Remarks came during Bossier Chamber of Commerce ‘Chamber Chat’
Stacey Tinsley | Bossier Press-Tribune
How has the local real estate market fared during the COVID-19 pandemic? Bossier Chamber of Commerce President/CEO Lisa Johnson spoke with Scott Hughes, the CEO/Association Executive for the Northwest Louisiana Realtors Association during last Monday’s “Chamber Chat” to discuss the numbers.
“I think when this hit, a lot of people thought that with masks and with lockdowns that real estate would just collapse. And, I want to be honest, it has collapsed in some parts of the country,” Hughes said. “There are some markets that are not doing very well. But much to our surprise the local market has been very resilient. It has been amazing what the local real estate market has done here in Northwest Louisiana.”
Historically-low inventory and rock-bottom mortgage rates would normally set the stage for a highly competitive home buying season. While recessions normally have only a minor effect on the housing market, the coronavirus is making life and markets anything but normal.
Comparing residential sales from March through May 2019 to March through May 2020, Hughes says real estate sales for those three months in 2020 have done very well when you look at the numbers.
“Let’s take March. The month everything hit,” Hughes said. “A year ago we had 443 houses sold in Northwest Louisiana. Well this March we had 461 houses sold. We saw closings happen. We saw people take possession of property. A year ago the average sales price in March was $169,000. This year the average sales price was $189,000. That’s a lot of money. That’s showing you the valuation of what is moving in terms of the marketplace.”
Hughes continued his presentation, moving forward.
“In April we were in COVID the entire time,” he said. “April is probably the best closeout month we had. In May, we started to open up a little bit. But in April, we were closed the entire month.
“Real estate did happen. People did virtual. Our people learned [how to perform] virtual open houses and closings, so we managed to keep doing business. A year ago in April, we did 454 transactions. This year in April, we did 420 transactions. So yes, we were technically down a little bit in transactions. But, I will also say last year was a pretty high water mark, so we’re looking at high numbers in 2019 to begin with. And we were only in [to the year] 30 transactions in a month that we were really shut down. The average sales price even went up. so we’re still seeing that rise in value.”
Moving on to May, Hughes noted a downtick in home sales.
“You will see that in May a year ago we sold 511 homes. May this year we sold 424 homes. Statistically we are down a little bit,” Hughes said. “Last year in May was another high water mark for transactions; 511 is a lot of transactions. But, the 424 we sold in May is more than what we sold in April, so real estate sales stayed strong. In May, we had over 900 pending transactions. That shows demand that has been building up.”
On the commercial real estate front, Hughes said new ways of doing business post-COVID may affect what property types are needed.
“This is going to have a real impact on commercial real estate in our market. One thing I think we have seen with the COVID situation is we may need to back up in business and learn a little bit,” Hughes said. “Why did we not have toilet paper sitting in warehouses? It’s durable goods. We may need to get into warehousing a little bit more.”
International supply chains are also affecting commercial real estate needs. “I think we learned as we came through this, delivery systems and critical things, we can’t afford to have those made overseas anymore,” Hughes said. “The tradeoff of getting the cheapest part made in a third-world country, because of the labor cost, didn’t pay off for us when we needed the part. It shut our economy down.”
So far, Hughes said, the commercial real estate market has been consistent.
“Looking at the commercial numbers, particularly Bossier Parish, Bossier last year had 2, 4, 3 transactions [in March, April, May.] This year you really didn’t have a March or April transaction,” Hughes said. “But look at May. In the middle of the pandemic, there were 3 property transactions in Bossier for over $4 million. So people kinda feel that someone is investing in Bossier.”