• Acadiana home sales fell 10.5% in March, with the REALTOR Association of Acadiana Multiple Listing Service reporting 289 sales in the nine-parish area compared with 323 reported in March of 2010. While the annual monthly count declined, the month-to-month sales increased from February to March 2011 by just under 28%, indicating that demand is picking up as we head into our traditional spring and summer peak selling season. For the first quarter of 2011 total home sales are nearly equal to the number reported in 2010 (Page 1).
• In Lafayette Parish the home sale numbers are a bit bleaker. March 2011 home sales reported (171) were 18.6% below March 2010 (210), although the month-to-month (February to March 2011) sales showed a robust increase of 19.6%. Cumulative 2011 Lafayette Parish home sales (427) are 8.8% below 2010 first quarter sales (468). The bulk of that decline is in new construction sales with a drop of 17.76% while re-sales dropped by 4.43% (Page 2). This first quarter underperformance has to be viewed in light of what was driving home sales in the first half of 2010 – the federal tax credits. In 2010 home sale demand was pushed into the first half of the year in order to take advantage of the tax credit. Once they expired in June 2010, home sales plummeted for the remainder of the year. Amid that backdrop, an underperformance in the first half of 2010 was virtually guaranteed. In observing the graph found on page 2 of this report, one can visually see the impact of the tax credits and the corresponding drop once they expired. The fact that new construction has seen the largest percentage drop in 2011 is also not surprising considering that it was the beneficiary of much of the demand spurred by the tax credits with 2010 new construction sales increasing nearly 10.5% over 2009.
• Despite the drop in demand, Lafayette Parish home values continue to perform surprisingly well. Page 4 of the report shows that the average sale price of a Lafayette Parish home for the first quarter of 2011 was $189,163 as compared to $189,771 for the same period in 2010. That is a decline of only three-tenths of one percent. The median sale price as of March 2011 was $164,000 compared to $166,400 as of March 2010; a decline of 1.44%.
• While March 2011 pending sales (those homes that went under contract), were below March 2010, they are substantially above the 2010 levels shown in the months after the contract deadline date for the 2010 tax credit which was April 2010 (Page 6).
• When studying the balance between current demand and supply in Lafayette Parish, the reports on pages 15-17 reveal much as to what is currently being sold versus what is listed for sale. Page 15 deals with all home sales reported in Lafayette Parish. Page 16 looks at just new construction while Page 17 highlights re-sales. In looking at page 15, the first point to note is that the number of home sales in the $150,000 - $299,999 range is where all of the drop in demand is centered (-20.68% from 2010). Again, that’s somewhat understandable inasmuch as this was the price range that saw the greatest increase last year due to the tax credits. Overall the number of month’s supply of housing in Lafayette has increased from 7.7 months in March of 2010 to 8.8 months in 2011.
• Page 16 reveals that re-sale buyer demand has declined not only in the mid-range $150,000 - $299,999, but also in the upper-range ($300,000 and up) and that the total number of month’s supply has grown from 8.2 months in 2010 to 9.2 months in 2011.
• Page 17 depicts the new construction market. Here we see that the mid-range home demand has declined substantially (-30.97%) but in the upper-end, particularly the $300,000 - $400,000 range, buyer demand has risen strongly over 2010 levels.
The bottom line is that just as in all aspects of life, the Acadiana housing market numbers contain both good and bad. Whichever area you wish to gravitate to, you’ll find what you’re looking for. I see our market as resilient and in pretty good shape considering the 2010 benchmarks we are forced to compete with. I believe it could be the end of the third quarter of this year before we will really be able to forecast our 2011 housing market performance in comparison to 2010. With the current level of pending sale activity, I remain optimistic.
William J. "Bill" Bacque
Chief Executive Officer
***for a copy of the full report, please email Kisha@KishaKana.com