October home sales decline 27 percent

• By CHRIS GAUTREAU
• Advocate business writer
• Published: Nov 18, 2008 - Page: 1D - UPDATED: 12:05 a.m.

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Home sales sank 27 percent in October from a year ago in the latest sign that economic fears are filtering into south Louisiana. 

Figures tracked by the Greater Baton Rouge Association of Realtors show 530 homes changed hands last month in the eight-parish market. The total sales volume of $104.2 million was down 25 percent from the year-ago period.

“It’s a sign of the times,” David McKey, head of Coldwell Bank One, said of the October figures. “People are just hanging on, waiting to see what’s going to happen. There’s a lot of fear out there.”

Sales figures have fallen in each month this year. Year-to-date figures have been near or below 2003 levels at least since August.

Housing inventory, another key measure, improved some last month after a big run-up caused by Hurricane Gustav in September.

The storm, which caused widespread power outages for several days, brought business in the area to a standstill until electricity could be restored. With fewer sales being completed, September housing supplies skyrocketed to 12.4 months’ worth of inventory.

The October report shows the figure fell to 9.1 months of inventory, an indication that some demand is returning.

McKey looked on another bright spot in the October figures. Despite falling sales, average transaction amounts have risen most months in 2008, gaining nearly 2 percent last month.

The trend is good news for the market, he said, since it shows that, unlike many other weaker U.S. markets, Baton Rouge home values are still rising.

The association reported that:

• In Ascension Parish, the 104 homes sold in October was a 23 percent drop from last year. Sales volume of $22.5 million was also a drop of 23 percent.
• In East Baton Rouge Parish, sales dropped 26 percent to 310 homes. Sales volume fell 22 percent to $63.5 million.
• The 83 homes sold in Livingston Parish was a 33 percent drop from a year ago. Sales volume fell 34 percent to $13.3 million.

In the market’s remaining five parishes — East and West Feliciana, West Baton Rouge, Iberville and Pointe Coupee — the number of sales fell by 13 to 33. Sales volume of $4.9 million was a 45 percent drop.

Through the first 10 months of 2008, 6,413 homes have changed hands in the market, a 22 percent drop from the same period in 2007 and below 2003 levels for the comparable period. The $1.29 billion in sales volume in 2008 is down by 21 percent.

The market has been losing steam since the post-Hurricane Katrina boom. Broader problems with the U.S. housing market and the credit crunch have softened the local market even more, though not as bad as other metropolitan areas.

R. Kelley Pace, director of LSU’s Real Estate Research Institute, said the flagging U.S. economy will continue to have an effect on local real estate.