http://batonrougerealestateappraisers.com/ – Baton Rouge Real Estate Update: 2008 YTD Listings And Solds Analysis
January – October 2008 showed a consistent listings inventory above the 4,000 level. November 2008 broke through that 4000 barrier @ 3,989 current listings, A Good Sign of less inventory.
During the year 2008, from January – November, the active listings have varied from August being the Highest Month @ 4580 to November being the lowest active listings of 3989, a difference of 591 active listings. The percentage of pending/contingent listings on the market have varied little from 19% – 24 % with 20% being the average rate of pendings to actives.
The highest month of listings was August with total listings of 4580, 20% of which were pending/contingent listings.
The lowest month of listings is November with listings of 3989, 20% of which were pending/contingent listings.
In other words as homes are listed, Purchase Agreements are being made at almost the same rate, averaging 20% of total listings.
What would really be significant is if either those percentage of pendings increased or decreased greatly.
If decreased, that would mean homes are being sold or “dumped” and folks are less inclined to buy – very bad because demand would be down and supply would be up and values potentially dropping.
If increased, that would mean homes are being sold or “dumped” and folks are buying them at a quicker rate – which would mean demand would be increasing, supplies dropping quicker, and values increasing.
The market has shown with my home appraisals on purchase transactions that home values are holding steady in the Greater Baton Rouge market unlike the other markets around our nation. This study shows how that it is so in that there has been little change in the rate at which homes are listed and homes which have pending contracts – keeping home values steady.
It’s important to note on the chart that there are “Total Actives” or Actively Listed Properties Available and then “Pendings/Contingents are separate from the monthly total. In other words, for November 2008, the total number of active listings available are 3,989 and 766 listings are pending and/or contingent (not available).
The Charts Above And Below Help With This Commentary. The Federal Government’s Report on Housing Price Indexs (HPI) shows Baton Rouge with only a -0.19% for Q3 and a +1.10% gain for the year, with a Rank of 70 out of 292 metro areas. First, this should remind the reader that 69 other metro areas performed better than the Baton Rouge market…..meaning part of this national real estate downturn is somewhat overblown by the media. This should also let the reader know that compared to some housing markets in the country with double digit % declines, Baton Rouge, so far, is weathering this storm fairly well. As our President of the GBRAR, Linda Fredericks, likes to emphasize, “Housing markets are local” and she’s correct.
A comparison of Solds Data between 2007 and 2008 ending in November Year-To-Date, shows a decrease in the number of homes sold from 8,154 to 6,036 or -26%. Hurricane Gustav may have been a partial contributor to this steep of a decline with September reflecting the highest monthly decline of -51%. Still, November 2008 resulted in the lowest monthly sales recorded in recent memory of only 319 solds, a decline of -37% from 2007. After reading many articles on this national situation, this appraiser believes this has more to do with the nationwide/global “credit crunch” and the negative market psychology produced by both some local and most national media outlets (perception by the public that mortgage money isn’t available any longer or is too tough to qualify for) than a worsening local housing market. Yes, sales are fewer. Yes, it takes longer to sell a home in Baton Rouge than it used to. Yes, the National Assocation of Realtors and GBRAR MLS reported a -3.3% decline in Greater Baton Rouge Home Prices for Q3 (third quarter 2008 versus q3 2007). Yes, there are some softer markets locally and than there used to be. However, in the purchase appraisals I’ve been performing this year, I haven’t been see housing values plummeting like they are in some areas of the U.S, which is encouraging to me.
However, sold data appears to be conflicting as well. Just this morning, the Baton Rouge Business Report Weekly is reporting B.R. Home Prices Up 3%,
“Capital Region home prices increased 3% in September, according to the LoanPerformance Home Price Index. The HPI is compiled by First American CoreLogic, from public records sources such as property sales, tax assessments and mortgage filings. While Baton Rouge was seeing an increase in home prices, the index for Louisiana showed a 1.45% drop. Nationwide, home prices fell by 11.2% in September, with California leading the way. Prices in California were down nearly 30% from September 2007. Both the National Association of Realtors and the Greater Baton Rouge Association of Realtors’ Multiple Listing Service say Capital Region home prices fell in the third quarter. NAR measures existing single-family home sales, while the GBRAR includes new homes.-Timothy Boone”, link: http://www.businessreport.com/archives/real-estate-weekly/2008/dec/02/703/
And, National Real Estate Investors, such as James Orr and Lorel Langemeier, point to Louisiana and the Greater Baton Rouge Housing Market as a the land of opportunity for “bread-and-butter housing” – more affordable housing with a strong economic base producing good rental income – good ROI.
The chart below shows Louisiana itself with a modest decline in HPI of -1.09%, Rank #15 in the U.S.. Again, compared to some states showing double digit declines, this is good news.
MLS SEARCH PARAMETERS DEFINED
MLS Search Parameters were East Baton Rouge, Ascension & Livingston Parishes. Data for this main chart was provided with the permission of the Greater Baton Rouge Assocation of Realtors and Tony Zito, Realtor – http://www.tonyzito.com .
Bill Cobb, CREA, is Greater Baton Rouge’s favorite and most reputable home appraiser frequently called upon by banks, homeowners, and savvy real estate investors to assess property values. A home appraiser with 16 years experience, Bill Cobb brings a wealth of knowledge to the table as a home appraiser.
Bill’s company, Accurate Valuations Home Appraisal Group, serves Greater Baton Rouge (East Baton Rouge Parish, West Baton Rouge Parish, Western Livingston Parish and Northern Ascension Parish).
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