Ascension Parish Real Estate Market Report

2009 Mid-year Report

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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