Geismar LA Housing Shortgage under $200K AND Why Builders Aren't Entering Market?
Locationally, Geismar is a fantastic market close to Interstate 10 and home buyers have voted with their pocketbook, or their banks, to call it home. YES, there's a definite shortage of available housing under $200,000 and builders aren't likely to enter this market to fill that shortage because of available land in flood zones.
MY ADVICE IS DON'T BUY A HOME IN A KNOWN FLOOD ZONE!
So, I'm working on a Geismar Louisiana Home Appraisals in Rivergate Subdivision, located off Highway 73 and very near Interstate 10. Homes in Rivergate are in 1,500sf to 1,650sf range, built in 2005-2006 and valued in $182,000 to $192,000 range. It was a difficult appraisal assignment because mortgage underwriters, in Suburban locations, demand sold comps, or comparable sales, be located within 1 mile and sold within 90 to 120 days. I WAS NOT able to include enough sold comps to meet these requirements for lack of recent sold comps. Why? Basically because of low supply and homeowners choosing not to sell, not to upgrade and remain in their homes!
ONLY ONE (1) COMPETING LISTING!
Mortgage Underwriters also prefer Ascension Parish Home Appraisers to use 2 to 3 competing listings in an appraisal. Well, I was only able to find one (1) competing listing in the Geismar housing market. Why? Again, because of the shortage of available housing.
Potential Competing Geismar Subdivisions
For Rivergate, I was able to use sold comps in nearby Dutchtown Villas, although it appears overall predominant values or sales prices are slightly lower than in Rivergate. The Highlands At Dutchtown is also comparable but has almost no sales activity in the past 6 months.
WHY AREN'T BUILDERS ENTERIING THE GEISMAR MARKET?
My reasoning is this: It's a fairly small market land size wise and much of Geismar is located in Flood Zone "AE" meaning higher future flood insurance premiums based on Biggert-Waters 2013 Act. Based on this act, a local Mortgage loan officer stated a $140,000 would carry a $3,358 per year flood insurance premium, which is certainly a hindrance to any smart buyer. This same loan officer stated a buyer could afford much more home located outside a flood zone. In the future, "SMART DEVELOPERS AND BUILDERS" will develop and build homes outside of flood zones and "SMART BUYERS" will buy homes outside of flood zones.
Much of Rivergate is in flood zone. Almost 100% of Parks At Dutchtown is in flood zone.
But Bill, there's Bipartisan Legislation to fix this flood issue. Really? I believe it's just a bandaid fix and some believe this attempt to delay reform for 4 years won't come to a vote. MY ADVICE IS DON'T BUY A HOME IN A KNOWN FLOOD ZONE! I wrote about this here: Baton Rouge Home Buyers Benefit In 4 Yr Delay New Flood Insurance Rates
GEISMAR'S HIGH HOME PRICES
The Geismar area housing blew my mind after Hurricane Katrina based merely on how much locals were willing to pay for housing. While some would think I wouldn't want to live in Geismar because of how far it is to work in Baton Rouge and I-10 is a traffic nightmare, Geismar is the perfect location for area Industrial and Chemical Plant Workers via Highways 74 and 30. Homes in Legacy Hills in the $400's? Oak Alley in high $300's to $400's? Even in Moss Pointe you'll pay $280K to $300K for 2,000sf new homes, around $141/sf. ALL I'M SAYING IS THAT HOME PRICES ARE HIGH BASED ON A TOWN WITH ONLY A NEWER HIGH SCHOOL, A WALGREENS, A FEW RETAIL STORES AND RESTAURANTS. But, this has been enough to draw hundreds of home buyers to Geismar.
NOTE: Based on information from Greater Baton Rouge Association of REALTORS®\MLS for period 01/01/2012 to 11/14/2013, extracted on 11/14/2013.
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