Ascension Parish Real Estate Market Report

Through August 2009

The following analysis is based upon data extracted from the Greater Baton Rouge Association of Realtors MLS database. Only data for detached single family (DSF) dwellings were considered.

Two thirds of the way through 2009, the market for homes in Ascension parish is quite healthy. My own experience and conversations with other real estate professionals point to finance as the biggest obstacle in the way of further market expansion. That said, our market is, for the most part, vibrant and has weathered the national economic downturn quite well.

The first four charts below present unit sales information in a variety of ways. The first chart plots unit sales of new homes and previously owned homes on a monthly basis since January 1, 2004. The light green line shows overall monthly sales while the heavy green line shows the six month moving average.

The next chart aggregates the data by year and, for 2009, the a simple linear projection is made of what 2009 year-end sales will be. Year-to-date sales through August were calculated then divided by 8 months to get the monthly average and then multiplied by 12 to project year-end unit sales. This chart shows that, overall, 2009 should outperform 2008 with 1217 sales versus 1116 in 2008. New construction sales are responsible for the increase with a projected 491 sales versus 359 in 2008. Sales of previously owned homes are projected to be a bit less in 2009, 726 in 2009 versus 757 in 2008.

The next two charts illustrate monthly sales. The first shows new construction and we see that, as has been typical throughout the year, sales of new construction in 2009 has outperformed the same month in 2008.

The next two charts illustrate the absorption of homes in Ascension Parish by price range and compares absorption rates to current inventory to project the months supply of inventory. A market with 5.5 to 6.5 months supply is generally considered a neutral market... The supply and demand are reasonably balanced. A market with less than 5.5 months supply is generally considered to be a Seller's Market while a market with more than 6.5 months supply is said to be a Buyer's Market.

The first chart shows the absorption statistics for new construction. Overall, we have a Seller's Market condition with only 3.4 month supply. In fact, only homes priced over $350K are experiencing a Buyer's Market. The highest velocity of new home sales is for homes priced between $150K and $200K. Forty percent of all new homes sold in the parish during 2009 have been in this price range.

In the previously owned market segment, there is overall a 6.7 month supply... just slightly in Buyer's Market territory. Upon closer examination, however, we can see that this is due to an oversupply of more expensive homes. Homes priced over $300K account for 34% of the inventory but only 14% of home sales. Homes priced below $300K are generally moving well with respect to inventory.

As always comments and/or suggestions for improvements are welcomed.

©2009 by Don Stern - All Rights Reserved

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