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.
©2009 by Don Stern - All Rights Reserved
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