Best Long Term Investment = Real Estate

Baton Rouge Housing Market Update

Research data was provided by the Commercial & Investment Division of the Greater Baton Rouge Association of Realtors presented at the Baton Rouge TRENDS seminar. For more information, visit batonrougetrends.net/residential.

After several years when buyers had the upper hand, the Capital Region's single-family housing market is tilting back toward sellers, according to data gathered and analyzed by the Greater Baton Rouge Association of Realtors. For the first time since the recession, the inventory of homes for sale dipped below six months' worth over the past year. Higher average sale prices and decreases in inventory were experienced in almost all sectors, which the Realtors say is indicative of a healthy market. Volume builders like DSLD, D.R. Horton and Rabalais Homes are doing much of the new construction, although local appraiser Tom Cook stresses that bulk building is not synonymous with low quality.

BY THE NUMBERS

Total sales volume: $1.77 billion
Sales volume percentage change over the previous year: +19.2%
Total sales: 8,870
Total sales percentage change over previous year: +15.3%
Months of inventory: 5.76
Average list price: $205,164
Average sale price: $199,343
Average sale price percentage change: +3.4%
Average days on market: 86
Average days on market percentage change: -30.1%

SOURCE: Trends, 2014, Commercial Investment Division, Greater Baton Rouge Association of Realtors. Data reflects March 2013 through February 2014

AT A GLANCE

• Sales volume increased by more than 19%, the second consecutive year of double-digit increases.

• Of the three parishes that constitute most of the region's housing market, Ascension had the highest average sale price of $212,038, with East Baton Rouge at $209,173 and Livingston at $164,225.

• New home sales volume for homes in Ascension priced between $300,000 and $400,000 more than doubled from the previous year, the largest increase of any sector evaluated by the Realtors' residential trends committee.

THREE THINGS TO WATCH

INVENTORY
Six months of inventory is widely considered the dividing line between a buyer's and seller's market. The Capital Region has dipped slightly below that level, and if that trend continues sellers will gain the upper hand for the first time since the year after Hurricane Katrina.

INTEREST RATES
Low interest rates have fueled the housing recovery, but rates can't stay this low forever.

GOVERNMENT
The East Baton Rouge Parish Department of Public works is woefully sluggish, sometimes slowing down housing development, Cook says. Will DPW figure out how to speed things up?

4 Reasons to Buy Your Home Now

Here are four great reasons to consider buying a home today, instead of waiting.

1. Prices Will Continue to Rise

The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects appreciation in home values over the next five years to be between 30.8% (most optimistic) and 9.4% (most pessimistic). The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Increasing

Although Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have softened recently, most experts predict that they will begin to rise later this year. The Mortgage Bankers Association, Fannie Mae, Freddie Mac, and the National Association of Realtors are in unison; projecting that rates will be up almost a full percentage point by the end of next year.

An increase in rates will impact YOUR monthly mortgage payment. Your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

3. Either Way, You are Paying a Mortgage

As a recent paper from the Joint Center for Housing Studies at Harvard University explains: “Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

4. It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.
But, what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe it is time to buy. If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

Louisiana Home Prices Hit New Highs in April

Louisiana home prices hit a new peak in April, according to new monthly figures released today by CoreLogic. Average single-family home prices in the state, including distressed sales, rose 1.4% between March and April, the report says, with the year-over-year increase at 3.7% through April. Excluding distressed sales—that is, properties under foreclosure or advertised for sale by a mortgagee—prices in Louisiana rose 0.9% on the month and are up 4% year-over-year. In both categories, Louisiana prices reached a new peak in April, the report says. All 50 states and the District of Columbia posted a year-over-year increase in average home prices during April, according to the report, and there are now 23 states at or within 10% of their peak average price. See the full report. 

While home prices across the U.S. rose by 10.5% in April, compared to the same month a year earlier, CoreLogic notes that was the slowest rate of appreciation in 14 months. As previously reported, average home sale prices in the eight-parish region tracked by the Greater Baton Rouge Association of Realtors were up 0.4% year to date through April. Access the complete GBRAR report. —Steve Sanoski

June is National Homeownership Month

National Homeownership Month actually started as a week-long celebration of homeownership during the Clinton administration in 1995. In 2002, President George W. Bush proclaimed June as the National Homeownership Month. Here is an excerpt from his proclamation:

“Homeownership is an important part of the American Dream…A home provides shelter and a safe place where families can prosper and children can thrive. For many Americans, their home is an important financial investment, and it can be a source of great personal pride and an important part of community stability.”

“Homeownership encourages personal responsibility and the values necessary for strong families. Where homeownership flourishes, neighborhoods are more stable, residents are more civic-minded, schools are better, and crime rates decline.”

“During National Homeownership Month, I encourage all Americans to learn more about financial management and to explore homeownership opportunities in their communities. By taking this important step, individuals and families help safeguard their financial futures and contribute to the strength of our Nation.”

 

Call Christie Farris, Realtor at 225-315-9003 or email: Christiefarris@gmail.com

Visit www.brandyfarris.com