East Baton Rouge Parish, LA: February 2009 Residential Real Estate Market Update

By
Real Estate Agent with Realty Executives South Louisiana

East Baton Rouge Parish Residential Real Estate Market Update- February 2009

The information presented in this post is based upon data extracted from the Greater Baton Rouge Association of Realtors MLS database. For the purposes of my analysis, I included data for detached single family dwellings which sold in Ascension parish for the years 2004 through February 2009. I identified the home sales as either New Construction or Re-Sale because, in my experience, they have distinct characteristics.

The next chart shows the history of Average home prices in East Baton Rouge Parish separating new construction from previously owned homes. The average home price over the first two months of 2009 shows a drop from the 2008 average of about 6% for new construction and about 3% for homes in the resale market segment.

East Baton Rouge Real Estate Average Home Prices

If one looks at the average selling price per square foot of living area, however, new construction dropped only about 1.8% while homes in the resale segment dropped nearly 3.9%

East Baton Rouge Real Estate Average Price per Square Foot

Unit sales are at near historic low points. There has been a more or less steady drop in unit sales since August of 2008. While much of that drop can be attributed to the normal seasonality of the market, I believe it would be imprudent to assume that the nation's current financial crisis has had no effect upon our market. That said, our market has fared much better than elsewhere in the country. Our prices, while down a bit have not plummeted as in other areas. I think that the small drop in prices is more a reflection upon the inventory mix and that when pent up demand is released and has been satisfied, that appreciation in home values will once again be observed. In the meantime, real estate seems to be a safer place for wealth than many other investment options.

East Baton Rouge Real Estate Unit Home Sales

In terms of new construction absorption and inventory levels, there is currently a 7.5 month supply overall making this a buyer's market. If we drill down through the various price ranges we can see that the problem with oversupply exists for homes priced over $400K where there is a 21 month supply and a clear buyer's market. For price ranges below $400K a neutral market or even a seller's market exists. A shift appears to have occured between 2008 and 2009 in terms of the velocity of home sales. The absorption rates in 2009 were highest for homes selling for between $200K and $300K while in 2008 the highest velocity was achieved between $150K and $200K. This will bear watching in the coming months to see if the shift persists and a trend develops.

East Baton Rouge Real Estate New Home Absorption

With respect to previously owned homes the absorption chart shows something different. While overall a similar 7.7 month supply exists, a buyer's market condition (over 6.5 months supply) market condition exists for all but the lowest price ranges where the highest velocity of home sales occurs.

East Baton Rouge Real Estate Pre-owned Home Absorption



©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

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I think we'll be seeing the same trend in new construction in many different areas.  The rate at which new homes are being built has slowed much more quickly than the rate at which they are being sold.

March 13, 2009 03:31 PM #1
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