Although Lafayette is losing some of its local college graduates to out of state employers, the city is also attracting college graduates from other metropolitan areas in the state.
Check out the Acadiana Advocates article on this topic below: https://www.theadvocate.com/acadiana/news/business/article_d08198f8-42d9-11ea-9d6f-0b7fb5244e1e.html?utm_medium=social&utm_source=facebookacadiana&utm_campaign=snd
January 12, 2020
An updated look at the Lafayette Parish market indicates the market is still stable; however, slight changes are being observed.
In November, I last took an in-depth look at the overall market trends for the Parish. The overall market at that time was indicating relatively stable trends. A couple of months later, we still see stability, but some metrics are indicating some minimal improvements.
December 2019:
The first chart shows how the market was performing for December 2018 vs. December 2019. The median sales price rose by 4.7%, while the average sales price declined by 3.4%. The statistics differ because the average is affected by outliers, while the median is not. So, in this data set, the lower-priced outliers are affecting the average sales price.
The number of closed sales and the days on the market have both had favorable changes. The number of closed sales increased by almost 6% in December 2018. The chart is showing that there was a negative change in the days on the market, the fewer days on the market the better in real estate.
The next chart shows the year over year trends for Lafayette Parish Market. The market is still considered stable because the changes in the median sales price, average sales price, and average price per square foot all have minimal change. The change is not enough to classify the market as increasing. Although most of the statistics are indicating a stable market, they are still moving in a favorable direction.
The only statistic that is showing an unfavorable result is the months of housing supply. The months of housing supply represents how long it will take to sell properties that are currently active. The number of active listings is growing faster than the number of houses that are being sold.
Below is an interesting chart that shows the percentage of sales by price range over the past few years. What stands out here is that the majority of properties that are being sold have a sales price from $100,000 to $300,000. Also, properties that have sold from $300,000 to $1,000,000 have had an increasing portion of the market share in the past couple of years. As you can see, the number of sales of $1,000,000+ homes is so small that it does not even register on the chart.
The pie chart below shows similar information as the chart above, but instead of showing the data as percentages, it shows the total number of sales in each price range for 2019. The largest price ranges are $100,000-$300,000 (75.04%). As you can see, the higher end price range takes up a small percentage of the total market.
This next chart shows the percentage of homes in each age range. The age ranges are the ones used in MLS. What’s interesting here is that New Construction and 1 -3-year-old homes decreased from 2017 to 2019 in the Lafayette Parish Market. New construction has slowed down slightly over this time, which is consistent with the number of permits pulled over this time period. Although the percentage of sales decreased during this time period, they still take up the largest percentage of sales over this time.
This next chart shows the percentage of sales for homes grouped by the living area square footage. As you can see from the chart, homes sold in Lafayette Parish are typically between 1,200 sqft and 2,000 sqft. The chart also shows that after 1,600 sqft, the larger the living area of the home, the less of a percentage it takes up in the market place. While there are plenty of homes that have over 2,800 square feet of living area, the number is minimal when compared to the rest of the market. This is why the chart shows homes with 2,800 square feet as having 0.0% of the sales.
The next chart is showing year to date sales. Although there is a limited amount of time in this analysis because we just started the New Year, it is still interesting to look at. Does anything stand out in the chart below?
I noticed a huge increase in the average sales price (62.9%), with only a 5.5% increase in the median sales price. Could this be right? Well looking at the data a little more closely, this year in Lafayette Parish there has been a sale for $1,408,486 and one for $2,900,000. Last year the highest sales price in the first 8 days of the year was only $479,000. This illustrates a little more clearly how outliers affect averages, while typically, they do not affect the median.
The high sales have also affected the average price per square foot in 2019. It shows that there has been a 23.4% increase in using this metric.
Another positive factor is that the number of closed sales has continued to increase from this time last year, which was also true for the previous month.
I hope that this analysis was informative for how the overall Lafayette Parish is performing. Hopefully, you have a more in-depth view of how the market is performing going into this New Year. I would like to hear your thoughts about the Lafayette Parish Market.
Remember that this analysis includes all sales in Lafayette Parish Market. If you are in the market to sell or purchase a home, it is important to look and see how your specific sub-market is performing. If I can be of assistance to you in the future for any real estate appraisal needs, please do not hesitate to contact me at 337.254.2215 or Lduple4@gmail.com.
Data Source: MLS, detached single-family homes sold in Lafayette Parish
Here is my monthly Lafayette market analysis update for October 2019. The purpose of this article is to describe how the overall Lafayette Parish real estate market is performing.
When I am working on an appraisal, I typically do a thorough market analysis for each market segment on every property. This analysis represents how competitive sales in the market are performing over time. However, it is also necessary to know how the larger market is performing. The larger market that I am referring to is the Parish that each property is located in. For this article, I will analyze sales for Lafayette Parish. The data analyzed is strictly from the Realtors Association of Acadiana Multiple Listing Service (RAA-MLS). Most “For Sale By Owner” Sales or Sheriff Sales are not included in the analysis.
I have sought out the advice from other appraisers locally and nationally to develop the charts and graphs for the Lafayette market analysis in this report. For the analysis, a series of charts and graphs are included with a brief explanation.
The chart above shows the year over year statistics for several metrics. There is a subtle change in the metrics used in this chart. The median sales price is indicating less than a 1% decrease in prices, while the average sales price has increased by 1%. Additionally, the average price per square foot has only decreased by 0.1%. I typically do not classify the market as changing, whether that be increasing or decreasing, unless the change is more than 3%. The reason that I have a margin of error of 3% is that each buyer and seller has slightly different motivations in each transaction. A house could be listed for sale for $200,000. One buyer may be willing to pay full price for the house, while the next buyer may only pay $195,000. Each willing participant has their own motivation; therefore, I only determine the market as increasing or decreasing after the change is greater than 3%.
The months of housing supply has also increased over this time period by 10.2%. This is primarily because the active number of listings has been steadily increasing, as will be shown later. Also, the number of closed sales and the absorption rate has increased by 21.2%. This is a positive factor in the market because it shows that more homes have been purchased. Lastly, the days on market has increased slightly, but only be 2.2%, or two days.
The chart above is similar to the year over year chart; however, it is showing the statistics for the year to date sales. So, it is showing the statistics for each year as of January 1 until the end of October. As you can see, the year to date statistics is very similar to the year over year statistics. Most of the metrics are within the 3% margin of error; therefore, the metrics are indicating that property values in Lafayette Parish are stable. One area where change is occurring is in the months of supply. Last year there were 3.88 months of supply, while this year, there is 4.28 months of supply. This is a 10.2% increase. As you will see later on, this is due to the rising number of active listings in the market over the past few years.
This chart is showing a comparison between sales from October 2018 versus October 2019. The median sales price and the average sales price are in sync with the year over year statistics. However, the average price per square foot has changed by 2.2%. While this is still within the 3% margin of error, it is more change than in the year over year statistics. It is worth keeping an eye on in the coming months to see if it continually increases.
The chart above tracts the median sales prices and the average sales prices in Lafayette during the month of October over the past few years. As you can see, the median sales price has declined over the past two years, while the average sales price has gone up. The average sales price could be affected by higher-end homes in the area that is driving the average price up. The median sales price is less affected by extremely high or low sales; therefore, it is different from the average sales price.
The chart above shows a scatter plot for all sales in Lafayette Parish over the past four years. The y-axis has been decreased to only show the sales under $1,000,000 to show the trend line better. The trend line shows a very slight uptick in values. However, the change is very small, and it is essentially flat. Lafayette Parish sales have been stable for several years now.
The chart above trends the median sales price, the average sales price, and the average price per square foot over time. This graph confirms the previous charts and graphs that values are mostly stable over time. There is, however, a recent uptick over the past 6 months. I will continue to analyze this over the coming months to see if values continue to rise or if they stay in line with the historical ranges.
The chart above shows the number of active listings, sold listings, and months of inventory over time. The blue line represents the active listings, which has been steadily increasing over the last three years. Because of this increase, the months of inventory (as shown in the year over year statistics) has also increased. The number of sold properties has been fairly stable for the past eight months. The chart shows that there was a slow down last year, starting around August and lasting until March. This is when interest rates rose. They have since gone down, and the number of sales has increased since. Although this chart does not show the months of inventory too well, the one below shows how the months of housing supply has changed over time. Currently, there are slightly over 4 months of inventory. As you can see, during winter months over the past two years, the months of inventory has risen due to less activity in the market.
Based on the metrics included in this analysis, values are stable in Lafayette Parish. There is some change, as is expected in real estate; however, the change is within a 3% margin of error. Recently, there has been an uptick in sales prices, but active listings also continue to increase. It will be interesting to see how prices continue to change in the future.
Next time I hope to include additional graphs to give more insight into how the market is performing. Again, this market analysis is showing all properties in Lafayette Parish. It is important to know how your specific market segment is performing when you are considering purchasing or selling a home. If I can be of assistance to you in the future, please do not hesitate to contact me (c. 337.254.2215, email: Lduple4@gmail.com)
I hope that this was insightful, and I look forward to the next Lafayette market analysis update in December. If you are interested in other articles that I have written, you can check them out at www.acadianaappraisals.com or on my Linkedin page.
Determining the living area of a home can be somewhat challenging in real estate. Currently, there is not one nationally-recognized standard for measurement that every appraiser must follow. This can create challenges when measuring a home to list for sale, or when measuring for the appraisal after the home has a contract on it. While there is not a single set of rules that every appraiser must follow, one standard that is widely known and used is the American National Standard Institute (ANSI). Additionally, Fannie Mae and FHA each have specific guidelines that appraisers are required to follow for loans that go through those agencies.
While there is no one standard that appraisers must follow when it comes to measuring single-family homes, there is one standard that is well know; the American National Institute (ANSI).
ANSI has several guidelines for what is considered living area and what is not. One area that these guidelines cover is ceiling height, which often creates confusion when it comes to calculating gross living area. ANSI says that any part of a room that has less than 5 feet from the floor to the ceiling is NOT included in the living area. It also says that for a room to be included in the gross living area, at least half of the space in the room must have a ceiling height of at least 7 feet. This is important when measuring homes that have a second or third level. There are instances where the ceiling can be sloped in some areas with a height of less than 5 feet. It is important that the correct measurements are taken so that an accurate gross living area can be calculated. Ceiling height can also be an issue in A-frame houses. Since the exterior walls have a slope all the way (or almost all the way) to the ground level, appraisers must be careful when measuring A-frame homes.
The following is an illustration from the ANSI standards to help clarify which areas can be included in the GLA. (Figure 4 from The American National Standard For Single-Family Residential Buildings)
Another area that ANSI guidelines covers is the stairway. ANSI says that, “the area of both stair treads and landings proceeding to the floor below is included in the finished area of the floor from which the stairs descend, not to exceed the area of the opening in the floor.” This means that if you have a home with a second level, the stairs are included in the gross living area of the second floor as long as the area of the stairs does not exceed the opening above. ANSI also goes on to say that, “areas beneath stairs are included in the finished square footage regardless of the distance between the stairs and the floor below or of the degree of finish of that area.” Although the area beneath the stairs may be less than five feet, ANSI says that it is included in the square footage of the space below the stairs.
If a loan is insured by FHA, appraisers must comply with their standards. One of these standards specifies how living area is measured. According to the FHA guidelines, the gross living area (GLA) is defined as “the total area of finished, above-grade residential space calculated by measuring the outside perimeter of the structure. It includes only finished, habitable, above-grade living space.” FHA also says that the appraiser must:
According to FHA, it is important that only above-grade finished areas are included in the GLA. Also, finished areas not accessible directly from the main dwelling are not to be included in the GLA; i.e., a bonus room above the garage that can only be accessed through the garage. While basements are not typically part of homes in South Louisiana, it is important for appraisers in other areas of the country to be aware of this guideline.
FHA also talks about “Additions and Converted Spaces.” For additions or converted space to be considered living area, it must be:
It is important that the addition or conversion meet all three requirements. If any one requirement is missing, then it is not considered part of the living area. For example, an attic above a garage that is finished as the rest of the dwelling is not part of the gross living area if you must walk through the garage to access the conversion. For these such additions or conversions that do not meet the criteria, the appraiser must analyze the effects of the area and account for it in the appraisal.
Fannie Mae also has their own guidelines on what constitutes living area. Their guidelines state that when calculating living area, appraisers must use exterior building measurements per floor for above-grade areas. They also state that living area includes only finished areas that are above grade. Areas that are finished, but not included as living area, must be considered by the appraiser by analyzing the market to determine its effect on value.
In addition to these guidelines, there are many more rules for calculating the living square footage of residential properties. To get the most accurate measurement of your home, be sure to contact a qualified appraiser who is knowledgeable of the rules and guidelines that must be followed. If I can assist you in your measurements, you can contact me by email at Lduple4@gmail.com or on my phone at 337.254.2215.
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I’m sure you’ve heard the question, “What are the first three rules of real estate?” The answer that many real estate professionals will tell you is “Location, Location, Location.” While this may be true, when it comes to valuing your home, appraisers typically use comparable homes with similar locations. When the comparables have similar locations, what else factors
Several factors come into play when valuing a home. One of the most important features of your home that affects value is the living square footage. Basically, the more living square feet you have, the more your home is worth. There are some instances where a home can be over-built and have too much square footage. However, most of the time, the more square footage you have equals more value.
Another factor that can increase the value of your home is
Several other factors can affect the value of your homes: lot size, views, bedroom and bathroom counts, covered parking, amenities, etc.
Ultimately, the local market decides what factors influence the value and by how much. It is important to have the assistance of a local real estate professional to analyze the market and to determine which factors are/are not important in your market area. If you are considering buying or selling a home and want a reliable opinion of value, contact me at 337-254-2215.
Lane Duplechin, AGA
Candidate for Designation with the Appraisal Institute
One thing that I hear sellers say often is, the house down the street sold for “X”, therefore the value of my house is worth “X”, or something very close to “X”. While this statement could hold some truth in a newer cookie cutter subdivision, it is almost never true in most other subdivisions. Even in an older cookie cutter subdivision this statement most likely would not be true. The condition of a house has a big affect on the value of a home. Homes suffer different degrees of depreciation based on how a home owner maintains the home and the kind of updates that are made over the years. What if the home down the street has been remodeled? Instead of having the original tile or formica counters and tile and carpet flooring, maybe the owners updated the counters to granite, replaced the original floors with wood and new ceramic tile, and updated the bathrooms. So if your home hasn’t had any updates, then it most likely would not have a similar value to the home down the street, assuming that all other features are the same. Likewise, the house down the street may have been neglected and is in poor condition. Do you still think your property is worth the same as the one down the street? Probably not!
In a more custom built subdivision, your property most likely has other differences from the house down the street. Maybe your living square footage is significantly larger/smaller, the lot sizes could be much different, and/or the quality of your home could be superior/ inferior to the house down the street. Other differences include number of bedrooms and bathrooms, the type of covered parking (carport vs. garage), or the amenities that come with a property (covered patio/porch, fence, storage buildings, workshops, outdoor kitchen, pool, etc.) The living square footage, often referred to as Gross Living Area (GLA), is one of the most important characteristics that affect value. If the house down the street is 500 sf larger then yours, then this property might be worth a lot more than yours. If your property has a much smaller lot size than the property down the street, wouldn’t you think that your property is worth less? All of these property characteristics could play a role in the value of your home. They need to be analyzed by a professional to determine what kind of effect on value they have.
The truth is, is that every property is different and every market is different. If you are thinking of listing your property for sale, it is important that all of the relevant characteristics of your property are analyzed by an expert in your market. A certified appraiser has the training, education, and experience necessary to provide you with an accurate value of your home, which gives you a valuable tool in listing your property and in your negotiating efforts once the property is under contract.
The real estate market is constantly changing. There are some sub markets in the Lafayette area that have declined in the last few years, while others have remained stable. If you are thinking about listing your property for sale, it is important to know how your market is performing to know the true value of your home. You should hire a qualified real estate appraiser to assist you in determining your home’s value. I’d be happy to assist you in your valuation needs.
Do you have questions about how the Acadiana Market is performing? Do you need to know the value of your property? Contact Duplechin Appraisals, LLC to find out how we can assist you.