Lafayette Parish homebuilders are feeling the financial pinch of the energy downturn, with sales of new homes from January to May this year falling significantly compared with 2015, a seasoned home seller said Tuesday.
“What we have clearly seen at this point is that demand is down,” Bill Bacque, CEO of Lafayette real estate company Van Eaton & Romero, told members of the Acadian Home Builders Association.
Sales of new homes in Lafayette Parish through the first five months of 2016 are down almost 18.6 percent compared with January through May 2015, from 364 homes sold during the 2016 period versus 447 sold in 2015, according to a report by Van Eaton & Romero using numbers compiled by the Realtor Association of Acadiana.
That’s compared with a modest 1.3 percent fall in the number of existing homes sold through the same period, according to the report.
“New construction has taken the brunt of the decline,” Bacque told about 100 homebuilders, mortgage attorneys and others at a luncheon put on by the builders association. Why the market has hit the new home market much harder than that of existing homes, Bacque said, “I really don’t have a clue.”
Combined, January through May sales of new and existing homes this year have fallen 8 percent compared with 2015, according to the report.
The economic forces keeping fewer people from buying homes come mainly from the fall of oil and gas prices that have forced thousands of people out of work in Acadiana. Although oil is up almost 100 percent since the beginning of 2016 — it sold for between $48 and $49 a barrel Tuesday afternoon — it’s still a long way from the over-$100-a-barrel level it reached in mid-June 2014.
It took awhile for the energy downturn to affect the Lafayette-area real estate market, as the number of homes sold in the first half of 2015 beat sales numbers rung up during the same period in 2014. The numbers started to dip in the latter half of 2015.
Bacque did provide reassuring news Tuesday: The median price for new homes has fallen by less than half a percent, and the median price for existing homes has declined by only 2 percent.
“The values are still holding,” he said.
Another upbeat nugget in the numbers is that new and existing homes priced from $150,000 to just under $300,000 still sell fairly quickly. And homes priced $170,000 to $179,999 spend the least amount of time on the market at an average of 2½ months. According to the report, all homes in the $150,000 to $299,000 average a tad over four months on the market.
Bacque said the problem is that most builders kept constructing homes that sold pretty well in the boom years — those priced $300,000 and above — and not enough of the homes that are priced in the market’s sweet spot.
According to the report, homes selling for $550,000 to $599,999 have been the hardest to sell, sitting on the market for more than three years before selling.