There are tremendous events that can cause major shifts in the local real estate market — like Hurricane Katrina, which brought a swelling influx of buyers, or the oil bust of the 1980s that sent prices plummeting.
In 2012 no such events occurred. Still, homes purchased in Lafayette Parish in 2012 were up nearly $100 million from 2011, from $427 million to $525 million in 2012. Homebuyers boosted sales by 23 percent. It’s the second best year ever in the history of the parish with new construction booming more than ever.
“Those are the facts,” reports Coldwell Banker Pelican Real Estate COO Steven Hebert. “The numbers are in, and the sales have been closed. The only mystery remaining is why.”
Hebert deduces that a lull between 2007 and 2011 created a “pent-up demand that was unleashed in 2012.” The truth that the economy around here didn’t suffer the incredible lows many saw nationally created a group of buyers with money saved as they waited to see how the economy would fluctuate. When the national economic outlook began to improve and confidence was restored in much of the area’s bread and butter oil and gas industry, homebuyers struck.
“This confidence in the local economy, combined with pent-up demand and incredibly favorable real estate fundamentals, all came together to create the record activity in 2012,” notes Hebert.
While there’s certainly no complaining among Lafayette’s Realtors (or buyers for that matter), the reality is that without a clear cut reason for this influx, it’s hard to tell when and how the pendulum could swing in another direction.
If there is a murky area in the why of the overall numbers, the breakdown showing a 37 percent increase in new construction is crystal clear. Builders are offering great prices and luxe features in homes never before seen.
According to Hebert, large-volume builders offer low prices and prepackaged financing while local builders compete in a “feature war.”
Think outdoor kitchens and lavish bathrooms with walk-in showers at a price point under $250,000.
It’s all added up to a buyers’ market. But that could be changing.
“Looking ahead to 2013, there is already upward pressure on prices, and I would expect a full transition from a buyers’ to a sellers’ market sometime this year,” Hebert reports.