B.R. home prices buck national retreat
At the close of 2011, average U.S. home prices reached lows not seen in a decade, according to the Standard & Poor's/Case-Shiller index, which tracks 20 metros around the nation, not including Baton Rouge.
While prospective homebuyers who are calling local real estate agents such as Jerry del Rio have obviously read the widespread media reports about rock-bottom home prices that followed the report's recent release, del Rio says the national headlines don't reflect what's happening in the Baton Rouge market.
"People are reading the paper and coming in here thinking they're going to get an unbelievable deal," she says. "They're not. If you're talking about a foreclosure or a home that's been on the market for a long, long time, then maybe. But if it's a new house or a recently built home in good condition, [the seller's] going to get their price."
Home prices in the Capital Region have remained relatively stable, del Rio says, because the local market never experienced the dramatic pre-recession price jumps that occurred in nearly all of the nation's 20 largest metros. Put simply: No bubble, no bust.
The Standard & Poor's/Case-Shiller index says the U.S. saw an overall 4% drop in home prices last year. The Greater Baton Rouge Association of Realtors reports the average sales price in the eight-parish region it tracks dipped to $190,340 in 2011, down from $195,594 in 2010—a drop of about 2.7%.
"I don't think that's a reflection of individual home values. I think we're just selling more less-expensive homes. That was the crux of our sales," says Burns & Co. President Paul Burns of Baton Rouge's decline, noting the average size and price of new homes on the market have also been shrinking.
When CoreLogic recently released its January Home Price Index, it showed Baton Rouge home prices—including distressed sales—slipped 5% on the month compared to January 2011. But excluding distressed sales, prices actually rose by 0.1%. While that's a modest rise, to say the least, it marked the first time the Capital Region saw a rise on any sector of CoreLogic's Home Price Index since September, when a 0.1% increase was also recorded, excluding distressed sales.
Preliminary February figures are looking even more promising for the local market. Though all of the month's sales have yet to be recorded, as of today they're up an impressive 19.6% over February 2011: 505 compared to 422. The average sales price is $191,359, the highest monthly average since October and a 6.6% increase over the average price of $179,428 in February 2011.
"Hopefully we've bottomed out and we're headed toward a little more stability," Burns says.
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