Real estate appraisals typically involve an on-site property inspection. The appraiser will schedule an appointment in advance with the homeowner or real estate agent. During the site visit, the appraiser will generally make observations, take pictures, and measure the house.
It can be helpful to know what to expect while the appraiser is at your home.
Measure, observe, and photograph the exterior – Appraisers use a variety of tools to measure the exterior of the house. Any other permanent structures such as guest houses or workshops on the property will also be measured. These measurements will be used to create a sketch, also known as a basic floorplan, of the house. The appraiser will also take pictures of the exterior and may make notes of his/her
Observe and photograph the interior – The appraiser will need access to enter the house and any other permanent structures on the property. He or she will perform a walk-through of the home where access to all rooms and closets will be necessary. The appraiser will take pictures of each room. He or she will observe and potentially make notes regarding the quality and condition of the interior building materials and fixtures.
Potentially check electrical outlets, appliances, window access, and other utilities – Appraisals completed for certain types of lending transactions, such as for FHA loans, have additional requirements. The appraiser may be required to confirm all utilities and appliances are turned on and function properly. This could include (but is not limited to) testing electrical outlets, turning on water faucets, checking the water pressure, opening windows, testing the HVAC unit, and making sure the appliances are in working condition.
Potentially check the attic – The appraiser may be required to inspect the attic for specific lending transactions. It is important that the homeowner ensures access is available.
Ask for additional details – The appraiser may also have specific questions for the homeowner or agent that could aid in the appraisal process. It can be beneficial to have details prepared regarding items such as recent renovations and/or any recent or needed repairs.
A few other helpful tips that ensure the process goes smoothly:
Properly restrain pets – Appraisers get to meet all types of furry family members every day! Some typically friendly pets may not always welcome the appraiser in their territory. It’s recommended that all pets are appropriately handled during the appointment.
Unlock sheds, outdoor buildings, etc. – The appraiser must look inside all permanent structures on the property. Everyone remembers to give the appraiser access to the house, but please don’t forget about the other buildings.
Don’t worry about the house being spotless – The appraiser has observed homes of many varying conditions, and appraisers can professionally look past everyday clutter. Most importantly, the appraiser needs easy access to each room and with unobstructed views. Please keep in mind the photographs of the house will appear in the appraisal report.
If you have specific requests for the appraiser while visiting your home, please let us know! The appraiser appreciates the invitation into your home, and they wants to make the homeowners comfortable.
Please give our office a call if you have any specific questions about the site visit.
Simply stated, a sale is a property that has sold. A comparable, commonly referred to as a “comp”, is a recent sale that a reasonable buyer would consider as a good substitute for the subject property. Not all sales can be considered comps! A house that sold down the street doesn’t automatically get designated as a comp. That house could be a 3,500 square foot home on 2 acres with a pool, and it just doesn’t serve as a comparable substitute for the buyer’s 1,250 square foot house. (Also, very important to remember when using price per square foot as a guide.)
The comp selection process involves identifying properties that most closely align with the subject property. There is a small bit of discretion used, but a good comp should mark off the following four items:
Location – A comparable will IDEALLY be located as close to the subject property as possible. For complex properties, however, comparables can be miles away from the subject property.
Recency – Timing of the sale is important. It is preferred to use very recent sales. This is especially important in a changing market environment. There are situations where the best comparable sold is further in the past. Time adjustments, if supported, can be used if necessary for the older sales.
Quality/Condition/Features – Comps are typically very similar in overall quality and condition as the subject property. The quality of finishes for each home is evaluated and aligned as closely as possible. If the subject property has high end finishes, comparables should be selected with similar high-end attributes. Likewise, a home renovated from the floors to the ceilings would not serve as a good comparable for a home with only new interior paint.
Living Square Footage – All else equal, the best comparables will have a very similar living area as the subject. Accurate measurements of the subject property are very important so that the best sales can be selected as comparables. This accuracy is especially important when pricing a house using sales data.
Of course, it is easier to identify good comps for some properties than it is for others. The number of good comparables can be limited for complex properties. In these situations, it is often necessary for the appraiser to make adjustments for the varying property features.
Each appraisal is unique, but the overall general process tends to follow three general steps. Ultimately, the final opinion of value is what many people want to know, but the process to reach that final value is detailed and thorough. Here’s a brief overview of those three steps:
Site Visit The site visit occurs when the appraiser visits the property. It is also commonly referred to as an appraisal inspection. Once we receive a request for an appraisal, our office will reach out to the homeowner or real estate agent to schedule a day and time for the appointment. The appraiser will perform a variety of tasks during the appointment. Some of the tasks will include measuring the exterior, making visual observations of the exterior and interior, and taking photographs of all the interior rooms. Appointments typically last 30-45 minutes but can be longer for larger and/or more complex properties.
Offsite Research and Report Writing The offsite research is typically the most time intensive portion of the appraisal process. The amount and level of research varies by property, but the appraiser spends several hours at the computer working on each property. The subject property is closely examined, the market is analyzed, and recent sales are studied. The data is collected and summarized in an appraisal report format.
Arriving at a Value Conclusion The appraiser arrives at the final value conclusion after all research and analysis has been completed. The opinion of value is often referred to as the appraised value. This value can be expressed as a single value or a range of values. It is documented within the final appraisal report.
To understand more about the appraisal process or how we may be able to assist you with your valuation needs, please reach out to us at 337-714-8378 or AcadianaAppraisals@gmail.com. We’re looking forward to hearing from you!
Sale prices and sale volumes are continuing to increase.
Days on the market are showing significant declines.
2021 has started strong.
As most of you probably already know, the Lafayette Parish residential real estate market continues to remain strong. Homes are moving quick, and sales prices are continuing to creep up. 2020 proved to be a strong year for this market despite the global pandemic, but the data trends for 2021 are setting the stage for what may look like yet another stellar year.
Data gathered from the Realtors Association of Acadiana’s database is summarized in the charts and graphs below. For purposes of this analysis, detached single-family housing data in Lafayette Parish through March 31, 2021 is presented. The commentary is focused on the last 12 months while highlighting the most recent quarter and month.
The metrics for the most recent 12 months are continuing to show favorable changes. Sale prices are steadily increasing. The number of closed sales increased by 640, or almost 20%, as compared to April 2019 through March 2020. The data strongly supports that houses are moving quickly with the average days on the market declining from around 3 ½ months down to about 2 ½ months. There was also a slight uptick in the average square footage.
The Monthly Price Metrics chart provides a good visual of the sales price statistics over time. It is clear the last 12 months have been on an upward trajectory. The increases can be attributed to a couple of factors. First, the limited inventory within Lafayette Parish is creating a low supply and high demand dynamic that drives up prices. Currently, there is approximately a month and a half of inventory within the market as compared to three to six months during 2016 through early 2020. Second, increases in construction costs have impacted values. Over the last nine months, costs have increased dramatically and have driven up the cost to build a new house. The differential between existing versus new home prices has widened, and as a result, the demand within the resale market has increased.
Looking more closely at 2021, the number of sales in the first quarter are 10% higher than January through March 2020. Even going back to 2017, the graphic highlights how well the start of 2021 was in comparison to recent years.
The Lafayette market has been very strong over the past 12 months. Even with a global pandemic, the housing market is strong. I have attached a few charts and graphs for my most recent Lafayette market update. They will show how the market has been performing over the past year and beyond. Keep in mind that the data only includes detached single-family housing. If you have any questions, please do not hesitate to contact me.
I hope that this Lafayette Market Update has provided you some good information. If you have any questions, please feel free to reach out to me. If you would like to share these charts and graphs, I ask that you disclose where they came from. You can check out my business facebook page here! If you are in need of an appraisal, you can click here for a free quote. Thanks for reading and I hope that 2021 is stronger than 2020.
(NERD ALERT) I have been working with new software to develop more dynamic and interactive charts. You can click on data points within the chart to see the stats at that time or for a particular location. I have included a couple of preliminary charts. Feel free to test them out and let me know what you think!
It would seem likely that a global pandemic and a decline in the oil and gas industry would cause our real estate market to slow down dramatically. On the contrary, interest rates are now so low that they are offsetting the hesitation that one would assume market participants might have. Real estate trends continue to experience favorable changes.
For the month of May, there was a big dip in the number of closed sales as compared to what occurred in May 2019. The market seemed to expect the number of closed sales to be low since we had a stay at home order enforced throughout the month of April. But as predicted based on the number of pending listings in April, there has been a huge increase in the number of sold properties in June 2020. In fact, there was a 41% increase in the number of sales from May to June alone. Additionally, there was a 31% year over year increase in the number of closed sales for the month of June.
In the market area, favorable trends are being observed in both the median and average sales prices for year-over-year data and year-to-date data. However, the change is not enough to indicate values are increasing; therefore, our market is still considered stable.
The number of new listings and pending sales has passed the initial surge from the stay at home order ending. While there is a little more fluctuation with the number of new listings on a monthly basis, the trend line over the past six weeks is more stable than it was the previous month or two before that. Also, pending listings have decreased some from their peak six weeks ago, but the number of new pendings on a weekly basis is still higher than pre-pandemic numbers.
I hope this information is helpful for you in the market area. Let me know what you think!
Real estate trends continue to move in a favorable direction. The question is, how long will this last? With business continuing to operate below full capacity, will there continue to be buyers in the market area? So far the low-interest rates have been enough to keep the real estate market strong. We will continue to watch the real estate trends closely going forward and let you know of any changes we see.
I hope that you found some value in this presentation. Let me know what you think!
An updated look at the Lafayette Parish Market indicates the market is still stable; however, slight changes are being observed.
Was January a busy month for you? Based on the number of properties sold, it most likely was for Realtors and Lenders in the Lafayette Parish Market. Sales in Lafayette Parish for the month of January are up BIG TIME from last year. In fact, there were more sales in January 2020 than there have been in the month of January for the last 10 years.
Last month, I took an in-depth look at the overall market
trends for Lafayette Parish. The overall
market was considered stable; however, there were some favorable
statistics. This month continues the
The number of sales in January 2020 increased by 73% in comparison to January 2019.
The sales volume was 91% higher this January as compared to January 2019.
Year over year trends continues to see favorable changes.
If you’re interested in some of the details and data, take
a look below.
Data for January:
The chart below shows how the market was performing for January 2019 vs. January 2020. In this chart, the median sales price, average sales price, and average price per square foot all have favorable statistics. The median and average sold price is actually indicating that sales prices increased by a significant amount this January as compared to last January. Average prices can be affected by outliers such as a couple of $1 million+ properties, so the median sales price is often a better indicator.
Date Sales Volume (Jan 1 – Feb 6):
In the chart below, you can see 2020 has a much higher sales volume than in previous years. In fact, sales volume is up 91% from last year. For both 2019 and 2018, there was a decrease in sales volume from the previous year. Interest rates could have something to do with this. For November 2018, the 30-year interest rate was (4.94%) the highest that they had been since February 2011 (5.05%). Since then, there has been a steady decline in interest rates. In January 2020, interest rates were mostly between 3.50% and 3.75%. This is making homes more affordable for consumers.
The chart below shows the number of sales in the area.
Again, in January 2020, there were more sales than in the previous 10 years for
the month of January. There was a 73%
increase in the number of sales for 2020 as compared to 2019. Again, this is a favorable indicator for the
12 Months Sales Volume (Ending on 1/31/2020):
In last month’s market update, the trending 12 months statistics were all favorable. The trend continues this month. In fact, the median sales price, average sales price, and the average price per square foot are all up from last month’s analysis. Although the analysis is indicating values are stable, the statistics continue to move in a favorable direction. This is good for sellers who are trying to sell their homes because it is taking less time to sell their homes and the sales prices are increasing.
So far it has been a strong start in the real estate market
for 2020. The trend is expected to
continue in the near future. At the end
of January 2020, there were 307 pending properties in Lafayette Parish. This is a 16.7% increase from January 2019
that had 263 pending properties. With
interest rates at a three year low, it is reasonable to expect this trend to
continue for the first quarter of 2020.
If you have any appraisal related questions, please do not hesitate to contact me. 337-254-2215 or Lduple4@gmail.com
I hope everyone enjoys the Mardi Gras festivities over the next few weeks. Until next month, laissez les bons temps rouler!!!
Data Source: MLS, detached single-family homes sold in
It’s time for the Lafayette Parish Market Update. It is important to know the analysis is only for Lafayette Parish and only includes detached single-unit properties. We will analyze the change in sales volume and the change for the median, average, and average price per square foot. We will also give some insight around the drivers of some of this change and some of the areas of caution.
The first chart shows the sales volume by month. The black bars represent the months of May. For May 2021, there’s been a 68% increase in sales volume for this month compared to May 2020. Lock down was in place during parts of May last year, but even compared to previous years, sales are up significantly.
The second chart shows the year-to-date sales volume. For January through May, there has been a 42% increase in sales as compared to both 2019 and 2020!!!
The next chart details the median price, average price, and average price per square foot. All three metrics are reflecting a favorable change for the past 12 months as compared to the previous 12-month period. It is important to note the average living area has increased by 2.8% over this time period. In a stable market with all else equal, we would expect the median and average sales price to increase with an increase to the average living area. The living area is one of the most influential characteristics when it comes to value, but it is not typically a one-for-one increase, though. There are other factors also contributing to the increase in prices.
The chart also highlights the significant increase in the number of closed sales and the decrease in average days on the market. The changes are even more significant than when we last looked at the rolling trends in March. The average days on the market for the past 12 months have fallen to about 68 days, and we expect to see this continuing to decline. During the month of May 2021, the average was only 37 days on the market.
The chart below highlights the trend for the median sales price, average sales price, and average price per square foot. This chart shows you how the metrics are increasing over time. There appeared to be a slight dip in the sales prices during December 2019 and January 2021, but there has been a significant climb since that time.
Change In Percentage Of Sales In Each Price Range:
The table below shows the percentage of sales in each price range. The price ranges are on the left side of the chart. The percentage of sales in each price range is tracked over the last eight years. In 2021, there has been some shift. Market share has decreased in the two lower price ranges, while the $500,000 to $1,000,000 price range has increased its market share slightly. This movement has also reflected in some of the changes highlighted in the rolling 12 –month comparison table.
There are a couple of items real estate professionals should keep in mind when reviewing data on a macro level for the entire parish:
The data includes ALL sales in the Parish. This includes properties that sold over a million dollars and properties that sold for under $20,000. If you are trying to value a property, it is IMPORTANT to look at the market segment which includes only properties that are similar to your subject property and that would attract the same pool of buyers. The various market segments within Lafayette Parish can indicate different trends. To rely only on this data and apply it to every property in Lafayette Parish is simply WRONG!!!
There are several factors other than just supply and demand that have caused the median and average sales prices to increase. First, data indicates the average size of the living area has increased over time. We expect the sales prices to increase as the living area increases even in a stable market where the supply and demand forces are not strong. Second, there appears to be a general shift to higher-end properties. Factors such as interest rates, the economy, and the job market must all be taken into consideration.
While values have increased for our market area, it is important to understand the data that you are looking at before making a blanket statement about the change. It is incredibly important to look at the market segment when determining how values have changed for the property that you are trying to value.
If you have any questions, please feel free to reach out to me. You can contact me by email at AcadianaAppraisals@gmail.com. You can also call or text at 337-714-8378. If you are a real estate professional and would like to join our private Facebook group, look for us at “Ask the Acadiana Appraiser”.
I’ve heard a lot of talk of inventory being low for the Acadiana Market Area lately. I was interested in finding out what the data is indicating the amount of inventory for our area. More specifically, I will focus on detached single-family housing for Lafayette Parish. Months of inventory indicates how long it should take to sell all of the properties that are currently listed for sale. We will look at the Parish as a whole as well as the different price ranges.
*The data spans over three years. It runs from September 2017 to the end of September 2020.The price ranges will be broken down based on the listing prices.