Recently, there have been a number of articles in the media about the rising number of foreclosures. Indeed, three of the real estate transactions that I am currently working myself are for bank owned properties. Unlike some other areas of the country, the Greater Baton Rouge real estate market has not seen a dramatic drop in home prices which is common for areas with an increasing number of bank foreclosures. I was thinking about this apparent contradiction on the way home from church this morning and decided to do some analysis.
I extracted a subset of data from the Greater Baton Rouge Association of Realtors MLS system. That subset included Residential properties (homes) which were identified as REO (Real Estate Owned or Bank Owned) properties which were listed between January 1, 2004 and August 23, 2009. In my opinion, some interesting things came out of my analysis. I created two charts both shown below. The first shows the number of bank foreclosures listed in the MLS over the time period examined.
In the period between 1/1/2004 and 5/31/2005, an average of about 116 bank owned properties were listed each month. Since 6/1/2005 that average dropped to 68 homes per month. Other observations are that in May of 2005 the number of bank owned listings spiked to 216. In the months after Hurricane Katrina the number of foreclosed homes listed dropped substantially. I would hypothesize that, after Katrina, the demand for housing was so high that people were able to sell their homes prior to being foreclosed upon. The rate of bank owned listings being added to the system has remained lower than that observed prior to June 2005.
The second chart examines the same data set but further restricts it to just those REO properties in the Tri-Parish Area (Ascension, East Baton Rouge, and Livingston Parishes.)
It appears to this author like all three parishes follow the same overall trends. Ascension and Livingston see foreclosure listings added at about the same rate. The anomalous spike in May 2005 was less pronounced in Ascension than in either Livingston or East Baton Rouge Parishes.
In conclusion, I would venture the opinion that foreclosures have not had the impact upon home prices in our area that other areas of our country have seen. Furthermore, since the rate of foreclosed listings remains low, I would not expect additional downward pressure on prices directly due to foreclosures. I do believe that downward pressure in our area is do more to the indirect effect that national foreclosures have had upon the availability of credit.
I would be very interested to hear different interpretations of these observations and would welcome comments.
©2009 by Don Stern - All Rights Reserved
(225)413-3634 phone (225)313-3698 fax
don@thehomevendor.com - email
www.TheHomeVendor.com www.DonAndAlishaStern.com www.LiveAscension.com www.PelicanPointHomes.com www.WaterfrontPropertyLA.com
This post deals with new construction in the tri-parish (Ascension, East Baton Rouge, and Livingston) area. The data used for this report were extracted from the Greater Baton Rouge Association of Realtors MLS database. Only data relating to detached single family (DSF) homes were extracted. For sales data new construction data were identified as those records having a status of New, Under Construction or Proposed Construction. Current inventory for new construction included only those records having a status of New or Under Construction.
Looking at the next three charts we can see the average selling price per square foot of living area for each of the three parishes. In 2009, new construction in Ascension parish sold for an average of $114.87/sq.ft. which is down 4.6% from 2008 where the price per square foot peaked at $120.37/sq.ft. In East Baton Rouge parish new construction sold for $130.25/sq.ft. in 2009 which is up $1.05 from sales in 2008. Livingston parish saw a modest decline in the price of new construction of $0.48/sq.ft. from a high of $105.05/sq.ft. in 2008 to $104.57/sq.ft. in 2009. A statistically negligible decline.
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>The next three charts show the new construction breakdown in each of the three parishes by subdivision.
| Parish | Subdivision | 2009 Unit Sales |
| Ascension | Pecan Ridge | 34 |
| East Baton Rogue | Lakes at Jamestown | 33 |
| Ascension | Keystone of Galvez | 26 |
| Ascension | Gateway Cove | 21 |
| Livingston | Lake at Grays Creek | 21 |
Anyone wishing to discuss this analysis in more detail or to request additional analyses are encouraged to contact me. Additionally, I welcome any comments or suggestions for improvement.
©2009 by Don Stern - All Rights Reserved
(225)413-3634 phone (225)313-3698 fax
don@thehomevendor.com - email
www.TheHomeVendor.com www.DonAndAlishaStern.com www.LiveAscension.com www.PelicanPointHomes.com www.WaterfrontPropertyLA.com
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. None of the townhome sales were included in this analysis as they represent a different product. As I have done in the past, I made a distinction between new construction and previously owned (re-sale) homes.
Seasonality continues to impact unit sales in the parish as we observe an overall increase in unit sales for June. The increase, however, is due to an increase in the sales of previously owned homes. New construction sales actually declined from thirty nine sales in May to thirty six sales in June.
Overall unit sales in both market segments are projected to be at five year lows. The following chart illustrates this observation.
The next chart illustrates a significant decline in the average selling price of a new home in the parish. The average selling price per square foot of living area for a new home remained stable which means that the drop in home prices is attributable to the fact that in 2009 smaller homes have been purchased. Prices of previously owned homes have remained relatively flat between 2008 and 2009.
Overall, there is a 5.6 month supply of new construction in the parish that conventional wisdom terms a neutral market (5.5-6.5 months supply.) Looking at different price ranges, as in the following chart, we see that a seller's market (
Comments and suggestions are encouraged. Readers wishing to have a more in-depth discussion welcome to contact me directly.
©2009 by Don Stern - All Rights Reserved
(225)413-3634 phone (225)313-3698 fax
don@thehomevendor.com - email
www.TheHomeVendor.com www.DonAndAlishaStern.com www.LiveAscension.com www.PelicanPointHomes.com www.WaterfrontPropertyLA.com
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. None of the townhome sales were included in this analysis as they represent a different product. As I have done in the past, I made a distinction between new construction and previously owned (re-sale) homes.
While the projected overall unit sales in Pelican Point are down from 2008, we can see improvement in new construction units sold. Sales of previously owned homes are down from last year but, at current absorption rates, will be ahead of sales in the pre-Katrina year of 2004. The following chart illustrates this point.
Overall, previously owned homes in the subdivision have held their value. The average price per square foot of living area has held at $121.56/sq.ft. This is about even with 2008 sales but down from the selling prices in the years immediately following hurricane Katrina. At $121.56, however, homes are selling well ahead of pre-Katrina prices. Homes in Pelican Point are diverse but, in general, similar homes are on a given street. For that reason, I've analyzed the re-sale data by looking at sales by street. The following chart shows selling $/sq.ft. and unit sales by street.
The next chart again shows that re-sale prices have held steady between 2008 and 2009. New construction prices, however, have declined a bit from the high seen in 2008 but have remained higher than the average $/sq.ft. for the years 2004-2007.
Fewer than 2 homes per month are being sold in the re-sale market segment. With 29 homes currently listed, it is clearly a buyer's market. At current absorption rates there is a 15.8 month supply as the next chart illustrates.
The new construction segment has a 9.6 month supply at the current absorption rate of 0.8 homes per month. Drilling down through price range, one can see that so far this year no homes over $400K have been sold yet there are four available. I would encourage builders to refrain from building homes in this price range until the market for them rebounds.
Comments and suggestions are encouraged. Readers wishing to have a more in-depth discussion welcome to contact me directly.
©2009 by Don Stern - All Rights Reserved
(225)413-3634 phone (225)313-3698 fax
don@thehomevendor.com - email
www.TheHomeVendor.com www.DonAndAlishaStern.com www.LiveAscension.com www.PelicanPointHomes.com www.WaterfrontPropertyLA.com
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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Comments and suggestions are encouraged. Readers wishing to have a more in-depth discussion welcome to contact me directly.
©2009 by Don Stern - All Rights Reserved
(225)413-3634 phone (225)313-3698 fax
don@thehomevendor.com - email
www.TheHomeVendor.com www.DonAndAlishaStern.com www.LiveAscension.com www.PelicanPointHomes.com www.WaterfrontPropertyLA.com
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