Mayor: Baton Rouge real estate remains healthy

• By GARY PERILLOUX
• Advocate business writer
• Published: Nov 25, 2008 - Page: 1A - UPDATED: 12:05 a.m.

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By Halloween, sales of Baton Rouge-area homes had climbed to 6,413 and produced $1.29 billion in income — impressive numbers in a vacuum.

Yet 2008 has begun to look a bit scary for local real estate. The last time home sales were this low 10 months into the year came in 2002, a post-recession year.

In 2006, the year after Hurricane Katrina, Baton Rouge produced $470 million more in sales volume and 3,000 more houses sold by Halloween than it has in 2008.

Baton Rouge real estate leaders say a variety of influences — a settling back down of the market after Hurricane Katrina, a further dampening of the market by Hurricane Gustav in September, and fear from a national real estate slump and recession — have conspired to make too many people sit on the sidelines.

That shouldn’t be so, Mayor-President Kip Holden said Monday at a news conference scheduled to buck up confidence in Baton Rouge real estate. A button he and others wore read: “We believe in Baton Rouge! What Mortgage Crisis?”

“We cannot sit idly by and allow the citizens in our community to have a false view of our local economy,” Holden said. “The only thing that’s stopping our local economy now is fear.”

A series of real estate professionals, Metro Councilman Mike Walker and Adam Knapp, the Baton Rouge Area Chamber chief executive officer, delivered messages that bulwarked a similar theme: Baton Rouge is better off than most of the U.S.

“Yes, we have suffered from the downturn in the economy, but far less than has been seen in other states,” said Jane St. Amant of the Women’s Council of Realtors.

St. Amant bluntly put the market in perspective. In 1986, she sold two houses. In 2008, she’s sold three dozen so far — and not because her sales skills alone have skyrocketed in the past two decades.

The oil bust and savings-and-loan crisis of the mid-1980s led to interest rates of 17 percent and 18 percent, she said. Realtors prayed for 11 percent.

Mortgages can be had today at half that once-longed-for rate, said Mike Anderson of the Louisiana Mortgage Lenders Association. FHA, or Federal Housing Administration loans, are available at 5.5 percent, with a 3 percent down payment and a credit score of at least 580, considered well below average.

“The whole mortgage crisis was created by five or six states,” Anderson said. “There is no mortgage crisis in the state of Louisiana, especially East Baton Rouge.”

Housing inventory in greater Baton Rouge — a measure of how long clearing the current supply of houses might take — swelled to more than a year’s volume in September because Hurricane Gustav damage shut the real estate business down for much of the month.