It’s no secret the greater Baton Rouge real estate market is morphing out of a seller’s market, and now that downward trend is creeping into some of the traditional hot pockets of the Capital Region.
Take Ascension Parish, for instance, where homebuyers have flocked to Prairieville and Gonzales over the years. Even those markets have now begun to slow.
Home sales in Ascension dropped 1.6% in 2018, while average days on market rose 14% to 56 days in 2018, up from 49 days the previous year, according to data from the Greater Baton Rouge Association of Realtors.
The supply of inventory has also steadily crept higher. By the end of 2018, Ascension had 4.1 months supply, up from 3.3 months at the same time the year before. That still reflects a seller’s market, with equilibrium at six months.
The slowdown is more pronounced at the higher price ranges.
Prairieville houses in the $350,000 to $500,000 range, for example, find themselves with a inventory supply just over six months, dipping slightly into buyer’s market territory, according to data from the Baton Rouge area multiple listing services. Those houses are sitting on the market longer, averaging 75 days.
“I definitely think we’re in somewhat of a slowdown,” says Ginger Maulden, a Prairieville-based agent with Coldwell Banker One. “A lot of it is because there’s a lot of new construction. The more supply we have, the more houses that are sitting.”
“With the rates again at historic lows and inventory higher than it’s been in the past seven or eight years, buyers should definitely be making offers,” says Keller Williams agent Kyle Petersen, who also does business in Ascension Parish.
Real estate agents tracking market trends, like Trey Willard of Berkshire Hathaway, say the market shift is part of the traditional real estate cycle. The Capital Region has been in an “aggressive seller’s market” since about 2013, he says, but as every cycle goes, inventory is beginning to rise again and rates are going up.
As that happens, the market cannot sustain the level of price appreciation that occurred in recent years, he adds. But prices have yet to react to the market shift.
“We’re in a shift from seller’s to a neutral market right now,” Willard says. “The next shift we’ll see is to a buyer’s market. It’s what happens.”
And typically, what comes next after a buyer’s market is a recession, he adds, which has implications on the wider Baton Rouge economy.