But it is important for people in Louisiana to understand that we have weathered that storm and have actually come out on top.
Baton Rouge, LA (PRWEB) June 23, 2008
Despite national trends, the housing market is thriving in Louisiana. "Louisiana's overall economy is strong, home prices are stable and interest rates remain favorable," said Mark Rodi, 2008 Louisiana REALTORS President and Broker/Owner of RE/MAX Affiliates in Metairie. "Throughout the state, we are seeing a very solid housing market."
So solid, in fact, that some of the national media is beginning to take notice. In Money magazine's recent ranking of the "100 Biggest U.S. Markets," two Louisiana metro areas are among a handful of major local markets where home values have appreciated. New Orleans and Baton Rouge ranked second and third respectively, behind Birmingham, Alabama in a forecast of the top 25 southern markets. While homes in some parts of the region were projected to lose as much as 25% of their sale value by 2009, homes in the New Orleans area are expected to gain 2.2%, with Baton Rouge at 1.9%.
Meanwhile, a study by the Office of Federal Housing Enterprise Oversight shows that the Houma-Thibodaux housing market is the fastest growing in the nation. Homes appreciated by over 11% in the one year period from April 2007 to April 2008. The same report ranks Louisiana 13th among all states in appreciation rates, with a 3.3% increase for the year. In contrast, the nationwide average fell 3.1%.
"From a national perspective, there are certainly areas of the country that are experiencing problems with overpricing and foreclosures, but this has to be viewed in perspective," said Louisiana REALTORS Chief Executive Officer Malcolm Young. "2007 was actually the fifth best year on record and very similar to the home sales and price gains experienced in 2002, when consumers across the country were very confident about the market."
Research by the National Association of REALTORS shows that prices nationwide are beginning to stabilize, with a modest increase in property values expected in the coming year.
"It's true that nationally, real estate has taken a hit this year," said Rodi. "But it is important for people in Louisiana to understand that we have weathered that storm and have actually come out on top."
"Buying a home in Louisiana now is as good of an investment as ever, and over the past 40 years, no other investment has delivered a more consistent positive return than real estate."
A booming oil and gas industry, low unemployment rates and key economic development projects throughout the state have contributed to the health of Louisiana's real estate market. The development undertaken as a result of the post-Katrina Gulf Opportunity Zone (GO Zone) incentives, and the economic shift that took place after Katrina and Rita has also helped to strengthen a number of Louisiana markets.
Most published reports on the nationwide housing market focus on the growing number of foreclosures. In Louisiana however, delinquency rates remain at normal levels, and the number of foreclosures are well below what is being experienced in other parts of the country.
"Louisiana is just not seeing the same problems regarding subprime loans that are being publicized nationwide," said Rodi.
Young suggested that while a wide disparity exists in the performance of housing markets across the country, there is a tendency to generalize real estate, often resulting in an inaccurate picture.
"It is important for buyers and sellers to understand that real estate markets are highly localized," Young said. "What impacts one area strongly may be irrelevant someplace else."
"Even on the state level, it is important to evaluate each locality as its own separate market in order to understand what is going on there. In observing what is happening throughout our state, our market is strong."
Louisiana REALTORS is a member-based trade association established to assist its members in the business of real estate in Louisiana. LR represents its membership on important real estate related issues to state and federal government, while providing legal assistance, professional development opportunities, discounts and unique services for its membership. The Louisiana REALTORS Association and other industry groups work to pass legislation that is favorable to Louisiana's real estate industry and protects private property rights.