Don't Wait on Foreclosures to Hit Baton Rouge

Brian Andrews with the Baton Rouge Business Report's "Real Estate Weekly" (1/29/08) offered the following on foreclosures in the Baton Rouge market. Buyers are missing great real estate opportunities and Andrews explains why here:

Headlines in the national press would lead most observers to believe that residential foreclosure levels are at historic highs from coast to coast. The truth of the matter is that while foreclosure levels are high, the lion's share are limited to certain geographic areas that do not include Louisiana.

According to a recent report by the Mortgage Bankers Association, new foreclosure rates in the third quarter of 2007 were the highest in Nevada, Michigan, Ohio, Indiana and Florida. The mortgage type with the highest default rate, adjustable rate subprime loans, is the worst in California and Florida, which together account for 33.8% of all foreclosure starts in the category. Previous data implies that if you take out the top five or six states in terms of foreclosures, the remaining states are fairly stable.

There is no doubt that there were subprime loans made in Louisiana that have gone or will go bad. It appears, however, that the levels are consistent with previous years and certainly not the epidemic level being experienced elsewhere.

The unfortunate consequence of the mistaken impression that foreclosure rates have spiked in Louisiana is that local homebuyers are delaying purchases, thinking that prices will drop as lenders take back properties. I just do not see this price drop occurring in the Interstate 10/12 corridor and I feel that homebuyers are unnecessarily delaying purchases.

With interest rates continuing to be at historically low levels and home prices returning to pre-Katrina levels, creditworthy homebuyers really have no reason to wait out the South Louisiana market. If, however, you are looking for a steal of a deal, considering picking up a foreclosure in Flint, Mich. You might want to wait until the temperature gets above freezing.
--Brian Andrews

Baton Rouge Home Pricing on Par with SEC Cities

Thanks to the Baton Rouge Business Report's "Daily Report" for the following:

LSU’s football team might lead the SEC Western Division, but Baton Rouge home prices are in the middle of the Southeastern Conference. A Coldwell Banker report that ranks home prices in college towns found that a 2,200-square-foot home with four bedrooms and two-and-a-half baths costs $250,444 in Baton Rouge—just above the SEC average of $246,123 for the same house. Columbia, S.C., home of the University of South Carolina, was the least expensive SEC housing market, with a similar home costing just under $200,000. Gainesville, Fla., home of the University of Florida, was the most expensive, at $305,750. That’s nothing compared to Palo Alto, Calif., home of Stanford University and the most expensive housing market in a college town, where the standard home would cost nearly $1.7 million. Muncie, Ind., home of Ball State University, was the least expensive market, with an average home price of $150,000.

TNDs Gaining Popularity in Baton Rouge

The popularity of TNDs is in full swing in Baton Rouge. TNDs, the acronym for Traditional Neighborhood Developments, are attractive to homebuyers and retailers alike because of the sense of community they help foster.

TNDs successfully attract homeowners and retailers alike for a win-win formula. Homeowners enjoy being able to choose a home which fits their needs in a range of housing spanning condos to high-end single, family residences--all within blocks of each other. That often means families with children can have their retired grandparents living conveniently nearby.

Retailers look forward to locating in TNDs because of the more personalized customer service they can offer while enjoying a more loyal clientele.

To top it off, green spaces within the TND make leisure time more accessible to residents and the commercial spaces on site mean not having to fight traffic to get things done. The developments become a village within a city, hence the name "traditional neighborhood development."

Here in Baton Rouge, two TNDs currently under construction, Perkins Rowe (Perkins at Bluebonnet) and Willow Grove (right off Perkins Road) may soon be joined by Rouzan. Rouzan, which will be built on the 119-acre Ford Pasture site, will feature 800 residential units, split evenly between single-family homes and condominiums/townhomes, along with 45,000 square feet of office space, 45,000 square feet of retail space and 10,000 square feet of restaurants/cafés/delis. It also will contain a 20,000-square-foot library, 100-student Montessori school, a church and 23 acres of open space, including a village green and small parks. Plans for Tommy Spinosa's Rouzan are set to go before the city-parish Planning Commission on Oct. 22

Redeeming Airline at Bluebonnet

Have you watched the old Plantation Inn at the corner of Airline at Bluebonnet get bulldozed into oblivion? Probably not too many tears shed.

No big-box store here. That corner is being developed into a 50,000 square foot shopping center. The $10 million facilty will fill in the shopping "hole" and draw shoppers from Airline and Jefferson highways.

Expect commercial development to now move forward on the stretch of Bluebonnet between Airline and Jefferson. Click here for the Baton Rouge Business Report's link to the architect's rendering of what the shopping center will look like.

How is Baton Rouge Real Estate Doing?

If I'm asked anything as a realtor, I'm asked what I think about what direction the local housing market is going in terms of value. My answer is always positive because from what I see in the market, the Baton Rouge metro area simply isn't feeling the pinch being experienced elsewhere in the nation.

The forecast for home prices going up in Baton Rouge is milder, though, at 4.1% when compared to other Louisiana markets. That's largely due to the fact that Baton Rouge home prices have rallied substantially ever since Katrina, perhaps in greater measure than the rest of the state. Click HERE to see a current forecast of the various Louisiana markets along with analysis.

People I talk to still have the jitters that the impact the housing market nationwide is going to create a domino effect for Baton Rouge. But the folks at HousingPredictor.com seem to think that the U.S. has already turned the corner on the softening housing market. According to that website:

The tide is turning and the worst may be over in the national housing market slowdown, according to the latest assessment by Housing Predictor. The real estate slowdown experienced in the majority of the U.S. is signaling a change.

Housing Predictor continually updates its more than 250 local housing market forecasts in all 50 states, and at least 18 states now have housing markets that are appreciating, many with increased sales volume as a result of lower prices than in 2006.

Overall 56% of the nation's housing markets are appreciating or have stabilized, according to the study. Ten states are experiencing markets that are stabilizing.

Just in cases you were wondering, Louisiana is indeed one of the 18 states in the nation with appreciating values. To see just what HousingPredictor.com is saying about the state of the nation's real estate market, click HERE.

Foreclosures in Louisiana?

When local folks read the national news about their declining real estate sales, they automatically assume what they read also applies to our own Baton Rouge market as well. I remember, several months ago, a friend of mine (having read articles in national magazines on the softening real estate market) hinted at his fear that we were on the verge of seeing a lot of foreclosures soon hitting the Baton Rouge market. Well, how is Louisiana faring in the number of foreclosures compared with the rest of the nation? Are things just as shaky here as they are in other regions which just over a year ago were HOT real estate markets?

Not at all! At least not when you consider the list of "hot" foreclosure markets in the U.S. In fact, not only is Baton Rouge holding its own against growing foreclosures nationwide, but the entire state of Louisiana is still going strong, thank you. The "Baton Rouge Business Report" reports it this way:

CNNMoney is out with a list of the 500 ZIP codes where the most U.S. foreclosures have come from during the current housing bust. Nearly 28% have come from California, according to the survey by RealtyTrac, and Florida was a distant second. There were 72 foreclosures in Florida during a three-month period that ended in the middle of this month. The hardest hit zip code was 44105, in a poor section of Cleveland, where there were 783 foreclosure filings. No Louisiana ZIP code was found on the list, which was dominated by rustbelt cities hurting from manufacturing downturns and sunbelt cities where home prices skyrocketed over the past few years.

Check out the complete list here.

New Development for Perkins Road Overpass

If you're familiar with the Perkins Road Overpass area, you know the charm it offers. And Perkins Road Hardware was an icon of the community feel nearby residents enjoyed. That changed somewhat when that "institution" was gutted by fire in December.

That property has now been sold and will be redeveloped. The property will be a commercial and residential mixed use development. Two restaurants, one casual and one more upscale, have agreed to the idea of locating there with the potential of a third. In addition to the restaurants, the residential section will be a three-story condominum area boasting four or five units.

Local residents and shop owners are hopeful the new development will maintain the esthetic appeal already evident there.