Coldwell Banker Gosslee

Coldwell Banker Gosslee's September Housing Market Report


Mortgage Rates Are Definitely Showing An Impact
Posted: October 28, 2019 by Jessica Wimberly

Seriously y’all, where did this year already go? I can’t believe we are at Halloween already!

I’ve been writing for a while about the real estate market, so I can safely say there is nothing spooky about our market. In fact, things are looking kind of sweet.

Sorry for the really bad Halloween puns, but it is definitely one of my favorite holidays of the year and I can’t wait to get my kids into their costumes.

The housing market in Northwest Louisiana is doing really well. In fact, while the National Association of Realtors just reported that September was the second straight month of home sale declines, we have seen three straight in the positive direction.

Caddo, Bossier and Desoto Parishes had a combined 415 September home sales last month and the median (middle of all of them) price of these was $178,000. This was up 16% and 5%, respectively, over last September. Our 415 sales were dramatically higher than our 5-year average for the month of 365.

We would be even stronger if we weren’t seeing a decrease in sales below $200,000. While last year this price-point was strong, so far in 2019, we are down a combined 4.4%. Last year at this time I shared that the $200,000 and below market was up region-wide by 6.5%.  Looking even closer at our current market, Bossier’s more affordable home sales are down 8.4%. This truly is a stark contrast to last year. 

On the flip side, the move up and luxury homes sector is doing much better.

The $200,000-$400,000 market is up 9.1% in Northwest Louisiana, while Caddo Parish is even higher at 13.8%. Last year in Caddo, we were up just 37 homes in this price point with just three more homes sold than the prior September in the $300,000-$400,000 range.

Led by a 48% increase in the number of $500,000 homes sold through September in our three parishes, the higher-end is also doing very well. This is awesome because we are starting to whittle away at the large number of available luxury homes.

I’ve spoken to a lot of our agents, our company leadership and our friends at Fairway Mortgage and most believe the trend of buying of more expensive properties is because of mortgage interest rates. They have dropped so much over the last year that buyers can “get more house for their money.”

Over the last year, as unemployment rates fell so did mortgage rates. This was an unexpected gift to home buyers as most experts believed rates would rise in 2019. Instead, they’ve lowered from 4.75% to about 3.75% for a 30-fixed mortgage. Here is a chart I created that shows the difference in monthly payments:

Mortgage Amount

September 2018 Monthly Payment

September 2019 Monthly Payment

Difference PER Month for 30 years

$200,000

$1,043

$926

$117

$250,000

$1,304

$1,158

$146

$300,000

$1,565

$1,389

$176

$350,000

$1,826

$1,621

$205

$400,000

$2,087

$1,852

$235

$450,000

$2,347

$2,084

$263

$500,000

$2,608

$2,316

$292

 

I obviously over-simplified the mortgage process, but the chart clearly shows that the savings in monthly payments that are seemingly being put towards purchases of more expensive homes.

Also, don’t forget that those who bought homes just after the recession (or re-financed) may have had historically low mortgage rates. Naturally, they wouldn’t have wanted to give those great monthly payments up. But with the rates now very close to historical lows, they are also taking advantage and moving up.

And, don’t forget, region-wide our median home price is $96,000 cheaper than NAR’s national mark of $272,100!

This was one of the first months this year that our overall trends were in sync with the U.S. figures. Take a look:

 

Sales/% change vs last September

Prices% change vs last September

Inventory/% change vs last September

Time on Market

U.S. stats

5.38 million/+3.9%

$272,100/+5.9%

1.83 million/-2.7%

32 days

NW LA

415/+16.0%

$178,000/+5.0%

2060/-4.0%

74 days


While nationally there is a 4.1 month supply of homes on the market (a strong advantage to buyers as 6-months is considered a “balanced” market), we are at 5.2. While we have dropped
While nationally there is a 4.1 month supply of homes on the market (a strong advantage to buyers as 6-months is considered a "balanced" market), we are at 5.2. While we have dropped from last year's 5.5 month figure, we don’t have a huge demand problem. In fact, our median days on market for homes that sold in September was a bit more than double the national mark.

But - and this is a biggie for buyers to remember – sellers, with the help of their agents, are doing a great job in pricing their homes to meet market demand. We know this because homes are selling within 97.5% of their listing price.

And while I really don’t mean to be “salesy,” I want to remind potential buyers that there are more than 2,000 homes available for sale in our market and because of the interest rates now could be a good time for you to buy a home. This really holds true for first-timers who are renting. Take a look at my post from last month where I showed the amount a home a renter might be able to afford.

I hope you are enjoying these articles. You can dig deeper into the number with our Coldwell Banker Gosslee Residential Real Estate Report.

I hope you have a fun and safe Halloween and start to enjoy the beginning of the Holiday season.

If you have any questions, please ask any of our 150+ agents in Shreveport and Bossier City or reach out to me at jessica@cbgosslee.com

 

 

 

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