http://www.baton-rouge-real-estate.com/ – Baton Rouge Home Appraisers: Where’s The Bottom For Greater Baton Rouge Housing? Correct Answer Is Based On Local Incomes!

Last week, David Jacobs, with the Baton Rouge Business Report, reported a startling study about how high and out of sync Greater Baton Rouge housing prices are when combined with transportation. The article, Baton Rouge-area household spends 52% of income on housing and transportation, was published on 8/9/2011. In the article or study, the CNT recommends spending no more than 45% and that combining local housing prices with true transportation costs provides “an accurate measure of of the true affordability of housing”.

Other Studies. We also know that according to Core Logic, Baton Rouge is in its’ 9th straight month of home price correction. We also know from the 24/7 Wall Street study that Baton Rouge made America’s 10 Sickest Housing Markets list this month.

We’re In For More Correction. It would appear, based on these 3 studies, that Greater Baton Rouge Housing is in for more correction.

This is my reply below to David Jacobs submitted on 8/10/2011:

I read your Business Report Weekly and wanted to thank you for reporting on this. This has really helped me. Just 3 weeks ago, I was ready to go for a visit to the LSU Real Estate Research Department with similar questions as to where should GBR Housing be priced relative to local incomes? I think this is a foundational question going forward and might possibly shed some light on where the bottom might be in local housing prices in the future. If GBR housing is out of proportion, by how much or by what percentage? Are the current still nose-bleed high housing prices sustainable? Obviously if we asked this question in 2007 from some of the Zachary and ASC $300,000 neighborhoods, the answer today is probably not. $140/sf for new homes wasn’t sustainable across the board. This is why builders like DSLD Homes are having such success……because the insanity in local new home prices from 2006 to 2008 was never sustainable based on local incomes.

As a local home appraiser, I’ve been scratching head all along here wondering WHY local housing is so expensive…..in Louisiana. Baton Rouge has been a wonderful place to grow up and now raise my family, but we’re not California with almost a perfect climate where one would expect high prices. Why are home prices so high here….still in 2011? Even with the modest correction, it would certainly seem that we’re still at nose bleed levels on the pricing of some local housing relative to local incomes. I scratch my head monthly on this issue.

Please understand, I’m not a conservative appraiser. Whatever the housing market’s decision has been, in the form of home sales, I reflect in my reports. However, we’re now about 9 months into this local correction and I’m beginning to think that locals are finally coming to their senses on what they pay for local housing relative to local incomes. There are A LOT of sellers in denial right now, and Hurricane Katrina didn’t help with that at all. It only made it worse. Today, some local Real Estate Agents are hiring me for my Listing Appraisals on their listings that have been on the market for months now, they know are overpriced and they bring me in to show the seller the reality of the local numbers in comparison to sellers perception that their home is worth more.

The chart below doesn’t indicate a huge problem in GBR housing, not like some sour markets in the USA where there’s 3-4 years of supply. However, talk to most appraisers locally and you’ll find that we’re checking “Slow” market for growth or sales and in some subdivision/markets, there’s been such few home sales that it’s become very difficult to complete appraisals for the lack of comps sold within 3 to 6 months, especially under $125,000.

NOTE: Based on information from the Greater Baton Rouge Association of REALTORS®\MLS for the period of August 2010 to July 2011. This information was extracted on 8/10/2011. YES, this appraiser does have the permission of GBRMLS to use the chart above.

These are some of the things I’ve been thinking about in GBR Housing since 2007 and going forward. Are we fairly priced or still way out of balance? Yes, the market is correcting back to some sense of sanity…..finally…..and how many more months or years will it be till we reach equilibrium (sanity) based on local incomes.

New Homes Are Still Priced High. I still see a local builder and have them say something like, “This market is killing me…when the market coming back?!”. And that builder just doesn’t get it….that the post Hurricane Katrina builder’s market isn’t coming “back” in terms of such exaggerated pricing. The odd thing here is the LHBA (La Home Builders Association) would probably tell you today that we’re too low for their builders to make a decent profit on local home building. What they experienced in 2006-2008 (unsustainable pricing) and expect in the future just wasn’t/isn’t sustainable.

This is why I believe that new TND in Zachary recently announced will take a decade or more to build out because $140/sf to $200/sf just isn’t what local incomes will support and until local builders understand this, they’ll be more developments started and then finished by DSLD Homes. This is also why I believe that new Wyndam Estates development in Denham Springs with 1600sf homes on “tiny lots” in $190′s or $120/sf will also take much, much longer than expected to fill and should be filled with homes in the $150s to $160s. It’s about market economics and local incomes and the local economics, at least outside of Baton Rouge itself, is in favor of DSLD Homes pricing. Those builders and developers that fail to understand local incomes will continue to have their fledgling developments sold to and finished by developers like DSLD Homes after spending millions to break the dirt.

Bill Cobb, Appraiser

http://www.batonrougemarketmetrics.com/ – Greater Baton Rouge Housing Trends: Indepth Look At 2010 Home Sales Numbers

The LREC or Louisiana REALTORS are reporting on comprehensive housing numbers for 2010, including 4th quarter 2010. So, the source for this report and charts and graphs is LREC.

NUMBER OF SALES DOWN 7.3%. Overall, the number of Greater Baton Rouge Home Sales was down 7.3% for 2010. Total volume for 2010 was 5,708 versus 6,160 for 2009.

AVERAGE SALES PRICE. The average home sales price increased in 2010 to $202,138 vs $197,587 for 2009. This would appear to be due to strong local employment numbers of 355,797 in 2010 versus 354,044 in 2009. However, the Baton Rouge Business Report just reported this morning that “B.R. home price index drops for fifth month running“. So, according to the CoreLogic Home Price Index for Louisiana, Baton Rouge home prices are continuing to correct to the downside, not the upside, and I would agree. And, a look at the median sales prices would be more helpful than average sales prices since average sales prices can include homes from $10,000 up to $3,000,000 – outliers.

SOME IMPROVEMENT. Not all areas are declining though, but marketing time periods are well over 6 months. I’m appraising the 2011 St. Jude Dream Home in Prairieville and the general market of competing solds and listings is showing a rising median sales price, but very long marketing time periods of well over 6 months. Some homes in one local high end development on Highway 73 in Prairieville have been on the market since 2008 without selling.

AVERAGE DAYS ON MARKET. The average days on market remained almost unchanged at 90 days in 2010 versus 91 in 2009.

http://www.batonrougerealestatebuzz.com/ – Baton Rouge Real Estate Home Sales: Highs and Lows For September 7, 2010

Rebekah Allen, with the Baton Rouge Business Report, has an update on Baton Rouge home sales as published on September 7, 2010 and quoted below:

“After several months of hoping that the worst had passed in the fragile housing market, the real estate industry experienced record-breaking lows in July.

Experts blamed the historic decrease on the expiration of the homebuyer tax credit and mounting evidence that the economy isn’t ready to rebound.

According to the National Association of Realtors, existing home sales in July dropped 25.5% from the previous year. New home sales plummeted 32.4% from the previous year.

The Capital Region was not immune to the downward trend. July home sales dropped 24.4% in East Baton Rouge Parish from the previous year, 30.6% in Ascension Parish, 25.4% in Livingston Parish and 45.8% in the other parishes, including Iberville, West Baton Rouge, and East and West Feliciana.

But there was some good news, particularly in the neighboring parishes.

Home sales for the first seven months of this year have increased 11.6% in Ascension over the same time period one year ago, 17.3% in Livingston and 33.9% in the other parishes. East Baton Rouge Parish, however, has reported a 6.3% decrease.

Ashley Greer, team leader for Keller Williams Realty in Denham Springs, says her location has seen 38% more business this year than last, and she’s confident that the momentum will continue through the rest of 2010.

“We’re just one exit outside of Baton Rouge,” she says. “You get all of the amenities of a big city without having to pay as much for it.”

Greer adds that home-owners are attracted to the strong school system in Livingston.

“Livingston schools are continuing to build. We have some of the best schools, so parents don’t have to send their kids to private schools,” she says. “Everything we’ve increased our tax dollars to pay for is paying off.”

Appraiser Bill Cobb says Livingston Parish is attracting buyers with affordable price points. He says the bulk of new home sales occurred in the $120,000 to $169,900 range.

The average sale price in July was $197,076 in the Capital Region, down from $203,735 one year ago.

“Builders keep asking, ‘When is the market coming back?’ which is the wrong question,” Cobb says. “The right question should be, ‘How can I deliver a product that locals can better afford?’”—Rebekah Allen”

The Link Is Here: http://www.businessreport.com/news/2010/sep/07/startup-gnit1/

Tags: Baton Rouge Homes, Baton Rouge Homes For Sale, Baton Rouge Housing, Baton Rouge Housing Market, Baton Rouge Real Estate, Greater Baton Rouge Real Estate

http://www.ascensionrealestateappraisers.com/ – With Federal Tax Credit Expiration, Ascension Parish Home Sales Numbers Decline 31% Into July 2010! Prairieville, Gonzales, Geismar, Dutchtown, Saint Amant!

The Baton Rouge Business Report Daily PM Report is report a Capital Region home sales plunge of 21% in July 2010. “The number of homes sold in metro Baton Rouge fell by 21% in July compared with the year before, as the market corrected itself after being bolstered by the federal homebuyer tax credit. There were 523 homes in the Capital Region sold in July, compared with 665 sales in July 2009, according to figures from the Greater Baton Rouge Association of Realtors Multiple Listing Service. An $8,000 tax credit for homebuyers expired earlier this year, and transactions had to be under contract at the end of April to qualify for the money. That led to Capital Region home sales posting 21% and 28% increases in April and May over last year. The average sale price in July was $197,076, down from the $203,735 average in July 2009. Sales were down nearly 31% in Ascension Parish in July, from 111 in 2009 to 77. Livingston Parish saw a 25% drop, from 114 homes changing hands to 85. In East Baton Rouge, there was a 24% drop in home sales, from 414 to 313. The other category, which includes MLS sales in West Baton Rouge, Iberville and the Feliciana parishes, actually saw an 85% increase, from 26 to 48. Through the first seven months of the year, home sales continued to run slightly ahead of the 2009 pace. There were 4,107 homes sold through the end of July, up 3% from the 3,985 sales total at the end of July 2009.”

http://www.accuratevg.com/ – Greater Baton Rouge Named Second Best Economic Development Market!

The Baton Rouge Business Report AM is delivering Great News for the Greater Baton Rouge housing market. The link to the article is here!

Here’s the good news:

“Baton Rouge is ranked second by Southern Business and Development magazine among the top 10 mid-markets of the decade, based on the amount of new and expanded project wins over the last 10 years. Some of the notable projects in the top-10 issue include: Albemarle, Electronic Arts, SNF Holding Company and The Shaw Group. Project wins that affected rankings must have consisted of 200 or more jobs and/or $30 million or more in capital investment. Huntsville, Ala., was the only city to top Baton Rouge.

Baton Rouge was also ranked third-best metro area in economic development in 2009 by Site Selection magazine.

Adam Knapp, BRAC president and CEO, says he attributes the area’s success to the chamber’s “Campaign for a Greater Baton Rouge.” The Southern Business and Development Story can be found here.“

http://www.batonrougerealestateappraisal.com/ – Baton Rouge Real Estate Appraisers: NAR Says January 2010 U.S. Home Sales Fall 7.2 Percent

The Source Is Baton Rouge Business Report. The Baton Rouge Business Report Is Dispensing Information From The National Association Of Realtors Regarding January Home Sales, see below. AND NOTE, This decline is despite efforts by our Federal Government to offer the $8,000 Tax Credit, which was supposed to help national home sales.

“Sales of previously occupied homes took a large drop for the second consecutive month in January, falling to the lowest level since summer. It is understood as another sign the housing market’s recovery is faltering. The National Association of Realtors said sales fell 7.2% to a seasonally adjusted annual rate of 5.05 million from a downwardly revised pace of 5.44 million in December. The results, the weakest since June, were far worse than forecast. Economists expected a slight increase, to a rate of 5.5 million.

Sales declined throughout the country, falling the most—nearly 11%—in the Northeast. Sales fell by about 7% in the South and the Midwest and by more than 5% in the West.“

http://www.accuratevg.com/ - Baton Rouge Real Estate: Greater Baton Rouge Foreclosures Were Low In 2009

In a one paragraph report, the Baton Rouge Business Report is reporting the following:

“The 2009 foreclosure rate in Baton Rouge ranks among the lowest 25% for U.S. metro areas, according to a new report. Baton Rouge had the 157th highest foreclosure rate among 203 U.S. cities, according to RealtyTrac, which follows the market for seized homes. One out of 121 homes in the Capital Region was involved in the foreclosure process in 2009, a 139% jump from the year before. RealtyTrac warns the actual increase may be due to improvements or changes in reporting techniques. Three other Louisiana cities had lower foreclosure rates than Baton Rouge: Shreveport was ranked 163rd, with one foreclosure per 140 homes; Lafayette was 170th, with one foreclosure per 183 homes; and Houma-Thibodaux was 193rd, with one foreclosure per 363 households. Nationally, the foreclosure rate averaged one for every 45 households. Las Vegas and Fort Myers, Fla., were the two weakest markets, with one out of every 8 homeowners facing foreclosure during 2009.”

Tags: Baton Rouge Estate Appraisers, baton rouge real estate, baton rouge real estate agents, baton rouge real estate appraisers, baton rouge real estate trends, baton rouge realtors

http://www.batonrougerealestateappraisal.com/ - Baton Rouge Real Estate: Ascension and Livingston Parish Home Sales Increase In January 2010

According to the 2/16/2010 Baton Rouge Business Report Real Estate Weekly, home sales were up in January 2010 in Ascension and Livingston Parishes. Read the complete report at the link above. The short article states:

“The number of houses sold in Ascension and Livingston parishes in January was higher than what was recorded the year before. There were 73 houses sold in each parish, according to figures from the Greater Baton Rouge Association of Realtors Multiple Listing Service. In January 2009, there were 64 homes sold in Livingston and 63 in Ascension. Ascension even saw a modest increase in the average sale price, up from $203,016 in 2009 to $203,400 in January. Livingston saw a significant drop in average sale price, down to $148,587 from $175,459 in January 2009.

MLS home sales were down 16% in East Baton Rouge, from 242 in 2009 to 203 in January. The average sale price went up, from $194,209 to $195,101. In the category that includes MLS sales in parishes such as West Baton Rouge, Iberville and the Felicianas, there were 22 houses sold in the first month of the year, compared with 25 in January 2009. The average sale price rose to $144,984 from $105,076 the year before.”

http://batonrougerealestateappraisal.com/ – Baton Rouge Real Estate Appraisers News: Tax Credit Extended

Wow! I arrived back at the office to receive a flood of news about the Tax Credit Extension.

From Wells Fargo Mortgage:

Tami Luhby, with CNNMoney.com, is reporting that Congress Extends Homebuyer Benefits! Bill Extends Homebuyer Tax Credi Into Next Year. Here’s a snippet below:

“NEW YORK (CNNMoney.com) — New homebuyers are poised to see the $8,000 tax credit extended into mid-next year.

The legislation extends the $8,000 homebuyer tax credit to contracts signed by April 30 and closed by June 30. The controversial credit, which many say has boosted home sales in recent months, was set to expire after Nov. 30.

The bill also creates a $6,500 credit for those who buy a home after living in their current house at least five years. That measure would apply to contracts signed by April 30 and closed by June 30. The current credit defines a first-time homebuyer as someone who has not owned a residence within the past three years.

The credit would be available only for the purchase of principal residences priced at $800,000 or less.”

From Darren James @ Keller Williams Realty:

“Breaking News!!!

As of today-Thursday, November 5th, the bill has passed involving the extension and expansion of the homebuyer tax credit and will be sent to President Obama for his signature. The new program will go into effect when President Obama signs the bill. Click link below for details!!

CLICK HERE FOR PDF PODCAST

From Baton Rouge Business Report:

Realtors pleased tax credit extended

http://www.billcobbsuccess.com/ - Local Builder and Giver Back To The Baton Rouge Community Honored By The Baton Rouge Business Report.

Local Builder, RE/MAX Broker and Annual Builder of the Saint Jude Dream Home was honored by the Baton Rouge Business Report on September 8, 2009 with the Article, “Carlos Of All Trades“. Here’s A Snippet from the article:

“Not long ago, Realtor Scott Gaspard represented the buyer of a home that was under construction when the project ran into snag. The area around the site was rezoned, and the surrounding flood elevation level was changed. As a result, the buyer was forced to purchase flood insurance, which increased the cost of the home by several thousand dollars.

Gaspard’s colleague and competitor, Carlos Alvarez, was the builder and the seller. Alvarez and the buyer had agreed on a price, and though it technically wasn’t his problem, he didn’t want to see the buyer take a hit. So Alvarez offered to pick up some of the closing costs.

“Some builders would have bickered over every dollar,” Gaspard says. “But not Carlos. He was willing to work things out because he genuinely wanted to help my client. It’s an example of the kind of guy he is.””