BusinessReport.com

If you frequent the south Baton Rouge area of University Garden—the so-called “-dale” streets near the LSU lakes—you might have noticed a lot of the picturesque, post-war-era cottages seem to be sitting on the market for a long time.

It’s not your imagination. For Sale signs are gracing the lawns of single-family homes in the neighborhood nearly twice as long as they did during the same period last year—126 days on average, compared to the more typical 63 days in 2006.

“Put it this way: This winter I was able to renovate a house and put in a garden and organize my garage because things were so slow,” Realtor Della Neely says. “It was just that quiet.”

Indeed, agents throughout the area report that the seasonal slowdown they experience every winter was particularly acute this year. That may be in part because last year the city was still in the throes of post-Katrina transactions, which contributed to a busier-than-usual 2006.

But the University Gardens area of Southdowns appears to be unique in that property, which is among the most desirable in the area, is languishing longer than in nearby neighborhoods. Consider that homes in the Garden District are spending just 49 days on average on the market this year, compared to 68 days at this time last year. In other areas of Southdowns, they’re also selling more quickly, in about 65 days compared to 72 last year.

So what’s the deal?

“They’re overpriced,” says Vicki Spurlock, whose brokerage Locations Real Estate specializes in the Southdowns neighborhood. “They’re just off the charts.”

Indeed, prices in the area have shot up in the past year. The average sale price so far this year is more than $291,000, an increase over last year of 18%. The average price per square foot is also up to $143, compared to $139 in 2006.

Those prices are high, and sellers are getting them as long as they stay in that range. The problem is too many want even more and are pricing their properties out of the market. Still starry-eyed from the frenzy that was generated by Katrina in their neighborhood, which was appealing to storm victims because of its abundance of attractive starter-size homes and proximity to LSU, they’re getting a little greedy.

“People have overpriced, and that’s just the bottom line,” Neely says. “They’re thinking it’s still Katrina and it’s not.”

Spurlock, for instance, represents a couple who originally put their home on the market themselves, listing the 2,400-square-foot property for more than $400,000. The house, which had an unusual layout to begin with, sat on the market for nearly nine months before the frustrated owners hired Spurlock. She not only advised them to make some cosmetic changes to the interior, but also convinced them to lower the price. Within two weeks, the house was under contract.

“The ones that are sitting for a long time are the ones that are overpriced,” Spurlock says.

Adding to the dynamic, agents argue, is the proliferation of homes that are for sale by owner. A growing number of sellers are choosing to go it alone and save the 6% commission an agent makes off a sale. Problem is, too often sellers price their homes too high.

“The FSBOs don’t move as quickly because they’re generally overpriced,” Spurlock says. “And for some reason you see that more in these older neighborhoods.”

Compounding the situation in an older neighborhood like University Gardens is the fact that the land is valuable, with lots alone averaging from $150,000 to $175,000. But many of the homes, while charming in one respect, need updating if not a total renovation. Plenty of buyers are simply unwilling to shell out $150 a square foot on a home that lacks walk-in closets or granite counters, once luxury features that are now standard in even cheap new construction.

Scott McLaughlin knows that all too well. He put his 2,600-square-foot home on the market in mid-February and thought it was going to sell immediately. It didn’t.

“We were asking the proper asking price, but it was higher than average for this neighborhood because the house is a little bigger than most of the ones around here. So that may have been what held us back,” he says.

Still, the McLaughlins were lucky. They found a buyer within two months without having to lower the price. He offered slightly less than they were asking, and they accepted.

“It helped that he’s real handy, so he’s not afraid to take on the painting and carpeting and some of the other updating that needs to be done,” McLaughlin says.

The McLaughlins may have also been the beneficiaries of the seasonal uptick that Realtors have begun to notice in just the past month—not only in University Gardens but also throughout the city. Since the beginning of April, the market appears to be picking up significantly. It’s a little later than usual, but better late than never, according to local agents who say it feels good to be busy after such a long dry spell.

“It’s been a little bit scary,” Spurlock says. “But it’s starting to pick up now, and it’s going to do just fine.”