The percentage of million-dollar homes across America has reached an all-time high, and that trend is continuing in the Baton Rouge area.
According to a new analysis by brokerage Redfin, 8.5% of U.S. homes have an estimated value of $1 million or more, up from 7.6% a year ago and more than double the 4% before the pandemic.
Vicki Spurlock with Locations Real Estate says she mainly concentrates on Old South Baton Rouge homes, but that she has seen $1 million listings become more common.
“It used to be that we didn’t really have any million-dollar houses that existed,” she says. “In the last five years, a number of the homes around the LSU lakes, Garden District and different subdivisions in the area have had that kind of price tag, and they’ve sold.”
Spurlock says about four months ago, a home on East Lakeshore Drive that was $1.6 million went under contract in about three weeks. That home had been on the market a few times within the last several years and would typically stay on the market for close to a year.
“What we’re finding in the million-dollar-plus homes is it’s usually cash sales right now,” she explains. “That could change once the rates come down a little, but I’ve been amazed at how many cash sales have popped up in that price range. It seems like every third sale is a cash sale, and it doesn’t matter on the pricing. I think the people who have the money in the bank don’t want to borrow money right now, so they’re using their cash to buy things.”
While inventory is inching up across the country, it remains about 30% below prepandemic levels, according to Redfin. Sellers are locked into low interest rates, while construction costs remain significantly higher than before COVID, putting a damper on new construction.
The rise in $1 million properties is the result of historically high home prices across the country; the median home sale price rose 4% year over year to a record $442,525 in June, Redfin’s data shows.
“Back 10 years ago, if you said something was a million dollars, you’d say, ‘You’ve got to be kidding me.’ Who has that kind of money? Now it’s nothing, you know, to have a $900,000 listing,” Spurlock says. “The value of the land has just skyrocketed in the older parts. If you pay 300,000 or 350,000 for a lot, you’ve got to put up something four times that amount. The land is what, to me, is triggering all of this.”
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