A housing crisis looms ahead for the greater Baton Rouge residential and multifamily real estate markets after unprecedented flooding swept through south Louisiana, damaging or destroying tens of thousands of homes.
But even before the floodwaters began to rise, the Capital Region was already grappling with historically low inventory levels, Business Report details in a feature from the current issue.
“The whole region is going into a seller’s market,” says Realtor Donna Wolff of RE/MAX Louisiana.
Early this year, the region’s residential housing market hit a 12-year low for standing inventory, brought on by a combination of strong demand and fewer sellers, according to the annual Baton Rouge TRENDS real estate report. Only 3.1 months worth of inventory was on the market, compared to 4.5 months the previous year. A market where it would take six months to sell all the available inventory is widely considered to be balanced between buyers and sellers.
By the halfway point of 2016, the regional inventory had increased to a 3.9-month supply, but that’s still 22% less than this time last year, according to the Greater Baton Rouge Association of Realtors. New listings were down 8.5%.
Low inventory is starting to squeeze sales, which were down 3.7% in June from the same month last year—year-to-date, sales are up 7.1% through the first half of the year—while many sellers are getting a higher percentage of their asking price, says GBRAR spokeswoman Saiward Hromadka. The median sales price was up 3.4% in June to $197,025.
Though prices are creeping up, Wolff doesn’t see much potential for a bubble. Sellers are pricing appropriately, she says, and appraisers are making reasonable estimates, keeping prices in check.
Wolff says more homes in high-demand locations have been getting multiple offers during the past several months, but she’s not seeing “crazy” bidding wars where someone pays $50,000 over list price. Still, she recommends serious buyers get their financing lined up, stay proactive and be ready to pull the trigger if they find a house they love.
“The buyer has to be ready to write the offer,” she says, “or it’s going to be gone.”
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