Tiffany Saltzman was thinking probably the way you and most people are thinking when she decided to put her house on the market during the coronavirus pandemic.
What can it hurt?
If you think people are keeping money in their pockets and are nervous about putting their homes on the market, well, yes and no. Home sales and inventory in Lafayette Parish and in Acadiana have dropped significantly compared to this time last year.
But know this before you jump to conclusions: the market is kind of hot right now.
Saltzman put her 1,100-square-foot home up for sale the week she lost her job as a contract fitness instructor. It was her first home, her “single lady home” after years of renting. Recently engaged, she had planned to put it on the market before losing her job and decided to do it anyway on March 20 “to let it sit until this whole thing blows over.”
That changed when a potential buyer asked to see the house that day.
“My realtor (Rachel North), who is my best friend, said, ‘You see we already have a showing,’ ” Salztman said. “I made sure I had hand sanitizer and gloves so that they could use them and look around. They ended up putting an offer in on the same day.
“I asked Rachel, ‘What do we do now? I have to move.’”
Her case isn’t really an anomaly. The shutdowns and job losses from COVID-19 has dropped the number of houses on the market and the number of showings. In March, a time when home sales often ramp up, inventory dropped in Lafayette Parish from 475 a year ago to 399 last month and outside Lafayette Parish from 281 last year to 213 last month, according to data from Bill Bacque of Market Scope Consulting.
Pending sales were also down last month. The total dropped from 337 last year to 325 last month in Lafayette Parish and from 203 last year to 193 last month outside of Lafayette Parish.
People are still buying homes, said Jim Keaty, owner of Keaty Real Estate and president of the Realtors Association of Acadiana. But now COVID-19 has essentially removed the more casual buyers and sellers.
“The buyers out there have to move,” he said. “They’re not looking for fun. If they find the right house, they’re not going to look at 10 houses. The market — if you take that into account, nothing has really changed. It’s not a bad time to sell or a bad time to buy.”
Todd Savoy, who remodels homes for a living, was surprised at how soon he sold a house that he rebuilt after it had a fire over the carport area. He spent three months repairing the 2,100-square-foot house near Camellia Boulevard and getting it up to code before putting on the market.
And here's how much confidence he had in the COVID-19 market: he dropped the price $2,000 below the appraised value.
He sold it in two days for the list price.
“I wanted to get rid of it because of the economy,” said Savoy, whose company, Remodeling by Todd, flips one or two houses a year. “I thought it would take a little while to sell, just like everything else. (On a) Monday we put it up. We had two showings (that day), and we had an offer that night.
“This was the fastest (I sold a house). No doubt about it. We had two other people (later) — this is crazy — who wanted to give a backup offer. That’s never happened.”
Part of it may be remnants of the market’s high performance in January in February, particularly in Lafayette Parish. While other parishes outsold Lafayette last year, that was not the case in the first quarter of 2020. Some 851 homes were sold through March, up from the 723 in 2019 and 705 in 2018.
Even as the pending sales dropped in the last three weeks of March, the drop in inventory has kept the market in balance, Keaty noted. March is often a time when people put homes on the market, but in the final week of March there were only 56 new listings, down from 109 a year ago.
The inventory — how long it would take to sell the houses currently on the market — is now at just over four months, Keaty data shows.
“We haven’t lost any value,” he said. “Our average price was up 5%. That was because the months of inventory was below six months. At six months, that’s typically when we say supply and demand are even and prices are stable. Anything below six months, prices will start to go up.”
Homebuilders, meanwhile, may not know until next month how COVID-19 affected the construction activity, which was up in the first three months of this year after last year’s drop. Despite the jobless rate soaring in Acadiana and nationwide, builders aren’t seeing buyers either back out of a contract or financing fall through, said Jeff Wood, president of the Acadiana Home Builders Association.
How the area fares the rest of the year is a concern with COVID-19 coupled with the drop in oil prices.
“I really felt like and a lot of people I talked to felt like we had turned a corner at the first of the year,” he said. “I noticed a lot of activity, and a lot of realtors and builders noticed a lot of activity. Oil and coronavirus — for Acadiana, it’s kind of a double whammy. I don’t know how much the oil will affect us going forward.”
Keaty said the industry is mindful of the oil and gas industry and if that will result in scores of job losses, which could result in a flood of houses on the market. Sales continue to outpace last year’s mark in Lafayette Parish and in Acadiana, but data for April will give a more accurate view of how the coronavirus has affected the market.
“The one thing we have to be mindful of is the energy sector,” Keaty said. “I think that will have a longer-lasting effect on our market than the coronavirus.”
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