Average home sale price around $147,600 locally

While the rest of America is fretting over the mortgage crisis and rising home foreclosures, the Tri-parish real estate market in general – and the Houma-Thibodaux metropolitan area in particular – shined, according to local real estate agents.

From January to October 2008, the average existing home sale price in the Tri-parishes rose to $165,014, according to Bayou Board of Realtors President Pamela Testroet. During the same time frame, the average new home construction sales price jumped to $193,651.

“This is the fastest growing real estate market in the state,” Testroet said. “I don’t think many people outside this immediate area would have guessed that.”

Even as home prices continue to climb, buyers are seeking affordable housing.

“We’re looking at $100,000 to $199,000 as the hottest price range, with an average price sale of about $147,600,” Testroet said.

The double impact of hurricanes Gustav and Ike put a temporary halt on the steady climb of home appreciation, but the market seems to be quickly coming back.

“The first half of the year started very strong, very brisk,” said Bill G. Boyd, owner/broker of Town & Country Real Estate in Houma. “We encountered what I would call a ‘stop month’ in September simply because of the storms. It’s a bit of a soft market, but a recovering market.”

A survey of 23 local real estate companies showed that the average home sale price in October 2007 was $143,000, according to Boyd. Last month, the average home sale price was about $164,000, he said.

Many realtors and business people have considered the local real estate market to be the nation’s best-kept secret. However, it did not escape the attention of the federal government.

In August, the Office of Federal Housing Enterprise Oversight calculated the Houma-Bayou Cane-Thibodaux metropolitan area had the highest home appreciation in the country between the second quarters (April through June) of 2007 and 2008 at 9.1 percent.

“Typically, the things that drive a high appreciation rate are good population growth and solid economic conditions, including good income growth,” said Andrew Levientis, senior economist at the OFHEO. “Sometimes, a constrained supply of homes available for sale also increases appreciation.”

Realtors concede that the number of homes on the market has not increased much over the past year.

Plus, new home construction has tended to cater to the higher-priced specialty market.

However, agents cite economic models, particularly that of LSU economics professor emeritus Dr. Loren Scott, when predicting the local real estate market will be positive in 2009.

“When people like Dr. Scott are reporting that there will be 4,000 new jobs in Terrebonne Parish, you know there’s going to be a need for more housing in the southern part of our parish,” Boyd said.

Residents whose homes were flooded or damaged by hurricanes Gustav and Ike represent the newest seekers to enter the local market.

“They’re starting to get their insurance and FEMA funds. There will be some migration further north, so some of those homes will go up for sale.”

“Dr. Scott reiterated the fact that our home prices were not overinflated like in other places. We don’t have the foreclosures problems they do,” Testroet said. “There is no reason to think next year wouldn’t be good as well. Compared to the rest of the nation, we’re blessed.”

While the bigger cities have seen tremendous growth in home value, Morgan City and the rural sections of the Tri-parishes are not as robust.

“Right now, the Morgan City and St. Mary market is flat and it will continue to be flat,” said Tim McCubbin, owner/broker of Century 21 Action Realty in Houma and Morgan City. “There’s not going to be a significant change.”

“The average size home in the Morgan City area will sell for about $125,000 and takes about four to five months to sell. In Houma-Terrebonne, it’s about $160,000, and we sell it in maybe three months,” McCubbin added.

The biggest obstacles keeping more people from purchasing homes are high insurance costs and deductibles, according to realtors. That has been a big factor in Lafourche Parish’s housing market.

“In so many places you have to have flood insurance. It is hard to find homes that are not in a flood area,” said Beverly Guidry, owner/broker of Beverly Guidry & Associates in Raceland. “The only bright spot is we’re going to have a new subdivision with affordably-priced homes above St. Mary’s Catholic Church in north Raceland.”

“Insurance costs have severely hampered the market because insurance has gone up as much as 50 to 100 percent in a few places,” McCubbin said. “It has all but dried the market up in the lower floodplain areas like Montegut, Chauvin and Theriot. In some cases, it is two to three times as much as the same size house in Houma.”

And realtors agree, even though the national mortgage crisis has not been felt locally, it will impact how potential buyers finance their home purchase.

Agents expect banks and credit companies to tighten loan qualifications, meaning homebuyers will have to take on more of the financing themselves.

They also expect more conventional home loans from the Federal Housing Administration and Veterans Affairs to surface.

Despite any concerns, 2009 looks to be another solid year in Tri-parish real estate.

“I don’t see anything but a rosy market ahead for the next 12 months” Boyd said. “All the perimeters are there and ripe for an extremely good market.”

“None of us have a crystal ball, but all the economists suggest things are positive,” Testroet said. “For some reason, Houma has been the last to feel a recession. So, we’re anticipating another good year.”

The average price for a single-family home in Terrebonne Parish has continued to rise over the past several years according to reports released by the Terrebonne Economic Development Authority.