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While the Baton Rouge residential real estate market experienced record growth from 2019 to 2021, that growth has slowed significantly in 2022 and 2023.
That’s according to Cook, Moore and Associates owner Tom Cook, who spoke at the annual TRENDS seminar sponsored by the Greater Baton Rouge Association of Realtors on Thursday.
After dropping 9.55% from 2021 to 2022, dollar volume dropped another 24.35% from 2022 to 2023. That metric, which peaked in 2021 at almost $3.8 billion in sales for all homes, has fallen to about $2.6 billion in 2023. Dollar volume had been steadily increasing since 2015 prior to the downturn in 2022.
Median home prices, meanwhile, increased by 1.57% from 2022 to 2023. Of the nine parishes in the Baton Rouge metropolitan statistical area, only East Baton Rouge Parish saw a decrease in median home prices, dropping 10.87%.
Months’ supply—a fairly accurate indication of home absorption at current sale rates—increased from 2.1 months in 2022 to 3.3 months in 2023, a 57.14% uptick. Months’ supply was at its lowest in 2021 at 1.6 months. Ascension Parish and Livingston Parish saw the greatest increases in months’ supply.
Median days on market, or the amount of time it takes to sell a home, increased from five days in 2022 to 19 days in 2023, a 280% uptick. While that may seem like a dramatic increase, most market analysts agree that 30 to 60 days is an acceptable time period to generate a contract for purchase.
Total single-family permits, which peaked at 4,430 in 2021, fell to 3,502 in 2022 and 3,001 in 2023, though 2023 permit data is preliminary.
All market indicators point to a slowing residential real estate market, largely driven by high interest rates and a lack of population growth. Looking forward, market conditions are unlikely to change much in 2024, as interest rates are unlikely to fall as previously expected.
“I don’t think next year’s going to be tremendous, but I don’t think it’s going to be horrifically bad either,” Cook says. “Remain calm.”
