Monday, January 12, 2009

Local Market Facts

I absolutely love to talk about real estate. Usually everywhere I go, I try to direct the conversation, at some point, towards real estate. It’s what I do, it’s what I know and it’s what I love. Lately, I don’t have to weasel real estate into the conversation. Now it’s the first thing people want to talk about when they see me. Fantastic! However, thanks to the national media (who is always just full of positive news) , I usually get “How’s the market?” asked gingerly with pity. When I respond, “Great!” They are shocked and may not even believe me.

Lately, I have buyers and sellers who are informed by peers and family members who watch and read the national news. It’s absolutely wonderful that everyone is concerned and taking an interest in real estate. One question that you should always ask yourself when being fed someone’s facts (opinions) about the market. What is their source? Are they a real estate professional? It is always wise to double check the information with your local real estate professional. I’m always open for questions.

Here are some local market facts for Acadiana, which is located in Louisiana and consists of the following parishes Lafayette, St. Martin, Iberia, Vermillion, St. Landry, Acadia and St. Mary.

Data was gathered from the Realtor Association of Acadiana’s MLS system. There is no implied warranty of the accuracy of the information. I can only go by what was reported to the MLS. Years studied were 1993 to 2008.

Today you can buy an averaged priced home for the price of $170,000 that was on the market for an average of 88 days. Rewind to 15 years ago in 1993, and you could have bought an averaged priced house for $90,000 that was on the market for 98 days. That is a 53% increase in average sales price over the course of 15 years. 1738 homes were sold in 1993 in comparison to 2008’s 3488. Here’s the last 15 years in review:

Year: Average Sales Price Comparison to previous year
1993 $90,037 N/A
1994 $94,353 5% increase
1995 $102,397 8% increase
1996 $108,623 6% increase
1997 $114,924 5.5% increase
1998 $120,808 5% increase
1999 $123,840 2.5% increase
2000 $124,283 less than 1% increase
2001 $129,536 4% increase
2002 $128,886 1% decrease
2003 $133,692 4% increase
2004 $142,171 6% increase
2005 $162,712 13% increase
2006 $175,837 7.5% increase
2007 $178,453 1.5% increase
2008 $169,858 5% decrease

After the one decrease in 2002, the rates dropped to similar numbers we’re seeing today in 2003 and business picked up again. Acadiana has always done their own thing, real estate wise, than the rest of the country. When parts of the nation were rising to incredible prices, were still gradually increasing. The only spikes you’ll see is 2005-2006 that were a result of Hurricanes Katrina and Rita. Lots of newly homeless people had no choice but to relocate in Acadiana. The 5% decrease you see in 2008? That’s the market correcting itself from the unusual price spikes we saw. Overall, Acadiana’s market seems to increase 4% per year. We are still ahead! Although NO ONE can predict the future of real estate, one could assume the following: If history repeats itself, as it usually does, one could invest in a $170,000 home and in 15 years would receive a $102,000 return on investment.
My professional opinion of today’s market is this: It’s still a powerful investment. The rates are at an all time low and that is going to jump start sales. Lots of buyers are sitting on the fence waiting for “rock bottom” prices. But just like the stock market, you don’t know it hit “rock bottom” until it’s already on its way back up. Don’t delay. Buy when it’s the right time for you. Take advantage of the super low rates today because we don’t know how long it will last.

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