The Acadiana real estate market could be leveling out after months of runaway activity for months.
Home sales dipped in Lafayette Parish and in the region last month, typically a busier month for home buyers, after months of unprecedented growth, according to data from Bill Bacque with Market Scope Consulting. Pending sales also trailed off after months of steady increases.
Activity remains well above previous years as 639 homes were sold in the region, 442 in Lafayette, both well above totals for that month, thanks to historically low mortgage interest rates.
But dips in other markets across the country have led many analysts to question if activity was final cooling off or, a worst-case scenario, the market is in a housing bubble, which would result in home values plunging.
Probably not, Bacque said.
“Is that possible? Yes. Is that probable? No,” Bacque wrote in his monthly report. “It appears April could be the peak of our nearly year-long run in demand.
“…. (T)he demand driven air that has inflated our housing bubble will begin to ease and will lead to a market correction. Whether it is a mild sustainable correction or a chaotic crash depends upon how rapid and significant these influences occur. My 50 years in this business leads me to be more optimistic than pessimistic. Enjoy the market but put some hay in the barn just in case.”
One month of data does not make a local trend, but the national data available shows similar activity, according to Redfin, a national real estate firm. Pendings fell slightly from the previous month, while the asking price fell $2,500 from. New listings are also down 8% from two years ago and 5% from the 2021 high.
“There are some signs that buyers may be pulling back,” said Seattle Redfin real estate agent Alysan Long.
In Acadiana, pending sales dropped 10% both in the region and in Lafayette Parish over April’s total.
The issue? Both locally and nationally, the number of available properties has dwindled. The number of active listings in Acadiana as of May 31 stood at a record-low 887, Bacque noted, with only 453 in Lafayette Parish, also a record.
Nationally, active listings are down 37% from a year ago, Redfin reported. The tighter inventory usually leads to bidding wars among buyers, which has led to homes being sold on average at 2% above the list price.
In Acadiana, homes have sold at 1.6% under the list price, up from over 3% in 2019 and 2018.
“The current market conditions has left many would-be buyers frustrated at the lack of selection of homes,” Bacque wrote.
The lack of inventory has led to a surge in construction in the region, up in Lafayette Parish almost 50% from a year ago. Last month the 92 new builds sold was the lowest since February, but so far 477 sold for the year is outpacing the 325 sold through May a year ago.
Construction costs may cause that number to slow some, said Jordan Daigle with Cottage Developers. Lumber prices have more than doubled in the past year, national reports indicate, and that’s added between upwards of $25,000 to the cost of a newly constructed home.
Daigle’s company has a number of developments that will soon break ground in Lafayette Parish, including a 70-lot project on Moss Street north of Pont Des Mouton Road and a 140-lot project on Decon Road in Youngsville.
“Home construction has continued to set records because the demand has been through the roof,” Daigle said. “However, with construction prices as high as they are, I don’t think it’s sustainable. Builders can pass on some of that depending on the price point, but in the majority of cases they’re eating a portion of that increase.”
Construction has contributed to the new listings to hit the market, which is up 6% in the region and 12.5% in Lafayette Parish, Bacque noted. Those increases, however, have been overwhelmed by the demand.