This mid-year report is the result of my analysis of data retrieved from the Greater Baton Rouge Association of Realtors MLS
database. Only data relating to detached single family (DSF) homes were included. As I have done in the past, a distinction was
made between new construction and previously owned (re-sale) homes.
Unit sales have continued to improved as indicated by the next chart. Sales of new construction are projected in 2009 to exceed sales
of new construction in 2008. While recent improvements have been observed, home sales in the re-sale market segment are lagging
behind those in 2008 but have rebounded to pre-Katrina levels.
The following chart tracks unit sales of new construction by month and year. One can see that new construction sales in 2009 have
exceeded those in 2008 for every month so far this year.
While off to a slow start, previously owned home sales during June of this year exceeded those of June in 2008 and for every month
except May exceeded the corresponding month in 2004.
Through June, we can see in the following chart that the average price of previously owned homes sold in the parish have not declined.
The average price of a new home sold, however, has seen a substantial drop.
The explanation for this drop in the average price of a new home sold is made clear in the following chart which shows new construction
sales by subdivision. Only the top 12 subdivision are shown but these twelve account for nearly 60% of home sales.
It is evident that most new home sales were in subdivisions where homes with a limited number of floor plans and a generally lower
standard of amenities than we have seen in years past are built.
We have been selling through the inventory of new construction in the parish. The following chart shows that, overall, there is only
a 3.8 month supply of new homes... a seller's market overall. Looking at absorption data by price range we can see that a seller's
market condition (less than 5.5 month supply) exists for all price ranges up to $400K. The absorption rate and inventory levels of homes selling for
$400K and up, on the other hand, result in a serious buyer's market with more than a 20-month supply.
In the re-sale market segment there is, overall, a 6.4 month supply... a neutral market. Drilling down through the data, we can see
that a seller's market condition exists for homes selling up to $200K. Over $200K, a buyer's market condition exists and for
previously owned homes selling for more than $400K there are more than 3 years worth of inventory at current the current absorption rate.
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Comments and suggestions are encouraged. Readers wishing to have a more in-depth discussion welcome to contact me directly.
East Baton Rouge Parish Residential Real Estate Market Analysis - May 2009
The information presented in this post is based upon data extracted from the Greater Baton Rouge Association of Realtors MLS database.
For the purposes of my analysis, I included data for detached single family dwellings which sold in East Baton Rouge parish for the years 2004 through
May 2009. I identified the home sales as either New Construction or Re-Sale because, in my experience, they have distinct characteristics.
Although seasonality effects are obvious, overall unit sales in the parish have been trending downward since hurricane Katrina as the following chart illustrates.
Currently, unit sales volume for both new construction and for previously owned homes are at 5-year lows.
Looking specifically, at May unit sales for 2009 and for the previous five years we can see that homes in both market segments are at historic lows, at least
for the five year period examined.
A simple linear calculation of unit sales through the end of 2009 projects that new construction will be down nearly 8% while previously owned new homes will be down by
about 12%.
The next chart illustrates that the average price of a previously owned home sold during 2009 is 6.5% lower than in 2008. New construction
prices are also down buy by a more modest 3.5%.
Overall the supply of homes is more or less balanced by the demand. Based upon the average absorption rate of homes during 2009, there is a six-month
supply making it a neutral market. If one looks at different price ranges, however, different conclusions can be drawn. A sellers market
condition exists for homes priced below $250K while a buyers market condition exists for homes priced over $300K. For homes priced
over $400K there is more than a 20-month supply based upon the average absorption rate for 2009.
Readers are encouraged to comment with questions or suggestions for improvement. Anyone interested in exploring the possibility of buying or selling
property is welcomed to call or e-mail me.
Ascension Parish Residential Real Estate Market Analysis - May 2009
The information presented in this post is based upon data extracted from the Greater Baton Rouge Association of Realtors MLS database.
For the purposes of my analysis, I included data for detached single family dwellings which sold in Ascension parish for the years 2004 through
May 2009. I identified the home sales as either New Construction or Re-Sale because, in my experience, they have distinct characteristics.
The real estate news in Ascension parish is mixed but, in my opinion, generally good news. As the following chart illustrates, seasonality
is taking effect as we move toward the historically favorable summer selling months. Unit sales of previously owned homes, although
lower than last year are at levels similar to pre-Katrina levels.
Average home prices have declined as the next chart illustrates. With respect to new home prices, the drop is due primarily to a shift in what
is being purchased rather than a drop in value. More affordable homes are being purchased. The most successful subdivisions are those
which offer a limited number of floor plans with a lower standard of amenities than was the trend a just a few years back.
the average price of a previously owned home has receded somewhat but only about 2-4%.
Although lower than the years immediately before and after Katrina, unit sales of new homes is improving. In fact, every month in 2009
saw more new homes sold than in every corresponding month of 2008.
The next chart illustrates the price point of new homes sold during 2009. We can see a dense cluster of homes sold between about $160K and $215K which were
priced at or below $110/sq.ft. of living area. A significant number of homes were also sold at higher prices and price points but the drop
in average price and average price per square foot illustrates the trend toward more affordable homes.
The really good news in the new home market is that inventories are being sold out. We previously reported that at the end of 2008 there was
an 8.2 month supply of new homes in the parish. As the following chart illustrates, that has dropped to 4.2 months as of the end of May.
It is a seller's market condition in most price ranges. The only area of deep concern is for homes priced at $400K and up where there is
a 20 month supply. While there are five fewer homes in inventory today (20) than there were at the end of 2008, the rate of sales for
these homes has dropped significantly from 2.3 homes per month in 2008 to only 1 per month on average during 2009.
The re-sale (previously owned homes) market statistics are similar to what was observed at the end of 2008. At that time we reported 385 homes
available representing a 6.1 month supply at the average absorption rate for 2008. As of the end of May, we have 361 homes available representing
a 6.5 month supply at the average absorption rate for 2009. Fewer homes per month are being sold but, as we saw earlier, we are just entering
the peak selling season.
There is an oversupply situation with respect to the higher priced homes. In fact, at current absorption rates there is more than a four year
supply of homes priced at $400K and above.
Readers are encouraged to comment with questions or suggestions for improvement. Anyone interested in exploring the possibility of buying or selling
property is welcomed to call or e-mail me.
Livingston Parish Residential Real Estate Market Update- February 2009
The information presented in this post is based upon data extracted from the Greater Baton Rouge Association of Realtors MLS database.
For the purposes of my analysis, I included data for detached single family dwellings which sold in Livingston parish for the years 2004 through
February 2009. I identified the home sales as either New Construction or Re-Sale because, in my experience, they have distinct characteristics.
The following chart plots unit sales of new construction and pre-owned homes (the bars) as well as overall unit sales and the six-month moving average of
overall unit sales. We can see a generally downward trend in unit sales beginning in mid-2007. Examining more closely we can see that previously owned home
unit sales have retracted to pre-Katrina levels for this time of year but that new construction unit sales has dropped below pre-Katrina levels.
Examining the absorption chart by price/sq.ft. for homes in the re-sale market segment we can see that overall a buyer's market exist but that for
homes priced below $110/sq.ft. a seller's market exists. This is in the range where the highest velocity of home sales occurs.
In the new home segment, we observe that nearly half of the homes sold since the beginning of the year (8.5 out of 18) were priced below $100/sq.ft. and that in this
range a seller's market exists. At all other price points buyer's market conditions persist.
The following chart shows the history of average home prices in the parish since 2004. We can see that between 2008 and 2009 the average price of a new
home sold dropped over 7%. The average price of a previously owned home also dropped but only very slightly. Re-sale homes appear to be holding their
value.
The next chart examines new construction by subdivision. We can see that for most subdivisions where home sales have occurred, a seller's market or near neutral market
exists. We can also see that a significant amount (over 60%) of inventory exists in subdivisions for which no home sales have occurred this year.
Based upon this analysis, I believe that in Livingston parish, the market for affordable housing is in pretty good shape overall. There are some serious issues
with respect to new construction but they seem to be related to price and location and a prudent home buyer could do quite well.
East Baton Rouge Parish Residential Real Estate Market Update- February 2009
The information presented in this post is based upon data extracted from the Greater Baton Rouge Association of Realtors MLS database.
For the purposes of my analysis, I included data for detached single family dwellings which sold in Ascension parish for the years 2004 through
February 2009. I identified the home sales as either New Construction or Re-Sale because, in my experience, they have distinct characteristics.
The next chart shows the history of Average home prices in East Baton Rouge Parish separating new construction from previously owned homes. The average
home price over the first two months of 2009 shows a drop from the 2008 average of about 6% for new construction and about 3% for homes in the resale
market segment.
If one looks at the average selling price per square foot of living area, however, new construction dropped only about 1.8% while homes in the resale
segment dropped nearly 3.9%
Unit sales are at near historic low points. There has been a more or less steady drop in unit sales since August of 2008. While much of that drop
can be attributed to the normal seasonality of the market, I believe it would be imprudent to assume that the nation's current financial crisis
has had no effect upon our market. That said, our market has fared much better than elsewhere in the country. Our prices, while down a bit have
not plummeted as in other areas. I think that the small drop in prices is more a reflection upon the inventory mix and that when pent up demand is released
and has been satisfied, that appreciation in home values will once again be observed. In the meantime, real estate seems to be a safer place for wealth than
many other investment options.
In terms of new construction absorption and inventory levels, there is currently a 7.5 month supply overall making this a buyer's market.
If we drill down through the various price ranges we can see that the problem with oversupply exists for homes priced over $400K where there is
a 21 month supply and a clear buyer's market. For price ranges below $400K a neutral market or even a seller's market exists. A shift
appears to have occured between 2008 and 2009 in terms of the velocity of home sales. The absorption rates in 2009 were highest for homes selling
for between $200K and $300K while in 2008 the highest velocity was achieved between $150K and $200K. This will bear watching in the coming months
to see if the shift persists and a trend develops.
With respect to previously owned homes the absorption chart shows something different. While overall a similar 7.7 month supply exists, a buyer's market condition
(over 6.5 months supply) market condition exists for all but the lowest price ranges where the highest velocity of home sales occurs.
Ascension Parish Residential Real Estate Market Analysis - February 2009
The information presented in this post is based upon data extracted from the Greater Baton Rouge Association of Realtors MLS database.
For the purposes of my analysis, I included data for detached single family dwellings which sold in Ascension parish for the years 2004 through
February 2009. I identified the home sales as either New Construction or Re-Sale because, in my experience, they have distinct characteristics.
The following chart shows unit sales by month since January 2004. We observe that overall (indicated by the green lines) there has been a generally
downward trend since late 2006. If one digs deeper into the data, one finds that most of this downward trend is due to a continuing drop in the
sales of new construction. This suggests the drop in new home prices is a price elasticity issue rather than due to the current economic crisis and the
restricted availability of credit. Homes in the pre-existing market space maintained their sales rate up until September of 2008 when the mortgage meltdown
occured and hurrican Gustav took a toll on the Greater Baton Rouge metro area market.
Comparing February unit sales with unit sales in February of prior years, we observe that in the re-sale market space, unit sales are more or less equivalent
to prior years (not counting February of 2006 when the positive effects of hurricane Katrina in Ascension parish were manifest). New construction,
however, remains low. One bright spot here is that new construction unit sales in February 2009 were higher than in 2008 suggesting that the decline may
be at an end and pent up demand could be ready to break loose.
In terms of pricing, average prices in both market segments were growing, or at least remaining stable, through 2008. With two months of 2009 sales recorded,
the average price of both new construction and previously owned homes has declined by about 5%.
The following chart illustrates that the drop in the average price was not due to consumers simply purchasing smaller houses because the average
selling price per square foot of living area also dropped.
For pre-owned homes, we observe an oversupply situation. Overall there is a nine-month supply. Looking more deeply into the following chart, however, we
can see that this is primarily due to oversupply of more expensive homes. Affordable housing under $200K is in a seller's market where demand is high and supply is
low.
Overall it is a buyer's market in the new construction segment. In general, however, affordable housing is in balance or exhibits characteristics of a seller's market while the
situation worsens as price increases. The highest velocity of home sales occured in the $151K-$200K price range which has accounted for 42% of new home sales in 2009 through
the end of February.
Looking at the top 10 selling subdivisions for new construction in 2009, we can see confirmation that more affordable housing is indeed selling at a higher rate.
East Baton Rouge Real Estate - Residential Market Report
East Baton Rouge Parish Residential Real Estate Market Report
My last blog entry dealt with the state of the real estate market in Livingston Parish as of the end of 2008. This post deals
with the state of the market in East Baton Rouge Parish.
The information presented in this post is based upon data extracted from the Greater Baton Rouge Association of Realtors MLS database.
For the purposes of my analysis, I included data for detached single family dwellings which sold in East Baton Rouge parish for the years 2003 through
2008. I identified the home sales as either New Construction or Re-Sale because, in my experience, they have distinct characteristics.
The following chart provides some general statistics.
The previous chart illustrates the vast difference in both the median and average home prices between new construction and existing home sales. It is also
interesting to note that both the least expensive and the most expensive home sold were in the re-sale market segment.
The average selling price of new construction continued to climb in the parish, rising about 10% between 2007 and 2008. The average selling price
of an existing home, on the other hand, remained about the same. The good news is that prices haven't fallen as in other areas of the country.
Unit sales, however, fell in both market segments and continues to trend downward. While new construction sales were off for most of the year, sales of
pre-existing homes didn't suffer until both the meltdown of the financial market and the impact of Hurricane Gustav. With low interest rates, the
first time home-buyers incentive and the general good health of the area I anticipate improvements in this market segment.
The highest velocity of new home sales occured for homes selling between $150K and $300K and in this range a seller's market exists. Overall,
however, it is a buyers market with 7.3 months supply. This is due in large measure to the oversupply of homes priced over $400K. In this category there is
more than a year's supply of homes at the 2008 average absorption rate.
For pre-existing homes, it is either a sellers or neutral market until home prices exceed $350K where there is more inventory than demand and it is a buyer's market.
I've authored a report which examines the residential real estate market for the Greater Baton Rouge metro area in much greater detail than has been
presented here. Click Here to view the table of contents for this report.
Livingston Parish Residential Real Estate Market - 2008 Year End Report
My last blog entry dealt with the state of the real estate market in Ascension Parish as of the end of 2008. This post deals
with the state of the market in Livingston Parish.
The information presented in this post is based upon data extracted from the Greater Baton Rouge Association of Realtors MLS database.
For the purposes of my analysis, I included data for detached single family dwellings which sold in Ascension parish for the years 2003 through
2008. I identified the home sales as either New Construction or Re-Sale because, in my experience, they have distinct characteristics.
The following chart provides some general statistics.
An interesting contradiction appears in this chart. Both the median selling price and the median selling price per square foot of living area
are higher for re-sale homes than for new construction but the averages of both these statistics are reversed... new construction stats are
higher than existing home statistics which we are accustomed to seeing. I believe that affordability and pricing has had a
major impact upon new construction sales. I'll look at this again later in this post when absorption rates and inventory levels are discussed.
Overall unit sales have been declining in Livingston Parish since the summer of 2007. While existing home sales peaked during the summer
of 2008, the seasonality effect didn't impact upon new home sales where sales remained flat during the summer and then continued to decline afterward.
The re-sale market remained at healthy pre-Katrina levels in terms of unit sales.
If one looks at absorption rates and inventory levels (shown in the next two charts), we can see that overall it is a neutral market for both new construction
and re-sale market segments. If one looks deeper, however, it becomes apparent that price elasticity is a factor. Most home sales
in both market segments were for homes priced under $200K. As prices increase above that it rapidly becomes a buyer's market and the velocity
of home sales diminishes rapidly.
I've authored a report which examines the residential real estate market for the Greater Baton Rouge metro area in much greater detail than has been
presented here. Click Here to view the table of contents for this report.
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Ascension Parish 2008 Year End Residential Real Estate Market Analysis
Ascension Parish 2008 Year End Residential Real Estate Market Analysis
Recent articles in the national and local press have, in my opinion, been pretty negative regarding the real estate market.
I think there is more to the story that needs telling so people can make informed decisions about the real estate market.
The information presented in this post is based upon data extracted from the Greater Baton Rouge Association of Realtors MLS database.
For the purposes of my analysis, I included data for detached single family dwellings which sold in Ascension parish for the years 2003 through
2008. I identified the home sales as either New Construction or Re-Sale because, in my experience, they have distinct characteristics.
The first parameter examined was the average sales price of a home in Ascension Parish. The following chart illustrates that prices held more or less
steady during 2008. The average home price for new construction remained about $258K while that of a previously owned home remained at about $207K.
The next four charts depict unit sales over the six-year period examined for this report. We can see the overall sales (the green lines) have, indeed,
dropped during 2008 as has been reported.
The next two charts show monthly unit sales over the same period. The first of these charts illustrate new construction unit sales only
and the second deals only with homes in the re-sale market segment.
New construction unit sales have been significantly lower throughout the year.
We can see that, for the most part, homes in the re-sale market segment have maintained sales volumes at or near pre-Katrina levels. Most of the
drop in unit sales reported in the popular media is attributable to New Construction. The re-sale market wasn't negatively affected to any significant
level until the drop attributable to the effects of hurricane Gustav in September.
If one examines the previous chart closely, one can observe that the six-month moving average of unit sales has been dropping more or less steadily
since the fall of 2006. The effects of the mortgage industry crisis are, in my opinion, only secondary with respect to New Construction. I believe
that the increase in prices of new construction following hurricane Katrina was the primary cause for the drop in volume.
I've authored a report which examines the residential real estate market for the Greater Baton Rouge metro area in much greater detail than has been
presented here. Click Here to view the table of contents for this report.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
Central A/C
;)
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