Live Ascension Real Estate Information

March 10, 2009

Ascension Parish Real Estate - Residential Market Analysis February 2009

Filed under: Market Analysis, Uncategorized — admin @ 2:31 pm

Ascension Parish Residential Real Estate Market Analysis - 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 following chart shows unit sales by month since January 2004. We observe that overall (indicated by the green lines) there has been a generally
downward trend since late 2006. If one digs deeper into the data, one finds that most of this downward trend is due to a continuing drop in the
sales of new construction. This suggests the drop in new home prices is a price elasticity issue rather than due to the current economic crisis and the
restricted availability of credit. Homes in the pre-existing market space maintained their sales rate up until September of 2008 when the mortgage meltdown
occured and hurrican Gustav took a toll on the Greater Baton Rouge metro area market.

Ascension Parish Real Estate Unit Sales

Comparing February unit sales with unit sales in February of prior years, we observe that in the re-sale market space, unit sales are more or less equivalent
to prior years (not counting February of 2006 when the positive effects of hurricane Katrina in Ascension parish were manifest). New construction,
however, remains low. One bright spot here is that new construction unit sales in February 2009 were higher than in 2008 suggesting that the decline may
be at an end and pent up demand could be ready to break loose.

Ascension Parish Real Estate February Unit Sales

In terms of pricing, average prices in both market segments were growing, or at least remaining stable, through 2008. With two months of 2009 sales recorded,
the average price of both new construction and previously owned homes has declined by about 5%.

Ascension Parish Real Estate Average Home Prices

The following chart illustrates that the drop in the average price was not due to consumers simply purchasing smaller houses because the average
selling price per square foot of living area also dropped.

Ascension Parish Real Estate Selling Price per Square Foot

For pre-owned homes, we observe an oversupply situation. Overall there is a nine-month supply. Looking more deeply into the following chart, however, we
can see that this is primarily due to oversupply of more expensive homes. Affordable housing under $200K is in a seller’s market where demand is high and supply is

Ascension Parish Real Estate Pre-existing Home Absorption Rate

Overall it is a buyer’s market in the new construction segment. In general, however, affordable housing is in balance or exhibits characteristics of a seller’s market while the
situation worsens as price increases. The highest velocity of home sales occured in the $151K-$200K price range which has accounted for 42% of new home sales in 2009 through
the end of February.

Ascension Parish Real Estate New Home Absorption Rate

Looking at the top 10 selling subdivisions for new construction in 2009, we can see confirmation that more affordable housing is indeed selling at a higher rate.

Ascension Parish Real Estate New Home Top 10 Subdivisions

©2009 by Don Stern - All Rights Reserved

(225)413-3634 phone (225)313-3698 fax - email1312

Powered by WordPress