Ascension Parish Real Estate Market Update - April 2008

This update examines the condition of the real estate market in Ascension parish. For the purposes of this analysis, data for detached single family homes in Ascension Parish that was extracted from the Greater Baton Rouge Association of Realtors MLS database was used. Sales recorded through April 2008 are included in the analysis as well as the inventory of active listings as of 5/5. The data and my subsequent analysis, while deemed reliable, is not guaranteed.

The average price of a home in Ascension parish has shown only modest growth so far in 2008. Given the falling home values in many other areas of the nation, this is great news for Ascension homeowners. The following chart tracks average home prices in the parish differentiation between new construction and homes in the re-sale market segment.

Looking at unit sales in Ascension we can see that the re-sale market segment is quite healthy. In fact, unit sales in this market segment were greater in April 2008 than in April 2007. It's quite a different story for the new construction market. Sales of new construction in April of 2008 was less than half that of April 2007. The following chart tracks unit sales of both market segments over time.

If we look at absorption rates for re-sale homes, as in the next chart, we can see that 59% of all homes sales during 2008 has been for homes selling for $200,000 and below and that in these more affordable price ranges the inventory levels are such that it is clearly a seller's market. As one gets into the higher price ranges it becomes a buyer's market but not substantially so until home prices exceed $350,000. Overall the absorption rate for parish homes in this market segment is already greater than that in 2003 and 2004.

For new construction, on the other hand there is more than eleven months of inventory overall. As the next chart shows, supply and demand are nearly balanced only in the narrow price range of $151K-200K. It is a buyer's market, in varying degrees, in all other price ranges. The highest velocity of home sales was in the price ranges encompassing $150,000 up to $300,000. Seventy three percent (73%) of all new homes sold between January through April of this year have been in this price range.

If we look at the same new construction data and examine the selling price per square foot (as in the next chart) rather than the selling price, we can observe a few things. Immediately we notice that the majority (over 80%) of new homes sold were priced in the range between $100/sq.ft. and $139.99/sq.ft. Under $120/sq.ft. a seller's market exists while homes priced over $130/sq.ft. are in a buyer's market. Between $120/sq.ft. and $130/sq.ft. there is a 7-month supply... technically a buyer's market but only just.

If one looks only at 2008 sales and plots unit sales for different sizes of homes in the various price ranges something interesting emerges. We can see peaks in unit sales for smaller homes (under 2000 sq.ft.) priced between $150,000 and $200,000. These would be homes prices around $110/sq.ft. Homes between $200,000 and $250,000 have peaks in unit sales between 1500 sq.ft. and 2500 sq.ft. of living area and these too would be priced around $110/sq.ft. The largest single peak is for homes priced between $250K and $300K which contain between 2000 and 2500 sq.ft. in living area. These homes are generally priced in the $120-129.99/sq.ft. range.

It is generally the smaller custom home builders pricing homes over $120/sq.ft. and, in many of the newer subdivisions, we see homes priced over $130/sq/ft. While there is a small but steady demand for homes in the $130-140/sq.ft. range once the price exceeds $140/sq.ft. the demand drops off dramatically. Unfortunately for home builders, but perhaps giving home buyers an advantage, there is more supply than demand for homes priced over $130/sq.ft.

Please feel free to contact me with any questions you may have about this report or if you'd like to discuss representation in buying, selling or building a home.

As always, I welcome readers to visit my websites at www.DonAndAlishaStern.com, www.TheHomeVendor.com, www.LiveAscension.com or www.PelicanPointHomes.net for real estate information about and to search for homes within the Greater Baton Rouge area. Click here to search for homes.

Contact me via e-mail or call me at (225) 413-3624 for more information.

©2008 by Don Stern - All Rights Reserved