After several years of strong growth, the Greater Baton Rouge residential housing market is regressing toward a more normalized market of supply and demand, according to data provided at today’s Real Estate Trends seminar.
The inventory of available homes for sale declined by roughly 9.4% from 3,323 to 3,012, a 12-year low brought on by fewer sellers on the market and strong demand for buyers. Richard Haase, president of Latter & Blum, said closed sales are up in the market 7% in the first quarter of this year as compared to the first quarter of last year—a great start to 2016.
Pending sales are 20% higher for the first quarter of this year than they were for the first quarter of 2015, he added.
“That’s a big jump. When you look at a decline in inventory of 10% on top of that you can see that demand is clearly outstripping supply,” Haase said. Inventory is in short supply in the local market and in others, he said.
Demand for housing in the greater Baton Rouge area remains high because of the new jobs created in the area, the overall availability of housing, which remains at near record highs, and the high cost of renting versus buying.
Haase said he doesn’t buy that millennials are forgoing purchasing homes to live with their parents.
“Whatever you believe about them, they’re out in force right now buying houses and that has a lot to do with the lower cost of housing,” he said.
Haase said increasing rental rates have fed housing purchases. According to the data provided, the average sales price of a house in the greater Baton Rouge area is $219,000, with Livingston Parish being one of the more affordable and in-demand areas. East Baton Rouge and Ascension parishes also are in-demand markets.
“Right now, it’s less expensive to buy a medium priced home in the state of Louisiana than it is to rent a property of similar size,” he said. “The rapid rise of rental rates has fed our industry.”
—Alexandria Burris
