The Baton Rouge real estate market continues to make significant progress in 2016. Although still below the national average, home prices and appreciation rates for Baton Rouge real estate have made their way back into the mix, with prices in the second quarter growing relative to last year. For Baton Rouge real estate investing purposes, gains in the last three years have extended the trend of positive price growth after the recession. Even better, the Baton Rouge housing market continues to see major improvements, as home affordability in Baton Rouge is now among the lowest in the country, which should benefit current and future investments. While the second quarter saw positive benefits for the Baton Rouge real estate market, the trend should continue in the second-half of 2016.
Baton Rouge, LA Real Estate Market Statistics:
The Baton Rouge real estate market is slowly shaping up to be an investor-friendly market. Home prices are right below the national average, while appreciation rates continue to gain ground in comparison. One-year appreciation rates for Baton Rouge real estate were 2.1 percent during the second quarter, compared to the national average of 4.9 percent. Three-year rates grew to 8.5 percent, but still below 17.8 percent achieved by the rest of the country. However, price appreciation and principle payments in the last three years have boosted total equity growth since the recession. For those considering Baton Rouge real estate investments, the following outlines appreciation rates in previous years:
- Homes purchased in the Baton Rouge, LA housing market one year ago have appreciated, on average, by $6,951. The national average was $14,963 over the same period.
- Homes purchased in the Baton Rouge, LA housing market three years ago have appreciated, on average, by $23,949. The national average was $46,878 over the same period.
- Homes purchased in the Baton Rouge, LA housing market five years ago have appreciated, on average, by $33,562. The national average was $82,353 over the same period.
- Homes purchased in the Baton Rouge, LA housing market seven years ago have appreciated, on average, by $38,706. The national average was $77,054 over the same period.
- Homes purchased in the Baton Rouge, LA housing market nine years ago have appreciated, on average, by $35,747. The national average was $31,126 over the same period.
For Baton Rouge real estate investing purposes, total equity gains have fallen short of the national average for the past nine years. In fact, the only time it surpassed the national average was in 2005, earning $77,185 in total equity compared to $34,380 achieved by the rest of the country. Although nowhere near where investors and homeowners would like them, appreciation gains for Baton Rouge real estate have improved and remain competitive compared to other markets.
During the second quarter, the Baton Rouge real estate market has also witnessed a smaller pool of foreclosures than previous years. According to RealtyTrac, the number of Baton Rouge properties in some stage of foreclosure was 638 during August 2016, which is much lower than other markets. Although the number of foreclosures in Baton Rouge increased 25 percent more than the previous month, it was still 47 percent lower than the same time last years. However, the number of Bank Owned properties for Baton Rouge increased during the second quarter. The number of REO properties in Baton Rouge increased 28.1 percent from the previous month, and 5.1 percent from the same time last year.
Baton Rouge, LA: Real Estate Market Summary:
- Current Median Home Price: $188,700
- 1-Year Appreciation Rate: 2.1%
- 3-Year Appreciation Rate: 8.5%
- Unemployment Rate: 6.0%
- 1-Year Job Growth Rate: 2.8%
- Population: 229,426
- Median Household Income: $38,974
Baton Rouge, LA: Real Estate Market (2016) — Q2 Updates:
The median home price for Baton Rouge real estate was $188,700 during the second quarter, compared to the national average of $239,167, with homes appreciating at a one-year rate of 2.1 percent, and a three-year rate of 4.9 percent. Despite lower numbers than the national average, the Baton Rouge real estate market continues to prosper in 2016.
As the capital of Louisiana and the second-largest city in the state, Baton Rouge continues to be home to one of the more affordable housing markets in the nation. Homeowners paid 9.0 percent of their income to mortgage payment during the second quarter, whereas the national average paid 15.8 percent. In fact, that percentage was better than its historical average of 12.0 percent. Another component helping the Baton Rouge housing market is new housing construction. The second quarter saw the level of construction reach 24.1 percent above the long-term average, while the number of single-family housing permits rose to 7.3 percent, as opposed to the national average of 10.6 percent.
The local economy is another factor that will benefit or hinder the Baton Rouge real estate market in the second-half of 2016. Although employment has held up and is on an upward trend, the unemployment rate in Baton Rouge continued to lag the national average. The second quarter saw unemployment reach 6.0 percent during the second quarter, compared to the national average of 4.9 percent. On the flip side, one-year job growth for Baton Rouge was better than than the majority of the nation, growing to 2.8 percent compared to 1.9 percent.
According to the National Association of Realtors, the Baton Rouge real estate market is forecasted to experience weaker price growth in the next 12 months compared to the rest of the U.S. The second-half of 2016 is expected to grow at a rate of 2.7 percent for the rest of the year, as opposed to the national average of 3.6 percent. Slowly but surely, the Baton Rouge real estate market continues to make substantial ground in 2016 and the trend should continue in coming years.
