About half an hour after David Drake put his Denham Springs home up for sale in May, a potential buyer contacted him. An hour later, they were touring the home in Sage Meadow. Two hours after that, they made an offer on his house. Drake countered and they quickly reached a deal to buy the house for $285,000.
“I was concerned how long it would take to sell the house,” Drake said. After all, the home was 20 years old and even though it had been properly rebuilt, it did flood in 2016. “But it flat out amazed me how fast it sold.”
After a sluggish start at the beginning of the coronavirus pandemic that sunk sales during April and May, demand for houses in metro Baton Rouge has taken off in recent months. Record low interest rates have made starter and move-up homes, like Drake's, especially popular. For the past three months, sales are running double-digit percentages ahead of where they were a year before.
“It’s a crazy market,” said Kayla Johnson of Covington & Associates Real Estate in Denham Springs, who served as Drake’s realtor. “I’ve never seen anything like it in my 33 years in the business.”
One new subdivision in Denham Springs was attracting interest from buyers even before the streets had been put in, she said.
Darlita Brown said when she and husband Clarence would see a home they liked on websites such as Realtor.com or Trulia.com, they would be gone the next time they checked. “Houses were flying off the market,” she said. The Browns had been looking for houses in Prairieville, Gonzales, Denham Springs and Walker, but they were forced to widen their search to include homes in Plaquemine and New Roads because there was so much activity. “It almost became a mission for us,” she said.
The couple eventually found a $250,000 home in Walker. They made an offer on the house the same day they toured the property, she said. “We knew we had to get it under contract that night,” Brown said.
In the nine-parish Baton Rouge area, sales jumped above year-ago figures by 22.4% in June, 28.4% in July and 11.2% in August, coming off an April-May coronavirus-inflicted slump in sales. Inventory has tightened and currently sits 30.6% below the number of homes for sale in August 2019. The median sales price for a home was $225,000 in August, an 8.4% gain from $207,500 a year ago. Median means that half of the homes sold for less than that price, and half sold for more.
Home sales also have been strong nationwide. The National Association of Realtors reported existing home sales were up 24.7% nationwide in July, the last month for which they have figures. That comes after a 20.2% gain in existing home sales in June and is the fastest sales rate since December 2006. Lawrence Yun, chief economist for the NAR, told Reuters the increase in sales is being aided by the millions of Americans now working from home during the pandemic, who now need more space. Yun said he expects the strong sales to continue into 2021.
Local realtors said spending months cooped up at home has made some people decide the time is right to buy a house. "People are spending so much time at home, and they're deciding they need more space," said Lisa Landers with Re/Max Professional in Baton Rouge. Buyers also are looking for amenities such as pools, since vacation plans have been scuttled because of the pandemic.
Carol Edwards, who moved from Zachary to Baton Rouge with husband Melvin, said they wanted a home close to their parents, in a low-crime area and with an in-ground pool. They ended up spending about $312,000 for their new property in Woodland Ridge.
“It seemed like the prefect time to get a home,” she said. “We didn’t get in a bidding war with anyone, but once we saw something great, we had to move on it.”
When Kayla Kling found the home she and husband Kyle wanted in the Hickory Ridge subdivision, she knew there was competition for the property. There had been six showings on the same day they toured the house.
“We knew the house would go quick because it had four bedrooms and a pool,” she said.
So at the suggestion of her Realtor, Leigh Adams, Kling wrote a letter to the owners. She talked about how much they loved the home, how the owners had obviously cared for the property, how the house was in the same neighborhood where her husband’s grandmother lived and the next-door neighbor was a childhood friend of his.
The letter worked. The Klings ended up getting the house for $320,000 and closed the sale in August, the same day they were renewing their vows. They had gotten married in April in a small ceremony because of the pandemic.
At first glance, it might seem like this wouldn’t be a good time for the housing market because millions of people have lost their jobs or seen their hours cut as a result of the pandemic and the shutdowns taken to control the spread of the coronavirus.
But Christy Solar, a senior market manager and team leader for Fairway Independent Mortgage Corp. in Denham Springs, said she's been working seven days a week to process mortgage applications. She normally does more than 200 home sales a year, but so far she's already processed about 300 sales since January. Lenders are working with potential home buyers, even those who might have been temporarily unemployed as a result of the pandemic. Lenders are willing to overlook a temporary lapse in employment caused by the coronavirus.
Solar said she’s worked with people who have temporarily lost retail jobs in putting together their paperwork for a mortgage, so it can be submitted as soon as they are called back to work or get another job. “You don’t know what you can get until you try,” she said.
Rates are currently hovering under 3% for a 30-year-fixed rate, according to Freddie Mac. Those are rates that haven't been seen in nearly 50 years.
“When we bought our first house 40 years ago, we had a 17% variable interest rate. And we felt lucky to get that,” said Vicky Hand. Hand and husband Harvey recently bought a home in Denham Springs and are in the process of selling their home in Lake Charles and a condominium in Baton Rouge.
Hand and her husband are both retired and decided they wanted to be closer to family members in Baton Rouge and Denham Springs. She ended up with a $400,000 home in the Greystone Golf & Country Club because it had everything they wanted: it was new construction, smaller than her current house and in a country club. “It’s just a struggle getting rid of furniture,” she said.