The string of months of exploding home sales in Acadiana means this: extremely low interest rates are a keeping things moving, and the market is a bright spot in a sluggish COVID-19 economy.
The region had another big month in July, setting sales records with 617 homes sold in Acadiana and 403 sold in Lafayette Parish and also for the $135 million in total dollar volume in the region and nearly $100 million in Lafayette Parish, according to data compiled by Bill Bacque with Market Scope Consulting.
The local real estate market, which cratered at the start of the COVID-19 shutdown and due to the oil and gas slump, is now surging, Bacque noted. Not only are people buying more homes than ever, they’re spending more money while doing it.
“What just four months ago appeared to be a housing market crashing under the weight of an economy shut down by the corona virus and plummeted further by a plunging oil economy, now appears to be an unstoppable juggernaut likely to smash all previous housing records,” Bacque wrote.
The surge in activity could last for another 60 days, said Jim Keaty, owner of Keaty Real Estate and president of the Realtors Association of Acadiana. Data is not yet available as to whether the Acadiana market is outperforming other metro areas in Louisiana, but Keaty noted residential properties priced at $300,000 and under have sold well but commercial property sales have slumped.
Low interest rates mean buyers can get more house for the same monthly mortgage payment. Interest rate on a 30-year fixed rate mortgage was at 3.08% on Friday, according to bankrate.com. For a 15-year fixed rate mortgage, it was 2.66%.
“I think the government knows that they are going to use real estate to keep the economy going,” Keaty said. “For every house that sells and for every dollar of real estate sales, it’s like a shot in the arm for the amount of money that is spent by homeowners and homebuyers. It’s really big.”
Pending home sales, which have been climbing each of the last three months, were almost double from the number of pendings from a year ago. In Lafayette Parish there were 473 pending sales, up from 273 from a year ago.
The number of homes for sale has dwindled in Acadiana, but in Lafayette Parish that total is up to 454 in July after 410 were for sale a year ago, data shows.
“Nationally, we’re seeing a shortage of inventory,” Keaty said. “I think we’re going to end up very close to where we were last year (in total sales). It’s real day to day. Overall, it’s looking good. I think it’s going to come roaring back once we get a vaccine. I think we’ll pick up right where we left off before COVID happened.”