Why Foreclosures In Greater Baton Rouge Real Estate Are A Serious Concern!
This is a series of Five (5) total articles with accompanying videos posted to “Foreclosure Studies” category. This is article One (1) covering entire Greater Baton Rouge market. The other Four (4) cover the 4 Parishes within GBR market and are found within this category.
Ever since the national real estate meltdown began in 2007, there’s been a local perception of foreclosures impacting Greater Baton Rouge Housing, the perception appearing greater than the reality of the numbers. This is why I’m publishing this data because perception is that the problem is much greater than it really is. There’s no doubt that GBR Housing has been impacted by a housing “correction”, meaning some prices in some subdivisions have declined, but not evenly and not in all markets.
On 10/15/2011, local Real Estate Agent, Don Stern, posted this below on his Facebook status. Don is a numbers guy, knows the local numbers and is one of most competent professionals locally to crunch those numbers to create highly impressive housing charts. I knew if he was posting this I should pay attention. Don stated, “Excluding distressed sales CoreLogic August Home Price Index (year-over-year change) shows that Louisiana home prices are up 2.5%”. “Distressed Sales” have been on the minds of locals for years now. It was Don’s post that prompted this study and I do publicly thank him here. Don is also an excellent professional photographer for Agent Listings.
NOTE: REO is real estate owned or bank owned foreclosure. GBR is Greater Baton Rouge and includes EBR, WLIV, ASC and WBR. EBR is East Baton Rouge Parish. ASC is Ascension Parish. WLIV is Western Livingston Parish areas 81,82,83. WBR is West Baton Rouge Parish. See detailed GBRMLS parameters at bottom, which are generally from 06/01/2010 to 11/05/2011, All residential properties.
The Keller Williams “This Month in Real Estate (US) October 2011” Video reports that, based on NAR Numbers, the National Median Home Price is now $168,000, which is fairly close to the Baton Rouge area median as well!
Preface….We’re In a $170,000+/- housing market and 74% of Foreclosures Are Under $150,000! Various online sources tell us that median sales price in Baton Rouge is $172,750 (Trulia.com). Zillow.com states average listing price as $163,000. Altos Research reports median sales price of $169,035, see their chart below, and chart showing sharp, very obvious and undeniable correction still taking place. GBRMLS reports the average 2011 sales price for ALL homes in EBR, LIV, ASC and OTHER as $192,504 YTD, down from $196,428 for 2010 or -2%. Point is that majority of local housing activity takes place in $172,500 to $192,500 price ranges and that 74% of REO or Foreclosure activity of under $150,000 isn’t absolutely a problem for the majority of market! That’s Right! Currently, 74% of current foreclosure listings inventory is priced below $150,000. And, REO Solds percentages for EBR, ASC, LIV and WBR have been 81%, 57%, 82% and 75% respectively priced under $150,000.
East Baton Rouge Parish, experiencing the most local REO problems with 498 REO home sales under $100K, illustrates how lopsided the results. In EBRP, 61% of the 821 REO Sales here under $100K and concentrated in neighborhoods not necessarily where the majority of EBR residents live. This chart below shows of all current GBRMLS listings, only 9% are REOs and that of that 9%, 38% of those are pending leaving 62% still active. So, out of 4,928 local listings, only 292 are available as REOs.
HOW MANY FORECLOSURES SOLD? REO Solds for ALL 4 Parishes total 1320 or 16% of ALL Sales. EBR had 821, ASC 200, WLIV 272 and WBR 27 REO Sales. Yes, while EBR does have the larger percentage of sales, it’s also a vastly larger market than surrounding Parishes.
REO LISTINGS ONLY TOTAL 9% OF LISTING INVENTORY. REO Listings only make up 8% of total listings and 38% of them are pending. Of the total 4,928 total listings, 473 or 9% are REO listings. Of those 473 listings, 181 are pending or 38%, which is good news. Only 62% of REO Listings inventory is available and not pending or under contract for purchase yet.
WHAT’S THE SIGNIFICANCE OF THIS STUDY AND REALITY TO BATON ROUGE HOUSING? The significance is that whether a local Home Appraiser is appraising or Real Estate Agent is marketing a home in Tara, Shenandoah, Oak Hills or Santa Maria, the GBR REO situation generally doesn’t apply to those markets.
CHARTS BELOW. These Charts below illustrate that the majority of GBR foreclosure sales have taken place under $150,000.
NOTE: Based on information from the Greater Baton Rouge Association of REALTORS®\MLS for the period of June 1, 2010 to November 5, 2011. This information was extracted on 11/05/2011.