Published: February 27, 2018
Filed Under: Market Trends, Real Estate Investing
Have you seen all the new construction just a little bit north of the LSU campus?
Yes, I said north … not south. If you drive up there you will see new building after new building being built. My husband came home the other day and said, “What is that?”
Well, it’s LSU’s Nicholson Gateway Development. It’s 28 acres that will include apartment homes for upperclass men and women as well as graduate students. It also includes rec space, retail space, parking, and the LSU Foundation offices. The project is funded jointly by the LSU Property Foundation and private developers.
You’d think with all the new rental construction going on south of the LSU campus that we wouldn’t need anymore student housing. And, if you own a townhome or a condo nearby that your children live in while attending LSU you’ve got to be wondering what impact all this will have on your property values.
During the past few years we’ve seen new construction at The Cottages (now The Lodges at 777), The Exchange, Arlington Cottages and Townhomes, Wildwood, The Woodlands, Sterling Burbank and I’m sure I’ve left out a few. Not surprisingly, it’s about the money and what it costs to send your child to LSU.
The graph above includes all attached home sales (condos, townhomes, and duplexes) in MLS area 52 that were previously owned, i.e., not new construction. I decided to eliminate new construction from this analysis because it really is very different from the inventory of existing homes. Including those homes in the year they were introduced really screws these numbers.
What you see is that after Katrina we had a run up in the cost of condos, townhomes, and duplexes in the area. Some of that was speculative, and some was just a concern about having a place to go if you lived in New Orleans and a major hurricane was on it’s way. But around 2008 our market started to shift. There are a number of factors that contributed to this, and honestly, these averages smooth the losses in value in some student-centric neighborhoods near LSU.
When you combine the post-post Katrina effect of New Orleans residents returning home, with the problems the US economy was experiencing in 2008 – 2011, it’s not surprising that parents were not too keen on buying property for their children. Having worked with many parents during those years what I heard was,
“When the stock market looses that much value, you just don’t feel as comfortable buying a second home for your kids.”
What changed?
In 2011 The Cottages of Baton Rouge opened. They were nice. They were new. And they were expensive. As more and more new apartments were built, with rents around $700- $800/month per student for a 2 bedroom apartment and $600 – $700/month per student for a 3 bedroom apartment, the surrounding existing inventory started to once again become attractive.
A 2 bedroom/2 bath apartment at LSU’s new Nicholson Gateway Apartments will cost you $4,940/semester per student. That’s $9,960 for two semesters, and if you stay for the summer months it’s an additional $2,470. So that’s a little more than $1,000/month!
Click here for a link to the fee schedule. That’s pretty swank for a college kid. I have no doubt they will be very nice and a needed and welcome addition to the north side of the campus. For most of the parents I work with, however, they’re still going to be interested in some lower cost alternatives on the south side of the campus.
Published: February 7, 2018
Filed Under: Market Trends
While you may not know it from our recent temperatures, Spring is right around the corner. As we head into an historically busy time of year for home sales, many of my clients have asked about current market conditions and what’s in store for 2018.
Last week I read with interest The Advocate’s article on 2017 home sales in the greater Baton Rouge area. Yesterday The Business Report shared Corelogic’s report on home values in the Baton Rouge area. And while most of this is good news, those of us who live in and around the LSU area know that this part of town is a little bit different. Near LSU, home prices are the highest in the metro area, land is scarce, and we weren’t as directly impacted by the August 2016 flood as other parts of Baton Rouge. So I decided to dig a little deeper and share with you what’s going on in my neighborhood.
Here’s our chart from last year updated with this years’ numbers. After a significant rise in 2016, average home prices are holding steady. In light of the market upheaval we experienced after the flood, I’d say that’s pretty good news.
What I think is important to keep an eye on this year is “supply” and “days on market.” As of this morning there are 366 detached single family homes available in the areas between LSU and Country Club of Louisiana. Last year 1,340 homes were sold in this area. So, that means that there is currently a 3.3 month supply of homes available. For home sellers this is very good news. And take a look at what’s happened to days on market.
Predicting what’s going to happen to home values is a pretty risky business, especially in this part of Baton Rouge where you have a lot of variety in the types of homes available, their age, and condition. But when you have an asset that’s in short supply in an economy that’s strong, I think it’s reasonable to believe that home values should rise.
Real estate is local. Your agent should be, too. If you’re thinking about buying or selling a home in areas near LSU give me a call. The number is (225) 772-8709 or email me at [email protected].