Are Greater Baton Rouge Home Prices Back To U.S. Pre-Meltdown 2006-2007 Highs?
I’ve heard national talk, “we’re at or near pre-meltdown highs… I know to me in the last year, it’s felt like 2005 to 2006 all over again.
How did Greater Baton Rouge weather the correction and where are we in 2018?
Joe Manausa, an exceptionally impressive REALTOR® and Broker in Florida, recently compared 2018 to the pre-meltdown market in “How Does Today’s Market Compare With The Past?” newsletter.
This week, NPR posted an interview on “Why Isn’t The Housing Market Booming The Way Experts Expected? and described a national problem Baton Rouge isn’t necessarily experiencing.
“Wheaton says in many parts of the country, home prices still haven’t risen back to or much above their peaks from the housing bubble. So many people still haven’t built up much equity in their homes. In that sense, he says, the market’s still recovering. But it’s not recovered yet. And you’ve got to be recovered before people are sitting on top of little nest eggs of equity and can say, oh, you know, now we can go buy the house down the street we always wanted. And that, in the end, may be the biggest drag on housing right now. We just still haven’t quite gotten over the hangover from the worst housing crash since the Great Depression.”
Greater Baton Rouge didn’t price correct so much following the meltdown because we didn’t experience such irrational highs like in California or Arizona. Thanks in part to the post-Hurricane Katrina market, we actually rode out the national meltdown quite well until 2010-2011 when we finally began to feel the impact. Some individual GBR subdivisions did correct harshly. But for the most part, we’re far higher compared to the 2006-2007 U.S. housing market.
While the main chart below doesn’t show much of a correction, there certainly was a dip in prices in some subdivisions, like Sherwood Forest and Park Forest. Both Park Forest and Sherwood Forest are fragile during market corrections, which is why seeing home sales prices so high in both makes me wonder how far they will fall during the next major correction. Katrina buyers in both subdivisions, who paid artificially high prices, took it on the chin with losses when they sold lower in the years following. Will this happen again to post-flood buyers paying well above average prices in 2017-2018? Only time will tell.
2007-2008 both show GBR median sales prices rounded to $168,000 vs $196,000 in 2018 year-to-date. So, as a whole market, GBR is actually up $28,000 or 17 percent above 2007-2008 highs.
Bill Cobb Appraiser 225-293-1500