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June 12, 2009

Ascension Parish Real Estate - Residential Market Analysis May 2009

Ascension Parish Residential Real Estate Market Analysis - May 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
May 2009. I identified the home sales as either New Construction or Re-Sale because, in my experience, they have distinct characteristics.

The real estate news in Ascension parish is mixed but, in my opinion, generally good news. As the following chart illustrates, seasonality
is taking effect as we move toward the historically favorable summer selling months. Unit sales of previously owned homes, although
lower than last year are at levels similar to pre-Katrina levels.

Ascension Homes Unit Sales

Average home prices have declined as the next chart illustrates. With respect to new home prices, the drop is due primarily to a shift in what
is being purchased rather than a drop in value. More affordable homes are being purchased. The most successful subdivisions are those
which offer a limited number of floor plans with a lower standard of amenities than was the trend a just a few years back.

the average price of a previously owned home has receded somewhat but only about 2-4%.

Ascension Homes Average Prices

Although lower than the years immediately before and after Katrina, unit sales of new homes is improving. In fact, every month in 2009
saw more new homes sold than in every corresponding month of 2008.

Ascension New Homes Monthly Unit Sales

The next chart illustrates the price point of new homes sold during 2009. We can see a dense cluster of homes sold between about $160K and $215K which were
priced at or below $110/sq.ft. of living area. A significant number of homes were also sold at higher prices and price points but the drop
in average price and average price per square foot illustrates the trend toward more affordable homes.

Ascension New Homes Price vs $/sq.ft.

The really good news in the new home market is that inventories are being sold out. We previously reported that at the end of 2008 there was
an 8.2 month supply of new homes in the parish. As the following chart illustrates, that has dropped to 4.2 months as of the end of May.
It is a seller’s market condition in most price ranges. The only area of deep concern is for homes priced at $400K and up where there is
a 20 month supply. While there are five fewer homes in inventory today (20) than there were at the end of 2008, the rate of sales for
these homes has dropped significantly from 2.3 homes per month in 2008 to only 1 per month on average during 2009.

Ascension New Homes Absorption by Price

The re-sale (previously owned homes) market statistics are similar to what was observed at the end of 2008. At that time we reported 385 homes
available representing a 6.1 month supply at the average absorption rate for 2008. As of the end of May, we have 361 homes available representing
a 6.5 month supply at the average absorption rate for 2009. Fewer homes per month are being sold but, as we saw earlier, we are just entering
the peak selling season.

There is an oversupply situation with respect to the higher priced homes. In fact, at current absorption rates there is more than a four year
supply of homes priced at $400K and above.

Ascension Previously Owned Homes Absorption by Price

Readers are encouraged to comment with questions or suggestions for improvement. Anyone interested in exploring the possibility of buying or selling
property is welcomed to call or e-mail1312 me.

©2009 by Don Stern - All Rights Reserved

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

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