The residential real estate market in Lafayette Parish may have hit a maturation point, analyst Bill Bacque said this week.
Total home sales in the parish have trailed those in neighboring parishes through the first six months of 2019. While total home sales in Acadiana remains ahead of last year’s record-breaking total at the midway point, sales inside Lafayette Parish dropped in the last two months.
Total home sales for July was 293, down from the 340 in July 2018. That followed the 276 sold in June, which was down from the 341 sold in June 2018. For the year, home sales in Acadiana is up to 3,220 from 3,147 sold through July last year while Lafayette Parish is at 1,963, down from 2,054 sold through July last year.
The market has changed a bit, Bacque told members of the Acadiana Home Builders Association on Tuesday, and Lafayette Parish may have lost some of the allure it had years ago.
“We’ve never been, going back to the early 1990s, a relocation hub,” said Bacque, president of Market Scope Consulting. “Back in the ‘90s, when the major oil companies had their executive offices here, we had a lot of people moving in and out. What has fed our market over the years was the surrounding parishes. People wanted to move to Lafayette. What we’re seeing in the marketplace now as far as numbers is the growth in housing outside of Lafayette Parish.”
The 505 homes sold in Acadiana last month fell just short of last year’s 510, but it’s the outlying areas that’s driving the market. Of those 505, 212 of those came from outside the parish, up from the 170 reported last year.
It’s also an economic issue, he noted. The average sale price outside of Lafayette Parish is $140,000, about $50,000 lower the average inside Lafayette Parish.
“Does that have an impact? The answer is yes,” Bacque said. “The second thing is infrastructure. If I live in New Iberia, I can drive less than 20 minutes to Broussard and I’ve got every kind of shopping and restaurant opportunity I could want. If I live across town in Lafayette, I can’t get across town in 20 minutes.
“Is that a problem? Yeah, I think it’s a problem.”
Home sales in Lafayette Parish have sort of paralleled the price of oil, noted Jim Keaty, owner of Keaty Real Estate. When sales dipped in January and June, both the worst for each month since 2012, it came after the price of oil dropped in November and December.
Sales then picked up, including an April that was only two sales shy of the April 2018 total, which came after the price of oil trended upward, eventually getting to $74 a barrel in April.
The price of oil since then, he noted, has dropped back toward $50.
“It could be a coincidence, but that correlated to the lack of sales in January and June,” Keaty said. “I don’t believe it has anything to do with people actually losing their jobs, but what I think happens is the perception of the market. Our supply falls, but our demand also falls. Our prices in Lafayette Parish have not increased.
“Maybe it’s a knee-jerk reaction, and I don’t think people will ultimately change their plans, but maybe they’re thinking once they see it stabilize, they’ll move forward.”
The market could bounce back, he noted, if pending home sales are an indication. While pendings in Acadiana rose significantly, pendings in Lafayette Parish were at 307 in July, up from 305 in July 2018. And the total so far in 2019 (2,136) is the same total through July 2018.
“I believe there will be some sales and we’ll end up close to where we were last year in August and September,” Keaty said. “The buyers are out there looking. They’re probably just slower to make a decision.”