Real estate prices are a function to supply and demand. Too much supply and not enough demand, home prices crash. All the data for 2019 is showing more supply than in the history of Lafayette Parish. What’s going to happen to the real estate market in Lafayette if supply continues to rise?
Hi, my name is Jim Keaty with Keaty Real Estate and this is your weekly Lafayette market update, brought to you by Levi Kastner at Thimmesch Kastner Insurance.
Now real estate prices are a function to supply and demand, so let’s take a closer look at the supply and the demand in the first quarter of 2019. Let’s start by looking at the increase in the actives. The MLS reported a 121 more actives or 3% increase and the number was a large surge of actives in January. And with that surge of new actives in January our months of inventory also surged to the highest levels that we’ve seen in the last six years. January reported nine months of inventory but in February and March the demand absorbed the increase in the supply and the months of inventory actually fell below six months of inventory. Supply eagles demand at six months of inventory and at that six months prices are stable.
Here’s another look at the trajectory of 2019 actives in relation to 2017 and ’18. Another good indicator of demand is foot traffic, so let’s take a look at the number of showing setup through Centralized Showing Service. The Centralized Showing Service or CSS as we call it, is the system that all realtors use to set up showings for buyers. We compile all the showings for Lafayette Parish and report them back to you. And as you can see we had an unusual number of showings in January that led to an increase in sales in February and March. What this means is that buyers were actually out in full force in January and putting houses under contract, but it takes about 35 to 40 days on average for these houses to close.
However, we did see fewer showings in February and March, which could mean that either the buyers are looking at less homes before they’re actually making a decision or that we’re going to see a slowdown. It’s going to slow down slightly going into the second quarter.
When we look at the pendings we see that the MLF reported a record number of pendings in February and March and this could lead to a very strong second quarter and it’s a good indicator we’re going to have a great second quarter.
Next week we’re going to breakdown the new construction sector for Lafayette Parish, so keep an eye out for next weeks’ market update video.
I’m Jim Keaty with Keaty Real Estate and this weeks’ market update has been brought to you by Levi Kastner at Thimmesch Kastner Insurance. I’ll see you next week.