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Monday, July 12, 2021

HOW HOT IS IT?

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Top real estate pros assess the local housing market

318 Forum recently visited local real estate pros Tammi Montgomery (ReMax Real Estate Services), the number one real estate agent in the state; Michael Sean Powell (owner and founder MSP Group); Lisa Hargrove (30 years with Coldwell Banker Gosslee, a top Realtor); and Judy Candella (Aspire Realty, LLC.), to check the local real estate market temperature. Here are their responses to our roundtable questions.

318: On a scale of 1-10 (10 being highest), how would you rate the local real estate market at this time?

TM: I would give the selling side of the market a nine due to high demand. I would give the buyer's side a four due to short supply.

Overall, I would give the local market a six factoring in the REO (real estate owned) federal moratorium on foreclosures' overall effect.

MSP: Nine.

LH: I rate the market at this time a 10. It has been a great market this year with great buyers. I have had several out-of-town folks relocate to Shreveport, which has been wonderful. I love to have clients moving into our city.

JC: Eight. A bit more balanced would be better ... especially for buyers.

318: What type of properties are most in demand?

TM: Single-family homes priced under $300K are flying off the market. DOM (days on market) is still better than in years past regarding homes priced $300 to $450K. Homes above $450K are relatively stable with regard to average DOM.

MSP: South Shreveport 71106 and 71115.

LH: The type of properties most in demand are newer construction in the southeast area of town with a price range of $200,000 - $450,000.

JC: Single-family homes from $150,000-$250,000 and homes with a small amount of acreage.

318: Are there areas that are doing exceptionally well or are more desirable?

TM: Homes priced under $350K located in what is perceived as good or better public-school districts are doing exceptionally well.

MSP: Anything that is in reasonable condition and priced right.

LH: The area that seems to be doing really well with homes selling very quickly is Shreveport's southeast area.

JC: North and South Bossier, Benton and Haughton are popular areas. Homes in Stonewall and off the Southern Loop are popular as well.

318: Many people are saying this is a seller's market? Is it?

TM: Sellers are, in many instances, driving the market now. With inventory tight, those people who are in a position to sell find they have more leverage considering the high number of families looking to move to our area. Buyers should be prepared to have all their proverbial ducks in a row when submitting an offer. I have had buyers message me on Facebook, send letters and even reach out to the seller to gain a slight advantage. However, buyers should know that in some instances, this could be considered a violation of the equal housing act, and they should consult with their Realtor before contacting a seller outside of their agent.

MSP: Yes, because they are getting over (asking price) with little to no repairs in some cases.

LH: I consider it a seller's market because our overall inventory has decreased with a lower supply and higher demand.

JC: It is a smokin' hot seller's market! If we have less than a six-month supply of homes, it's a seller's market. We cur rently have only a two-month supply of homes.

318: Do you find more people (empty nesters) downsizing, or are people trending to buying bigger properties?

TM: In our market, which generally sees little new industry moving to the area, the market is typically neutral. There are always people upsizing, downsizing for various life changes which affect all of us. Currently, it seems many people who, for whatever reason, did not move during the pandemic are re-evaluating what is important to them and moving to realign what they perceive as important lifestyle factors. This is smart on one hand as rates are low … but difficult as if you sell at the top of the market, you generally have to also buy at the top of the market. What I find most encouraging is people feel secure in their job and their future.

MSP: It is a mix.

LH: I find that more people are downsizing (empty nesters), but again, I have enjoyed having new clients moving into Shreveport.

JC: My clients are about 50/50. I've also had some clients buying very nice rental properties as investments with the low interest rates.

318: Where does new construction factor?

TM: New construction is tight. We do not have many production builders in our area, and the individual builders are affected to a greater degree regarding labor and material costs. I am currently recommending that my builders do not put their new construction on the market until it is complete due to high fluctuations in costs that individual builders cannot predict. MSP: I don't think it factors because of the cost of lumber and the time it takes to build a new house.

LH: I have clients who were in the process of getting estimates to build new construction that have changed their minds because the cost of materials and lumber has increased. They have bought an existing home instead of building once they had estimates.

JC: New construction is still standing strong, although lumber prices have skyrocketed. The low interest rates and shortage of existing homes have made new construction still a viable option; although, nationwide, the average cost of a new construction home has increased about $36,000.

318: What do you think is mostly driving this market?

TM: Barksdale and Willis-Knighton always drive Bossier City. Traffic issues in Bossier City tend to move some people to Shreveport. Perceived safety issues drive some movement in the Shreveport market. People are moving away from areas they perceive as unsafe. Schools are also a big motivator for people that have families. As our area is a general neutral market, most of the movement is generated by local families upsizing and others downsizing. Divorce and marriage are prime motivating factors regarding local relocation.

MSP: People being locked in their houses for over a year and the interest rates are super low right now. Instead of a baby boom, we have a house boom.

LH: I think very low interest rates are mostly driving the current market. I also think Covid gave folks a new perspective on spending more time in their home, so they are making a change to a home that fits their specific needs (working at home, etc.).

JC: Millenials are buying their first homes, and the historically low mortgage rates are a great motivator for all buyers. New home sales have decreased due to the increased price of construction, which has knocked some buyers out of that market.

318: How many buyers cite low interest rates as their reason for buying?

TM: Most people do not cite low rates as a reason for moving per se. Rates have been low for several years now, and most people have already taken advantage of rates. Rates do continue, however, to remain a positive incentive to move because people tend to have a fear of missing out regarding rates.

MSP: Half of them.

JC: Most local buyers claim the low interest rates fueled their drive to buy. It has also enabled them to buy more expensive homes.

318: Did COVID have impact on local real estate dollar sales?

TM: In my experience, it did not. We had a larger year in 2020 than we did in 2019. During the start of the pandemic, I was like many business owners, fearful of what was around the corner. I think the stimulus brought by the federal government eased most of those concerns, and in the end, we had no decline in overall sales volume versus previous years.

MSP: No, my business doubled, and I had my best year. I sold 74 houses after selling 50-plus the year before.

JC: Initially, the quarantine slowed local sales for a few months; however, they began to rebound, and now homes are often selling for over list price with multiple offers and selling quickly.

318: Do any customers point to stimulus money as a motivator for buying?

TM: Most people do not mention this as a reason or motivation for buying. But I feel that the stimulus created an overall environment that calmed people's fears and allowed them to feel safe in their future. A positive outlook about future expectations is, in my opinion, the largest motivator to deciding on a new home.

MSP: No.

LH: I haven't had any clients that mentioned having stimulus money to assist with their purchase.

JC: Possibly, but not any of my clients.

318: So far in 2021, is the year meeting your expectations?

TM: Our expectations are being exceeded. So far, in 2021, our volume has nearly doubled since the same time last year. As of today, our team has sold over $125 million in sales volume.

MSP: Yes, another record year.

LH: 2021 is over-exceeding my expectations. The market changes year to year, but this year has been exceptional.

JC: 2021 has been great thus far and should continue to be an excellent year. Thank you, God!

318: On a scale of 1-10, what is your projection for the local market for the next 12 months?

TM: I predict that new construc- tion will continue to be tight due to increased costs in both labor and ma- terials. Inflation is expected to subside, but prices will continue to increase until supply markets stabilize if it does not. The existing market will likely cool somewhat, and I am beginning to see the start of this, but I expect it to re- main a seller's market overall. The most significant variable in this equation is the REO (Real Estate Owned) market. Currently, there is a federal morato- rium on foreclosures. The foreclosure market is a vital portion of our real estate ecosystem. Until this part of the market is allowed to return to normal, no one can accurately predict the future overall local market.

MSP: 10. It's insane.

LH: I think the overall market activity will begin to slow down. It already seems to be slowing at this time, which is typical for this time of year with summertime and vacations, etc.

JC: I'm optimistic about the market for the next 12 months. Most predict interest rates will stay low and that the market will become more balanced; however, home prices will most likely continue to rise. More homes are currently on the market than one month ago, and that trend should continue. New construction will do well; however, existing-home sales will remain strong with the high price of lumber. Thank goodness rent prices are high as well to motivate first-time buyers and repeat buyers to buy. It's still much cheaper to own than rent. Many of my buyers initially contacted me to help them find a rental, but we discovered they qualified to buy, and they are now homeowners.

Lisa Hargrove

Coldwell Banker Gosslee

Lisa is one of Shreveport's premier residential real estate professionals, with a well-deserved reputation for hard work, organization and persistence. Delivering passion, professionalism and commitment to every transaction, regardless of the size, Hargrove has been with Coldwell Banker Gosslee for 30 years.

Contact Hargrove at 318.393.1003

Judy Candella

Aspire Realty, LLC

Judy decided after working as a registered nurse for many years to begin helping others in a different profession as a Realtor. Whether working with a buyer, seller or investor, Candella believes the client comes first and finds joy in helping others find their perfect real estate deal.

Contact Candella at 318.617.2002

Tammi Montgomery

ReMax Real Estate Services Tammi is the number one-ranked Realtor in Louisiana, with sales over the last 12 months exceeding $186 million. For perspective, this area's number two-ranked agent's previous 12-month sales are $43 million. Montgomery has sold 214 properties so far this year and closed 426 in the past 12 months.

Contact Montgomery at 318.540.6108

Micheal Sean Powell

MSP Group

Michael is the founder and owner of MSP Group.

Contact Powell at 318.218.1716

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