This is an on-going series into the decline of Greater Baton Rouge Home Values and why potential buyers should beware and not pay too much for “some” local overpriced listings. YES, there are overpriced listings in the Greater Baton Rouge Housing Market! Bill strongly recommends in this housing environment to obtain a Pre-Purchase Appraisal to gain ALL of the facts before making a local home purchase decision.

A recent home appraisal in and analysis of Old Jefferson revealed this interesting finding. From 2008 to 2011, the median sales price has continued to decline. From 2008 to 2010, the median sales prices were $149,900, $147,000, $145,000 and in 2011 it’s currently $140,200 based only on 4 sales (the chart below isn’t updated yet). Again, this is only based on 4 sales in the first 4.5 months of 2011. In 2010, there were 22 total sales, so one can see that the number of home sales has dropped considerably. NOTE: There is no indication per GBRMLS sheets that any of these 4 2011 sales were distressed or foreclosures, just a correction to a lower price level.

THE CORRECTION IN HOME PRICES – This is becoming the familiar “Stair Step Up and Stair Step Down”…..The Climb And Then Descent Of The Stairs In This Chart Below Visually Explains The Correction! And, so does the chart below it showing a correction.

The Chart below shows a considerable correction since May 2010 for home comparable to a larger 2,000sf in Zip 70817. Yes, the average home in Old Jefferson is 1,500sf to 1,600sf. The home I was appraising had an addition.

CURRENT LISTINGS. There are 20 current listings from $117,000 to $174,900 with 18 active and only 2 pending or under contract. So, there is a major oversupply of available homes for sale in Old Jefferson. The Average Listing Price per sq. ft. is $91.23/sf, which is too high and the reason these homes aren’t selling. If you examine the chart above, 2011 support is now in the $80s/sf, not the $90s/sf. This is called sellers in denial. AND, the 2 pendings have an average listing prices of $83.60/sf, further proof that reaching $91/sf in Old Jefferson was something that took place in 2010 but no longer in 2011. And, CoreLogictells us that Baton Rouge is in its’ 8th straight month of declines.

DISTRESSED LISTINGS. Out of the 20 current listings, 1 is a foreclosure and 3 are short sales. So, 20% of available listings are distressed in nature.

NOTE: Based on information from the Greater Baton Rouge Association of REALTORS®\MLS for the period of January 1, 2008 to May 20, 2011. This information was extracted on 5/206/2011. YES, permission was granted by GBRMLS to use Subdivision Price Trends Chart Report!

AUTHOR’S BIO:

Bill Cobb is Greater Baton Rouge’s Home Appraiser frequently called upon by banks, homeowners, and savvy real estate investors to assess property values. A home appraiser with 20 years experience, Bill Cobb brings a wealth of knowledge to the table as a home appraiser.

Bill’s company, Accurate Valuations Group, serves Greater Baton Rouge (East Baton Rouge Parish, West Baton Rouge Parish, Western Livingston Parish and Northern Ascension Parish).

Contact Bill Cobb and Accurate Valuations Home Appraisal Group for your next home appraisal:
Office: 225-293-1500, Cell: 225-953-0638
Fax: 1-866-663-6065
info@accuratevg.com
http://www.accuratevg.com/

I’m appraising a home on Wilmot Street, around 1,200sf, 2 bedroom, 1 bathroom. The Fannie Mae 1004MC or Market Conditions report has the appraiser examine the “Sub-Market” or those comps that are actually comparable to the subject property instead of the entire 70805 market. So, this chart below are solds since 6/2008 and current listings from $35,000 up to $90,000 for 1,000sf to 1,400sf homes.

Right off, the first trend we see is that the sales over the past year have declined from 21 7-12 months ago, 7 4-6 months ago and now only 3 sales in the past 3 months. So, sales have almost come to a halt. Absorption rate has declined from 3.5 to 1. Active Listings have increased from 21 to 37, increase of 76%. So, there is a documented oversupply. In fact, for this appraisal, there are 37 competing listings and only 31 competing sales in the past year, more listings than solds in the past 12 months. Months of Competing Housing Supply has increased from 6 to 37 months, an increase of 517%. The median comparable sales price has declinced from $59,000 to $45,000 to $39,500. The median comparable sales days on the market has increased from 83 to 173, an increase of 108%. WITH ALL OF THIS BAD NEWS AND DOCUMENTED NEGATIVE TRENDS, THE AGENTS HAVE DECIDED TO IGNORE THESE TRENDS AND LIST THE OVERSUPPLY OF LISTINGS IN THE $69,900 RANGE! SO, WHEN THESE OVERPRICED LISTINGS ARE UNDER CONTRACT, WILL THE APPRAISERS BE BLAMED FOR “LOW BALL APPRAISALS” BECAUSE THESE HOMES DON’T APPRAISE? FOOD FOR THOUGHT!

NOTE: Based on information from the Greater Baton Rouge Association of REALTORS®\MLS for the period of June 1, 2008 to December 17, 2010. This information was extracted on 12/17/2010.

In MLS Area 43, near Shenandoah Area, the Woodlawn Estates Subdivision was developed in late 1970′s. Based on the chart below, the average sales price, median sales price and average sold price per sq. ft. has been declining since the post Hurricane Katrina highs. From 2009 to 2010, the average sales price has declined -8.4%, median sales price has declined -5.3% and average sold price per sq. ft. has declined by -$2.6%.

This is the contradictory charting based on all Woodlawn Estates sales in GBRAR MLS since 1/1/2007. According to this charting, the median sales price has increased since June 2009. I do believe the chart above is more accurate.

This is chart below is from a recent appraisal in Woodlawn Estates of an 1840sf 4 bedroom home. The chart is based on MLS Area 43 sales comparable to the home appraised from 6/1/2008 to 6/26/2010, 1700sf to 2050sf. According to this charting, the median sales price has increased since June 2009 by approximately 3%. So, it appears that two motivated sales may have taken place in Woodlawn Estates in 2010, which lowered the overall indicators.

Possibly Oversupply of Potential Competing Listings? I do know that the marketing time period appears to be increasing after the tax credit expiration. Also, for the appraisal completed in Woodlawn Estates, there were 25 competing listings with only 51 competing solds in the past 12 months. So, there’s at least 50% of the number of homes sold since 6/2009 on the market currently. And, this doesn’t include FSBO Listings. If competing FSBO listings were included, the number of competing listings could be closer to 30 to 35.

Information is used with permission of the GBRBR MLS. Period covered is 1/1/2007 to 6/26/2010. Date of data extraction was 6/26/2010!

Tags: Baton Rouge Real Estate, Baton Rouge Homes, Woodlawn Estates, Homes In Baton Rouge, 70817, Baton Rouge FSBO, FSBOBR.com

Median Sales Price History. For Nicholson Lakes, these are the median sales prices since 2006. From 2009 to 2010, this market is only down $900 (a -0.47% decline) and from the high in 2007, it’s down $4,000, which isn’t that unusual. What is unusual is the oversupply of competing listings, see below.

2006: $184,723
2007: $193,000
2008: $189,950
2009: $189,900
2010: $189,000

Market Conditions. 11 Months Supply of Housing On Market. 34 Competing Listings IS A MAJOR OVER-SUPPLY considering that only 34 solds took place in past 12 months. Still Strong 99% List-To-Sales Price Ratio.

Nicholson Lakes In 2010. Within Nicholson Lakes in 2010 based only on 5 sales, Median Sales Price $189,000, Average Sold Price Per Sq. Ft.: $128sf, Average SP/LP%: 99% and Average Days On The Market: 133 Days. The chart below represents competing solds in Area 53 since 6/2009 showing a declining median sales price of -3.63%, from $202,250 to $194,900. But again, the numbers above only show a -0.47% decline in Nicholson Lakes from 6/2009 to 6/2010.

REO Foreclosure Rate Remains Low. The chart below represents competing solds foreclosure rate in Area 53 since 6/2008 representing a 7% rate.

THE IMPORTANT INDICATORS:

1.) HOW MANY HOMES ARE LISTED IN NICHOLSON LAKES NOW, BOTH IN MLS AND FSBOBR.COM?

Answer: 21 (16 MLS Listings and 5 FSBOBR.com Listings) AND NONE ARE PENDING or Under Contract.

2.) IN MLS AREA 53, HOW MANY COMPETING HOMES ARE FOR SALE VERSUS HOW MANY SOLD IN PREVIOUS 12 MONTHS?

Answer: 34 and 34. This means that there are just as many homes for sale as those that have sold in the previous 12 months, indicating an oversupply. And, this doesn’t include the many listings in Springlake either.

3.) AVERAGE DAYS ON MARKET APPEARS TO BE INCREASING IN NICHOLS ON LAKES!

In 2009, average DOM was 117 days. In 2010, it’s been 133 days. And, 9082 Winding Lake Ave has been listed since 12/2009. 2938 Tide Dr has been listed since 1/2010. 3336 Southlake Ave has been listed since 2/21/2010. 9084 Eastbank Ave has been listed since 2/1/2010. So, it appears the days on market is increasing.

NOTE: Data used with permission of GBRAR MLS extracted on 6/22/2010, from 6/1/2008 to 6/22/2010.

Wow, what a difference 6 months can make in a housing market. I appraised a home in Cottage Hill Subdivision 70809 in October 2009 and again in April 2010.

The differences in that housing market is like night and day. See Below!

Market Conditions Description in 10/2009:

Declining Market of -4.39% Since 10/2008. 28 Months Supply of Housing On
Market. 19 Competing Listings Does Indicate an Over-Supply (includes FSBO listings). 96% List-To-Sales Price Ratio. While comps 1-3 show 1-3
months marketing time, 28 Month Supply and an oversupply indicate over 6 months.

CLICK TO ENLARGE

Market Conditions Description in 4/2010:

Stable to Increasing Market of 8.49% Since 4/2009. 6.3 Months Supply of
Competing Housing On Market. 14 Competing Listings Does Indicate an Over-Supply (does not include FSBO’s). 97% List-To-Sales Price Ratio.

CLICK TO ENLARGE

NOTE: Based on Detached Single Family information from the Greater Baton Rouge Association of REALTORS\MLS for the period 10/01/2007 through 10/15/2009 versus 04/17/2008 to 04/17/2010. MLS Areas 53, 61 and 62, Slab Foundation, 2100sf to 2500sf, 6-10 to 16-20 Yrs old. This information was extracted on 10/15/2009 and 04/22/2010.

Tags: Baton Rouge Estate Appraisers, baton rouge homes, baton rouge housing, baton rouge real estate

Chart #1 includes ALL solds from November 2008 to November 2009 YTD indicating a +7.36% increase in median sales price. ALL home sales includes both new home construction sales and existing home sales.

Chart #2 includes ONLY solds of existing homes from November 2008 to November 2009 YTD indicating a -0.66% decline in median sales price.

Current Listings. Currently, there are 29 listings within Springlake, from $196,900 up to $288,900. Of these listings, 15 are new construction and 14 are existing homes. The Average Listing Price is $238,655, Average Listing Price Per Sq. Ft. is $139.56/sf, Median Listing Price $239,500 and Average Days On Market 104 days. FSBOBR.com indicates 11 more current listings in Springlake from $198,000 up to $265,900. Assuming the 11 FSBOBR.com listings are not listed in MLS, that would total 40 current listings in Springlake, which would appear to be an oversupply and possibly the reason that the existing median sales price basically didn’t increase from 11/2008 to 11/2009.