State of the Real Estate Market

THE STATE

OF THE REAL ESTATE MARKET

In 1859, Charles Dickens wrote ‘it was the best of times, it was the worst of times’ to open A Tale of Two Cities.

Perhaps no line better describes the housing market in 2021.

Over the past 18 months, the local housing market has mirrored a national trend as housing has become a very hard commodity to acquire. In Northwest Louisiana, the market had already been steadily improving in recent years from 4,178 total sales in 2014 to 4,838 in 2017 and to 5,200 in 2019. The average sold price had risen from about $180,000 in 2017 to about $190,000 in 2019. The local market was already at a high plateau when the pandemic hit in early 2020. Fueled by modern day record low interest rates and a sudden shift in the housing demand curve, with fewer homes available for sale and rising lumber and building costs severely limiting new construction starts, a solid market suddenly become a red-hot sellers’ market. For the month ended May 31, 2021, the local market has seen ‘Active Listings’ fall to 792, down from a 5-year historical average of 2,087. Pending sales have surged to more than 1,100 and May saw 593 sold properties in the seven-parish Northwest Louisiana region, up from 552

in April and 428 in May 2020. Year-to-date for 2021, the market has 2,511 sold residential properties, up 28% over 2020 and up 23% over 2019. ‘Days on Market,’ the average time is takes to sell a house, has fallen from 67 days in 2020 to 39 days. And ‘Average Sales Price’ for May 2021 was $217,917, up from $171,917 in May 2020. The May 2021 numbers are all record numbers for this market. According to Northwest Louisiana Association of REALTORS CEO Scott Hughes, “Low interest rates, low supply of available housing and high demand created the perfect storm for housing at the exact time very few would have predicted a housing crisis. But COVID made many people rethink ‘home’ and new work patterns provided greater flexibility to work from anywhere. to 5,200 in 2019. The net result was a huge demand for housing. And based on current conditions, it is not a situation likely to correct in the short-term. Interest rates have allowed many people to move up with the same monthly note, but more importantly, conditions have opened the dream of home ownership to a whole new generation of first-time homeowners.” sudden shift in the housing demand curve, with fewer Such market conditions, where a house placed on the market receives multiple offers at or above asking price, is often referred to as a sellers’ market. But Hughes does urge slight caution. “The market today does provide For the month ended May 31, 2021, the local market has a huge edge to sellers. But they will need a place to live and as buyers and renters are discovering, finding a place to live in today’s market can be a challenge. Now more than ever it pays to have a professional helping guide you through the home finding and buying process.

in April and 428 in May 2020. Year-to-date for 2021, the market has 2,511 sold residential properties, up 28% over 2020 and up 23% over 2019. ‘Days on Market,’ the average time is takes to sell a house, has fallen from 67 days in 2020 to 39 days. And ‘Average Sales Price’ for May 2021 was $217,917, up from $171,917 in May 2020. The May 2021 numbers are all record numbers for this market. According to Northwest Louisiana Association of REALTORS CEO Scott Hughes, “Low interest rates, low supply of available housing and high demand created the perfect storm for housing at the exact time very few would have predicted a housing crisis. But COVID made many people rethink ‘home’ and new work patterns provided greater flexibility to work from anywhere. The net result was a huge demand for housing. And based on current conditions, it is not a situation likely to correct in the short-term. Interest rates have allowed many people to move up with the same monthly note, but more importantly, conditions have opened the dream of home ownership to a whole new generation of first-time homeowners.” Such market conditions, where a house placed on the market receives multiple offers at or above asking price, is often referred to as a sellers’ market. But Hughes does urge slight caution. “The market today does provide a huge edge to sellers. But they will need a place to live and as buyers and renters are discovering, finding a place to live in today’s market can be a challenge. Now more than ever it pays to have a professional helping guide you through the home finding and buying process.