Added revenue spurs push for raises
LAFAYETTE — The real estate market in general has been hot in Lafayette Parish this year, but new construction in particular has been vibrant, with enough new homes being sold to significantly boost local tax collections.
The jump was big enough to add at least $850,000 in unanticipated property tax revenue to the Lafayette city-parish budget — a windfall the City-Parish Council used this month to push a planned 2.5 percent raise for city-parish employees up to 3.5 percent.
“A lot of homes are being added to the tax rolls,” Lafayette Parish Assessor Conrad Comeaux said. “It just reflects the booming economy.”
The assessed taxable value of all commercial and residential property in Lafayette Parish this year is up by more than $100 million over 2012, a number that represents only part of market value because it takes into account the homestead tax exemption for residential property.
Since 2007, the only comparable increases in parishwide property values were in reassessment years, when the Assessor’s Office re-evaluates the market value of all property in the parish.
The rise this year is from new properties hitting the tax rolls, not increasing value of existing property.
The growth is evident in sales numbers from the local real estate market.
There were 674 new homes sold in Lafayette Parish from January through August of this year, about 30 percent above the same period in 2012, according to a report from Coldwell Banker Pelican Real Estate using sales figures from the Realtor Association of Acadiana.
The market for new construction, like the local real estate market in general, is on track for a record year, said Steven Hebert, Coldwell Banker Pelican Real Estate chief operating officer.
The sales volume record for new construction in Lafayette Parish was set in 2006, with 854 units sold, according to figures from Hebert.
Mike Thompson, a local home builder who serves on the board of the Acadian Homebuilders Association, said the market for new construction has come back strong after dipping down a bit after 2007.
He said low unemployment and low interest rates are two driving factors.
Even though interest rates are starting to creep back up after bottoming out below 4 percent, rates are still low by historical standards, Thompson said.
He recalled interest of about 8 percent when he got his start in the 1970s, followed by rates that spiked around 17 percent before stabilizing for many years in the 7 percent to 8 percent range.
“We will never see interest rates this low again in our lifetime,” Thompson said of current mortgage interest rates.
Hebert said southern Lafayette Parish is still the hot spot for new construction sales.
For the first six months of this year, the top 10 subdivisions for new construction sales in Lafayette Parish were all in the southern region, according to a market report by Coldwell Banker.