Now is a good time to buy real estate in Southwest Louisiana. You may have conflicting information from news reports or hearing depressing figures on the National news. If all the noise you’re hearing about housing has you totally confused, join the crowd. One day you’ll read that owning a home has never been more affordable. The next day you’ll see news that housing starts have plunged to nearly their lowest level in half a century, What you need to take into consideration is the news media reports on national trends and does not always paint an accurate picture of our local economy and housing trends in Southwest Louisiana.
To see where real estate is truly headed, it’s critical to keep your eye firmly on the fundamentals that, over time, always determine the course of prices and construction–those fundamentals would be supply and demand.
Let me share an article from Fortune– Real Estate: It’s time to buy again. In this Fortune Finance article Mike Castleman who lives close to Austin in Texas Hill Country explains why it is a good time to buy from an economist viewpoint.
Today Castleman is witnessing an extraordinary reversal of the new-home glut that helped sink prices just a few years ago and affected markets in Arizona, Florida and California. Castleman is an economist that tracks housing figures and compiles a Metrostudy. The key figures that Metrostudy collects, and that those clients prize, are the number of homes that are vacant and for sale in each city, and the number of months it takes to sell all of them. Together those figures measure inventory — the key metric in determining whether a market has a surplus or a shortage of new housing. In the 41 cities Metrostudy covers, a total of 78,000 houses are now either vacant and for sale, or under construction. That’s less than one-fourth of the 343,000 units in those two categories at the peak of the frenzy in mid-2006, and well below the level of a decade ago. “If we had anything like normal levels of buying, those houses would sell in 2½ months,” says Castleman. “We’d see an incredible shortage. And that’s where we’re heading.”
The cost of renting vs. owning has reversed and with the low mortgage rates available home buyers are realizing they can own a home and keep their budget in place with the same amount they were paying for rent. A shift in home affordability has taken place. I am hearing buyers share this with me and working with more first time home buyers who have made the decision to buy.
In order for our national economy to remain stable it is important to build consumer confidence back with the creation of jobs. Southwest Louisiana has not seen a distressed real estate market so we are in a prime position with good economic news on the horizon. Our industries have turn-around projects, and there are industrial expansions taking place. With approval of Mojito Pointe this will also add to our economic boost. Economists calculate that the pattern of increase in jobs creates a supply for housing. New construction is expected to rise and with an increase in new construction prices will increase for materials.
Southwest Louisiana new construction figures have been down compared to previous years partly because it is cheaper for a home buyer to purchase a home that is already built and Lake Charles has alot of inventory for home buyers to choose from. However, this can change with supply and demand.
A prime example is what took place after Hurricane Rita when our real estate prices went up. Why did they increase? Because of the increase demand in building materials. Drywall was hard to obtain, buyers looked for homes in subdivisions only to find them sold so new construction had a boom to provide housing and with it came higher prices. It is the law of supply and demand.
This Fortune real estate article and interview with Mike Castleman made a lot of sense to me and I think Mr. Castleman is right on with his predictions.
Beat the crowd and take advantage of the real estate market in Southwest Louisiana now! There are deals to me made and I will be waiting to assist you.