BR-area home sales up 3% in 2011
The Baton Rouge metro area real estate market rose 3 percent in December and finished off the year up 3 percent over 2010, leaving agents and others in the local real estate business breathing a sigh of relief and confident about 2012.
According to figures compiled by the Greater Baton Rouge Association of Realtors, local agents sold 6,582 houses in 2011, compared with 6,386 in 2010.
Dollar volume rose 3 percent as well, with $1.25 billion in homes sold.
The manager of C.J. Brown’s Sherwood office, Sandy Daly, estimated business was up more than 20 percent, which she said bodes well for 2012. Realtors she said she’s been talking to are optimistic.
“I’m a firm believer that excitement builds excitement, and when you’re positive you build that positivity into your actions and I believe that will spill over into the buying public.”
For the year, the market in East Baton Rouge Parish finished up 2.6 percent in homes sold, at 3,603 compared with 3,510, and statistically flat in dollar volume at $723.6 million.
Ascension Parish was up 3 percent for the year; Livingston was down 1 percent.
The “other” category, which is made up of West Baton Rouge, Iberville, East and West Feliciana and Pointe Coupee parishes, finished the year up 14 percent.
Kary Stevens, of At Ease Home Inspection, said he had a better 2011 and noticed the market began to recover after a slow start.
“The first part of last year, I started out a lot slower than normal and then it took off in May and it got pretty much to normal through the summer months,” he said. “I did more business in 2011 than I did in 2010.”
It should be noted that looking at figures over the past 10 years shows a 3 percent increase is modest indeed.
“I’m so grateful that we didn’t go down this year because that has been the trend since ’06 and ’07,” said David McKey, broker/owner of Coldwell Banker One, who said as of a month ago, the market had dropped 35 percent from 2007.
“I think the trend seems to have stabilized and seeing even a small increase is a very good sign,” he said. “I think people are feeling a little better about the market.”
Daly said the $185,000-$250,000 range is the most popular.
There’s a lot of activity under $300,000 and above $800,000, with the market for homes in between a little more quiet, according to Jan King, of Re/Max Real Estate Group.
“It just seems like the bottom end and the top end are moving and the middle moves slower for some reason,” King said.
“My word would be ‘balanced’ right now,” McKey said. “Sometimes our market swaps back and forth between a buyer’s market and a seller’s market, but I think it’s pretty balanced right now.
King said while it may sound silly to some, sellers shouldn’t underestimate the power of curb appeal and doing the little things when selling a home.
She said homes that a buyer doesn’t have to landscape, paint, steam clean or power wash are moving.
“The homes that are maintained, they’re going to move faster,” she said.
“There are homes that will come on the market today and by the weekend they’ll have multiple offers,” Daly said.
Daly described buyers’ mindset as: “If I’m going to make a commitment to buy a home in this market, I want to be wowed.”
Interest rates, which are historically low right now, continue to be a major incentive.
King said she had a buyer who closed on a house in University Club well before the customary end of the month to lock in a rate that was the lowest since 1971.
“They’re not going to stay this low forever, and I think that’s a huge incentive,” she said.
King said lenders are still insisting on good credit, and she doesn’t see that changing anytime soon.
“I think that’s still an issue in our market and across the country,” McKey said. “It’s something that’s hanging over the heads of first-time homebuyers.”
The Greater Baton Rouge Association of Realtors did not supply numbers showing inventory and the number of days on market, though McKey said those numbers are where they should be.
“We’re not overloaded with inventory right now,” he said.
Daly also pointed out the percentage of purchases made solely for investment purposes rose 6 percentage points to 17 percent for C.J. Brown in 2011.
“Investors buy when the market has bottomed out or it’s within a few percentage points,” she said. “When they’re willing to put their money into the market, I think that’s a real positive sign.”
Looking forward, Daly, King and McKey all think 2012 will see further improvement.
“My phone is ringing off the hook right now and I think now that we’re past Christmas, New Year’s, the BCS bowl game and the Saints, everyone is starting to call,” King said. “My phone has never rung this much in January.”
King said she gets the impression people who spent the first part of last year sitting on the sidelines are starting to get back in the market, adding she recently talked to a local jeweler who said the same thing about his business.
Her prediction on what kind of percentage increase will be seen 12 months from now?
“I’ll go 4 to 7 (percent) easy,” she said. “What’s that, 5 or 5½? I just feel good about it because of the activity right now.”
McKey said he noted a lot of optimism at a recent national Realtors meeting in Anaheim, Calif.
“The feeling is that the market is headed back up,” he said. “There was more optimism at that meeting than I’ve seen in a really long time.
“Everyone would like to see the market explode,” McKey said. “But I would just love to see an increase, I don’t want to put a percentage on it, but I would like to eclipse what we did from 2010 to 2011.”
Daly said she believes there is some stealth inventory in the market that could affect the numbers in 2012.
Short sales – approved sales of homes at prices lower than what the owner owes to the bank – could begin to affect statistics such as average sales price as people are forced to concede and sell homes for less than they wanted.
“We’re going to see it because I’m hearing more and more from my agents that they’re helping a seller do a short sale,” she said.
Taking a closer look at the numbers, in East Baton Rouge Parish, Realtors sold 266 homes in December compared with 261 that month last year.
Dollar volume, however, fell 9 percent, reflecting the sales of homes on the lower end of the price scale.
In Ascension Parish, Realtors sold 95 homes in December compared with 87. Dollar volume was up 14 percent to $20.5 million.
For the year, Realtors sold 1,290 homes compared with 1,248. Dollar volume rose 3 percent to $259.1 million.
In Livingston Parish, Realtors sold 70 homes last month, just one more than the 69 sold in December 2010. Dollar volume was down 1 percent to $9.8 million for the month. For the year,
Realtors sold 1,105 homes compared with 1,116. Dollar volume fell 5 percent to $168.6 million.
In the “otherparishes,” Realtors sold 45 homes compared with 46 in December 2010. Dollar volume was just under half the 2010 at $7.6 million. For the year, Realtors sold 584 homes compared to 512. Dollar volume rose 6 percent to $101.5 million.