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Key Market Indicators for Baton Rouge Capital Region

Key Market Indicators for Baton Rouge Capital Region. Homes continue to appreciate in value Home sales have stabilized, inventory is up, and forecasts for the market are positive Status of national market makes now a smart time to invest locally Industrial growth projected

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Key Market Indicators for Baton Rouge Capital Region

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  1. Key Market Indicators for Baton Rouge Capital Region • Homes continue to appreciate in value • Home sales have stabilized, inventory is up, and forecasts for the market are positive • Status of national market makes now a smart time to invest locally • Industrial growth projected • Investment in housing industry is catalyst to overall economy

  2. Research Shows:1. Homes in Capital Region Continue to Appreciate in Value • The average selling price of homes in the Capital Region has increased by more than 30 percent between 2004 and 2007, with the region’s average selling price of a home increasing from $143,976 to $196,329 during that time, according to GBRAR MLS stats.

  3. Research Shows:1. Homes in Capital Region Continue to Appreciate in Value 2. The Local Market Monitor, LLC, has rated the Baton Rouge home market as a “Fair Value” market, with homes steadily appreciating over the past five years. That report shows average home prices are up nearly 37 percent from 2003 to 2007. • The Office of Federal Housing Enterprise Oversight reports that new homes in Louisiana appreciated by 5.4 percent between 2006 and 2007, which is well above the national average of 1.79 percent appreciation for the same time period.

  4. Research Shows:1. Homes in Capital Region Continue to Appreciate in Value 5. The average cost of a new home in the Capital Region in 2007 is $236,680, and the average cost of a resale home in the Capital Region in 2007 is $188,751, according to GBRAR MLS Listings Information.

  5. Research Shows:1. Homes in Capital Region Continue to Appreciate in Value 6. 60% of the average homeowner’s wealth comes from their home’s equity, according to the U.S. Department of Housing and Urban Development. During the past three decades, home values have increased an average of more than 6 percent per year, according to NAR existing home sales historic series. 60% of homeowners’ wealth comes from home equity

  6. Research Shows:1. Homes in Capital Region Continue to Appreciate in Value 7. On average, the value of a home nearly doubles every 10 years, according to the National Association of Realtors existing home sales historic series. 8. The OFHEO report shows that foreclosure filings occurred on less than 1 percent of the households in Louisiana, ranking it among the nation’s top states between 2006 and 2007.

  7. Research Shows:2. Home Sales Stabilizing, Inventory Up, Outlook Positive • A total value of $1 billion of homes were sold in 2006, compared to $986 million in 2007, according to GBRAR MLS statistics. • The Capital Region had 1,400 new homes sold in 2006, compared to 1,039 in 2007. At the same time, 4,000 resales occur in 2006 in the Capital Region, compared to 3,772 resales in 2007. These numbers were gathered from the GBRAR MLS Listings.

  8. Research Shows:2. Home Sales Stabilizing, Inventory Up, Outlook Positive 3. The Baton Rouge Area Chamber’s analysis of the GBRAR MLS Listings show the Capital Region’s “months inventory” to have increased to 8 months for December 2007, signaling a “slow down” in the local housing demand. The greater inventory also reflects a larger population and anticipated growth and development in the near future.

  9. Research Shows:2. Home Sales Stabilizing,Inventory Up, Outlook Positive 4. Louisiana is one of only two states projected to experience growth in the housing industry between 2007 and 2008, and it is projected to rank among the top states for housing growth from 2008-2009, according to the NAHB Regional Outlook Report, presented by Director of Forecasting Bernard M. Markstein on Oct. 24,2007.

  10. Research Shows:2. Home Sales Stabilizing, Inventory Up, Outlook Positive • Population projections show growth for the nine-parish Capital Region increasing from 790,000 in 2007 to 809,282 by 2010, according to U.S. Census Data reported by BRAC. • Local economic development officials report several industrial and commercial investments are earmarked for the region in the coming months.

  11. Research Shows:3. National Conditions Make Now a Smart Time to Invest • Basic supply and demand theory – with less demand for materials and labor, more are available at a lesser cost and no delay. • More affordable housing costs help homeowners grow equity even faster.

  12. Research Shows:4. Anticipated Industrial Expansions for the Capital Region The Capital Region anticipates receiving billions of dollars of industrial projects, creating new jobs and pumping new dollars into the economy. This growth will increase the demand for housing.

  13. Research Shows:4. Anticipated Industrial Expansions for the Capital Region • Top state economists forecast 15,000 new jobs in the Baton Rouge Capital Region in the next few years.

  14. Research Shows:5. Housing Industry Has Significant Impact on Economic Development 1. The construction of 1,000 new homes will generate 2,200 jobs, $85 million in income and more than $11 million in state and local revenue in the first year, according to the National Association of Home Builders. • Every dollar spent in the home construction industry is estimated to have a multiplier effect of 7, according to economists. • According to economic calculations, the Capital Region received a $6 billion benefit from the housing industry in 2007. This 9-parish area reported 3,616 permits for new homes in 2007, with an average new home cost of $239,500. Thus, 3,616 x $239,500 x 7 = $6.06 billion.

  15. Research Shows:5. Housing Industry Has Significant Impact on Economic Development 4. Building and construction account for more than 17 percent of the local economy, according to BRAC.

  16. Resources Support Information Campaign • GBRAR MLS Listing Information • NAHB, including Regional Outlook Reports • CRBA membership surveys • Office of Federal Housing Enterprise Oversight • National Realtors Association • The Local Market Monitor, LLC • Baton Rouge Area Chamber • Parish Assessor Offices

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