-customize each other. In fact, Lafayette garnered somewhat of a reputation in recent years for quality design and construction.
The trends in new interiors include concrete countertops, though granite is still popular and widely specified. Other trends expected in Acadiana’s moderately priced properties are: triple crown moldings, 10-foot or higher ceilings, separate tiled showers and tiled tub surrounds, outdoor living areas and long-leaf pine flooring.
Upper-end construction here generally means 11-foot or higher ceilings, two dishwashers, three-car garages, complete outdoor kitchens and living areas, walk-in (door-less) natural stone showers and a “man cave” or media room.
Future trends are destined to include more green and eco-friendly features. Builders Brian and Sylvia McLain of McLain Homes, who designed and built this year’s Acadiana Symphony Showcase Home, are raising the bar for green home building here in Acadiana. Their use of sustainable materials and construction methods set the stage. Energy efficient framing and processes, not to mention insulation, lighting and appliances, made this the kind of showcase that other contractors will emulate. It is a trend that is simmering right now, but predictions are that green will be the next hot thing in Lafayette within two years.
Talk with friends who have purchased homes in Austin, Texas, and you’ll hear them voice disappointment about fiberglass showers and no crown molding in some of that city’s high-end properties. Lafayette is not quite there yet, but these reductions may soon become the new norm.
So, the trick right now is to lay claim to these hysterically, er, historically low interest rates while purchasing some of the new construction that does still exist. A home you may have seen two years ago listed in Lafayette for $135 per square foot might enter the market today at $120 per square foot — a bargain no matter the interest rate.
The extended first-time buyer tax credit and the $6,500 “move-up” tax incentive will help sweeten the deal now through April 30, 2010, but that phantom 3.75 percent interest rate will likely never appear. Be delighted — no, ecstatic — with 4 or 5 percent. And know that, in my opinion, your dollar can find real traction in our quality housing market; the deals are out there.
Teresa Hamilton of Van Eaton & Romero has been one of Lafayette’s top agents for more than two decades. This representation is based in whole or in part on data supplied by the Realtor Association of Acadiana Multiple Listing Service. Neither the board nor its MLS guarantees or is in any way responsible for its accuracy.