2017 Comprehensive Year in Review: Greater Baton Rouge Real Estate
TOPICS WITHIN THIS REVIEW
In Part 1, I’m going to present housing charts and stats and discuss:
National vs Local Market
GBR Housing In Review & Charts
Annual Trends In Real Estate Event
In PART 2 and in a follow up article, I’m going to cover trends I’m seeing and experience from local Agents beyond just stats, such as:
Fewer Buyers Willing To Buy Flood-Rehabs
Inventory Is Not Low Across ALL sections of GBR AND It’s Not True To State “Sellers Market Persist” For The Entire GBR Market.
The Flood Was Not Fair To Sellers Of Homes That Didn’t Flood…When Sellers Overprice Their Non-Flooded Homes?
I’m Performing more Post-Listing Appraisal for Sellers Listing TOO HIGH
Are We In A Real Estate Bubble? My Answer is different than most…
Homeowners And Appraisers See More Eye-To-Eye In January 2018
My numbers and charts will not agree with yesterday’s The Advocate article, Baton Rouge area home sales rise 3.7 percent for 2017 because such articles generally classify Greater Baton Rouge as a nine (9) Parish market, including distant St Helena, Pointe Coupee, Iberville and East & West Feliciana. And/or, if the entire GBRMLS is included, this also include numbers from Tangipahoa. The Advocate article doesn’t describe the boundaries of search for their numbers reported. By “Greater Baton Rouge” or GBR, I’m referring to all types of single-family home sales within East Baton Rouge, West Baton Rouge, Ascension and Livington Parishes, the four (4) local closest Parishes that matter locally to Baton Rouge. By “types”, I’m referencing detacted (homes like in Shenandoah Estates, attached (condos townhomes) and manufactured or modular homes. The source for this report is GBRAR REALTORS / MLS from 01/01/2016 to 12/31/2017, extracted on various dates in 2018 after 1/12/2018.
NATIONAL VS LOCAL HOUSING MARKETS
As a Greater Baton Rouge Home Appraiser for over 23 years, I continually watch and analyze real estate markets, comparing what is happening locally as well as regionally and nationally.
Nationally, Year End 2017 News From NAR, Housingwire, Trulia And Baton Rouge Business Report Reports:
2017 was the best year for existing home sales since 2006
New home sales finish 2017 at highest level in a decade
More new homes sold last year than in any year since 2007
NAR: Existing-Home Sales Soar 5.6 Percent in November to Strongest Pace in Over a Decade
Experts 2018 set to be best economic year since housing crisis
Rent prices jumped 3.1 percent in 2017 which is why a new study says buying a home is best,
Should you buy or rent in Baton Rouge? New study says buy
It appears in many markets throughout the U.S., low inventory has been pushing prices upward as evidenced by rents increasing each year.
From National To Local – How has Greater Baton Rouge’s Housing Market Performed?
In our local markets, we’ve experienced increasing demand and what’s reported as low inventory pushing prices upward. This could be due to our better Southern economy, vibrant industrial and petrochemical industry expansion and good food! The upward trends in our markets began at the end of 2014 according to this Zillow chart below. Population growth does not appear to be the fuel pushing prices higher as the Census Bureau chart shows the Baton Rouge population in 1990 was 222,684 vs only 227,715 in 2016. However, as we know, locals are choosing to move from Baton Rouge into better school district in Zachary’s #1 rating, Central Communites #2 rating, Livingston’s #3 rating and Ascension’s top rated public schools and the Census Bureau doesn’t have a GBR chart comparing growth over time.
Ascension Parish Bright Future – Well Funded
The market showing the most promise appears to be Ascension Parish because it’s so well funded by Petro-Chemical and Industrial tax dollars to build new schools, improve infrastructure, closer to New Orleans for commuters and is commanding the highest local median sales prices in GBR at $215,000 and average sales prices of $233,939 – buyers are approving by voting with their pocketbooks. Of some local home builder models, they command a higher price in Ascension than anywhere else in GBR.
The ills facing Ascension Parish traffic are directly the responsibility of State of Louisiana division of public highways and their failure to plan years in advance to build and maintain roads. Just like the State’s inaction after the flood to drill holes in 1-12 dam to prevent future flooding, so the State has no real plan to deal with the ever growing North Ascension communities. There’s no excuse for Hwy 42, which began population expansion in 1992, to still be a two-lane highway. These appear to be State issues, not so much Parish issues.
Greater Baton Rouge’s Home Sales Year In Review And Charts
It’s been another great year for GBR housing! Inventory was down, prices were up and homes sold in less time on the market than in 2016. In addition to the multiple infographics below, here’s some additional points of interest in 2017.
1.) The number of sales were up 311 sales or 3.15 percent in 2017 and sold volume was up 3.6 percent.
2.) Median sale price increased 1.8 percent or up $3,350 to $192,300 vs $188,950 in 2016.
3.) June was busiest month of sales at $2,48,984,012 and slowest sales month was January at $131,114,690.
4.) Average size home sold had 1,870sf and sold for $112 per sq. ft.
5.) Days on market of 32 days decreased in 2017, down 29 percent from 2016’s 45 days.
6.) List-to-Sales percent has remained stable, 97.57 in 2016 vs 97.42 in 2017. This means on average, homes sold for 2.5 percent less than listing prices.
7.) The three price ranges with the largest growth in number of sales: $150,001 – $250,000 (up 6 percent), $400,000 – $499,999 (up 6 percent) and $500,000 – $599,999 (up 25 percent).
8.) 14 percent of all homes were cash sales with a median sales price of $100,000 and a high cash sale of $3,950,000 in Mallard Lakes.
9.) 32 percent of all homes were sold using FHA, USDA, VA and OTHER financing, FHA 18 percent, Rural Development 7 percent, VA 5 percent and OTHER 2 percent.
10.) 54 percent of all homes were sold using Conventional financing.
11.) Homes in the $100,000 – $199,999 price range sold fastest with the lowest median days on market of 21 days. This price range shows the most number of homes sold 4170 or 40 percent of 10,362 sales. This price range also had the highest list-to-sale price percent of 100, also equal to $200,000 to $299,900 range.
12.) The high prices we’re paying are buying us less home and the prices keep increasing:
– In 2017, median square footage declined from 1748 sq ft in 2016 vs 1,725 sq ft., yet median sale prices increased by $3,350
– In the $100,000 – $199,999 range, median square footage is down 2% from 1521sf in 2016 to 1490sf, and median sale prices increased by $1,500
– In the $200,000 – $299,999 range, median square footage is down 3% from 1954sf in 2016 to 1900sf, and median sale prices decreased by $3,600
– In the $300,000 – $399,999 range, median square footage is down 2% from 2436sf in 2016 to 2383sf, and median sale prices was unchanged at $340,000.
– In the $400,000 – $499,999 range, median square footage is down 4.5% from 2847sf in 2016 to 2718sf, and median sale prices declined by $8,750.
13.) Average seller paid concession or seller paying the buyer’s closing cost was $2,442. However, it seems the real number is $5,000 and I’ve seen it as high as $14,000. Appraisers deduct seller paid concessions, meaning when a home sells for $200,000 yet the seller paid $5,000 in buyer’s closing cost, when an Appraiser uses it as a comparable, we deduct $5,000. The sales price adjusted to $195,000 because concessions over-inflate housing markets. This also means the 2017 average sales price of $216,968 is actually $214,526 because 2,442 in concessions artificially inflated sales prices.
Greater Baton Rouge’s 10,362 2017 Home Sales Prices Chart – the yellow trend line represent the most common sales price range
Greater Baton Rouge 2017 Home Sales By Parish Breakdown
Average Sold Price Per Sq Ft All Baton Rouge – source: Latter & Blum Real Estate C.J. Brown Baton Rouge, LA Real Estate Statistics
Greater Baton Rouge’s Home Sales Update
East Baton Rouge’s Home Sales Update
Zachary Louisiana 2017 Home Sales – Within East Baton Rouge
Zachary, based on my disaster work and observation post-flood, experienced the least amount of flooding and continues to prosper but on a slower pace than in 2003 to 2008 boom period. With only 520 2017 sales, or 5% of the 10,362 GBR sales, Zachary is still a small market yet with the number 1 public school ranking in State of Louisiana. A more detailed Zachary housing up is available Zachary Louisiana Homes Sales Update 2016 vs 2017 Lizzie Blair Benzer The Red Door Group
Central Community Baton Rouge 2017 Home Sales Update – Within East Baton Rouge
Central was very hard hit by the Great Flood, yet continues to recover and prosper. With only 377 2017 sales, or 3.5% of the 10,362 GBR sales, Central is still a small market yet with the number 2 public school ranking in State of Louisiana. It’s a market where locals are willing to pay, on average, $318,900 or $151/sf for a new 2,136sf home in Twin Lakes Estates, which exudes confidence in this market. However, in Central right now, there’s 50 active MLS listings from $124,000 to $300,000 of what appears to be mostly flood rehabs. Homes in Central generally sell FAST because of Central’s #2 school district. However, these 50 home have been on the market for a median 71 days and average 96 days on the market. Too high pricing could be the culprit here with a median listing price of $197,950 and average of $202,247 for only 1829sf and 1882sf.
Ascension Parish Greater Baton Rouge’s Home Sales Update
Ascension also benefits from a well performing public school system, especially the Dutchtown district. Ascension’s 1971 2017 home sales represent 19% of the 10,362 GBR sales. It’s a market where Builders profit perhaps profit most in within GBR. One example is Hollows Of Dutchtown where in 2017, at least 27 buyers paid on average $419,900 or $170/sf for 2457sf as reported in GBRMLS, all time highs and buyer confidence. The same floor plan of one large area Builder sell for the most in North Ascension than in any other local market. Of the 1971 sales, 620 or 31.5% were new home sales. NOTE: After this infographic was created, GBRMLS adjusted the numbers from 1971 to 1974 sales.
Livingston Parish Greater Baton Rouge Home Sales Update
Livingston’s 2066 2017 sales represent 20% of the 10,362 GBR sales. Livingston enjoys a number 3 public school ranking in State of Louisiana, which tends to provide a consistent flow of new residents, yet at a much slower pace than in years past. Juban Crossing has added excitement, relaxation and convenience to residents and shoppers in Baton Rouge. I’m looking forward to the new CC’s Coffee House opening for a pit stop when I’m appraising in this area.
Pictured above are Livingston Council agents and leaders presenting Livingston Tax Assessor, Jeff Taylor, with a check to help support Assess The Need and myself presenting flood sales facts to the Council.
Western Livingston Parish was very hard hit by the Great Flood with a financial blow to Parish tax income after flooded properties received a 25% lower reassessment to help residents rebuild. Yet, Livingston continues to recover and prosper some, BUT on a much slower pace than in the 1994 to 2008 boom period. I’m told this is because Builders now have to build above flood elevation and perhaps deal with stricter building codes, which increases cost on thinner profit margins because homes sell for less in Livingston. Note the median sales price of $170,581 vs Ascension’s $215,000. The same floor plan built Addis, Zachary, Ascension and Denham Springs sells for at least $20,000 less in Denham Springs. The pace of new construction isn’t nearly what it used to be and I believe this has slowed growth. One exception is Carlos Alvarez developing Cella Gardens and The Sanctuary At Juban Crossing, which I just wrote about. I believe you’ll see more new subdivisions in Satsuma, Town of Livingston, and Holden areas closer to Interstate 12. Livingston has a bright future, however, it must attract more big business and industry to help fund tax revenue to finance the Parish for basic government functions, such as animal control, repaving streets in subdivision the Parish itself approved during the previous boom period and sewer clean out in established subdivisions.
On a positive note, Western Livingston home prices have increased from $158,500 in 2014 to $170,581 in 2017. And, I’ve seen 2000sf to 2400sf custom homes gain a huge spike in value in subdivisions such as Pecan Creek, Audubon Lakes, Summer Breeze, Summerfield, Collins Place, etc.. In 2014, homes in Pecan Creek were selling in the $250,000 range vs $289,900 in 2017. In 2014, homes in Audubon Lakes were selling in the $265,900 range vs $275,000 in 2017. In 2014, homes in Collins Place Lakes were selling in the $255,900 range vs $284,900 in 2017. It seems like, for these home styles, Western Livingston is getting closer to Zachary pricing for similar homes.
West Baton Rouge Greater Baton Rouge’s Home Sales Update
West Baton Rouge continues slow, but steady growth indeed, with 321 sales, not too far from Central’s home sales numbers. New home construction seems to dominate overall sales. With no real solution in the works for years to deal with Mississippi River bridge traffic issues, the solution is to build more new subdivision north of the bridge out toward Erwinville rather than in Addis where traffic is a nightmark in the mornings and after 2:30 in the afternoons. I know people that have moved out of the Port Allen/Brusly area south of the bridge because of the traffic situation. I do wish to compliment West Baton Rouge Parish Government for their excellent GIS web portal data and the best local maps of any parish within GBR.
Greater Baton Rouge’s Foreclosure Market
When I refer to “foreclosure”, I’m talking about homes sold in default, not flooded-abandoned or flooded-gutted sales to investors. National reports show U.S. Foreclosure Activity Drops to More Than 11-Year Low in Q3 2017. U.S. image below source is this attomdata article. So, why do these real estate investing seminars keep coming to town? Yes, the Great Flood did damage tens of thousand of homes, however, most homeowners did not walk away. There are some vacant bank owned abandoned houses, which are proving to be very, very slow for banks to even deal with them, much less dispose of them. RealtyTrac reports in the U.S. 1 in every 2,043 homes could face foreclosure. To put this into perspective, in New Jersey where foreclosure are more prevalent, 1 in 734 homes face foreclosure. Yet in Baton Rouge it’s 1 in 5,029, West Baton Rouge 1 in 1188, in Zachary Louisiana 1 in 9519 homes and in Baker 1 in 1952 as Baker is ground zero for foreclosures, a weak market both before and after flood.
Greater Baton Rouge foreclosure availability of properties to investors, according to GBRAR MLS data, continues to decline, despite the flood. These only represent foreclosures sold through GBRMLS and we know some don’t sell through MLS. In 2017, 426 foreclosure sales compared to 10,362 sales only represents 4% of the entire market. However, just like in markets like Baker post flood, there remains enough vacant abandones houses to boost investor hope.
Join Us For Annual Trends In Real Estate Seminar April 18
Alot of work is taking place behind the scenes preparing for April 18 Trends In Real Estate Seminar to be held at L’Auberge Casino & Hotel 777 L’Auberge Ave. Baton Rouge, LA. John Tuccillo to Keynote TRENDS 2018.
“Last year nearly 1000 professionals, including financial institutions, investors, property managers, developers and others associated with the residential and commercial real estate industry, gathered at Baton Rouge’s Preeminent Real Estate Event — the TRENDS Seminar. Join us this year for an examination the state of the industry in our area and focus on emerging trends.”
I’ve been working on Part 2 and intended on including it here originally. This post was getting just too long and Part 2 was taking too many days to publish in a timely manner. Thank you for your time here! I sincerely appreciate you. Bill Cobb Appraiser
If there’s a question or topic you’d like me to address, please leave a comment below or e amil me at asktheappraiser at g mail