Home sales in the Baton Rouge metro area rose 7 percent in June and are up 14 percent at midyear, figures compiled by the Greater Baton Rouge Association of Realtors show.
While entry-level homes continue to dominate sales, Realtors have been reporting that prices have started to rise as inventory tightens and the number of days a home spends on the market drops.
The median sale price of a home in the eight-parish metro area was $177,950 in June, 6 percent higher than the year before, while the number of homes for sale fell 14 percent. That’s 5.7 months of inventory at the current rate, compared with 7.5 months a year ago.
“We have moved solidly into a seller’s market,” said Bridget Fredericks, owner/broker with Home After Home and 2013 president-elect of the Realtors’ association. “Anytime a buyer is competing with someone else to buy a house, it puts the seller in the driver’s seat.”
“You have to prepare a buyer that you can’t come in and offer a price that’s a lot lower,” agreed Paul Burns, of Burns & Co. Realtors, noting the gap between asking price and selling price has narrowed, particularly on homes under $250,000.
There were 27 percent more pending sales in June than the year before. New listings inched up 4 percent, while the average number of days a typical home spent on the market dropped to 81 from 91 days.
Taking a look at the first six months as a whole, there were 4,221 homes sold compared with 3,702 midway through last year, an increase of 14 percent. The number of pending sales was up 15 percent and the number of new listings was up 5 percent.
For the first half of the year, East Baton Rouge Parish saw a 16 percent increase to 2,369 homes sold. Ascension saw a 15 percent increase to 811 and Livingston rose 10 percent to 696.
“The market’s much more brisk than it was last year, but it’s by area and price range,” Burns said. “I wouldn’t say it’s brisk in all areas and price ranges.”
Following a few moribund years after the financial crisis, sales of larger, more expensive homes have started to pick up, leading to a 35 percent increase in sales at Burns & Co.
Burns crunched some numbers himself last week and said sales throughout the metro area are up 20 percent for homes above $350,000; up 33 percent for homes over $500,000; and almost tripled for homes over $1 million — to 15 from six homes sold in the first six-plus months of 2012.
Burns said much of the tightening of inventory is on the lower end of the spectrum.
“If you go up in price range, you have more houses on the market,” he said, noting the annualized inventory rate through the first half of the year is 9.6 months for homes above $350,000, 14.4 months for homes above $500,000 and 31.0 months for homes over $1 million.
Burns said Jamestown, University Gardens, Magnolia Lakes and Redwood Lake and Marshall Bond in Zachary are examples of areas where homes that are priced right “don’t sit very long.”
Fredericks said anything just to the south of LSU off Highland Road is moving briskly as well.
Fredericks is seeing a little slowdown in the first-time homebuyers market, the segment that has been powering the market the past couple years, though homes between $170,000 and $270,000 are moving.
She also said buyers interested in real estate as an investment have continued to move into the market because there are plenty of renters. With interest rates so low, “the past few years have been a good time to add real estate to their portfolio.”
Burns said buyers are coming into the market with a strong sense of what they want and move when they find it.
“People don’t want to have to do a thing,” he said. “People want it move-in ready; they want it light and airy. … They don’t want to paint; they don’t want to have to carpet. They want everything fresh and clean.”
Fredericks said most buyers that come to her say they want something to fix up, “but in the end, that’s not what they buy. They buy a house that doesn’t need anything. They start to think, ‘Do I really want to spend some time fixing up the place or do I want to spend my time enjoying it?’ ”