We have compiled a year’s end market review and market trend summary for West and East St. Tammany Parish. This is an overview of a large area, and there may be pockets of smaller areas that could result in different data on the macro level.
There’s no doubt about it the 2018 housing market has seen its ups and downs. The year started with rising home prices, historically low mortgage rates and a definitive upper hand for sellers. In recent months though, home price growth has faltered, rates have risen to their highest point in nearly eight years, and favor has started to shift from seller to buyer.
Will these trends continue? Will housing experience the same wild ride in the new year?
The majority of the sales continue to be in the south end of the parish and on the west end of the parish. The maps below show the general location of the sales over the last year in St. Tammany Parish.
The major majority of sales have taken place west of the center of St. Tammany Parish.
Let’s review the last 5 years of median sale prices in West St. Tammany. The overall trend in the previous five years has been increasing sales prices.
Now Let’s drill down to the last 12 months and review what has been happening in West St. Tammany Parish.
The market data indicates that overall the market has experienced an increase of approximately 4% for 2018 with an average sales price of $258,700.
Although list prices have been up and down over the last 12 months list prices overall have declined in 2018
The number of sales has been declining since July. Part of this is seasonal; however, part of this is an indicator that the market is slowing down.
Days to sell are slightly increasing since June of 2018 but are still considered on the low end of the number of days to sell. However, the number of sales that are occurring has been in decline since July of 2018, and housing inventory has increased. These are signs that the market has peaked and is slowing down.
Housing inventory at the end of year has really taken an upward jump.
Now Let’s Review East St. Tammany
Again, The 5-year trend has been increasing year over year from $139,000 to $179,950 in 2018. However, Let’s drill down and take a look at the last 12 months in East St. Tammany Parish. Median Sale prices have experienced a slight increase over the last 12 months.
However, since July list prices have been declining and overall in the last 12 months, list prices have been falling. It will be interesting to review at the end of the first quarter of 2019 to see if the market trend continues.
Median days to sell is doing quite well at less than 50 days for the last 12 months.
In East St. Tammany Parish sale prices peaked in August, and List prices are in decline overall, days to sell are slightly increasing since June of 2018 but are still considered on the low end of the number of days to sell. However, the number of sales that are occurring has been in decline since August of 2018, and housing inventory has increased. The number of transactions also follows the selling season as the spring and summer are the busy times, and the offseason tends to be January, February, November, and December. Some of the data is indicating that the market has peaked and is slowing down.
Building Permit Indicators
St. Tammany Parish Permit Department reports indicate that New Construction has declined slightly but was overall very close when comparing 2017 to 2018.
As this market has experienced increases in value over the last 5 years, it appears that the market may be peaking at this time. I personally foresee some stabilization in 2019. The uncertainty of what will happen with interest rates and cost to build will have an impact as increases in wages do not appear to be keeping pace. Again, this would be affected mainly by the interest rates, cost to build and stabilization of demand.
As 2019 approaches, I am anticipating home sales to slow down and decline slightly. I think it will be a somewhat slower year as buyers continue to wrangle with higher mortgage rates after contending with several years of rapid price growth and the price to purchase new homes due to the increased cost. This appears to the trend for the Northshore area overall.
Will Mortgage Rates Continue to Rise?
Despite steady climbing for the past two years, mortgage rates remain lower than they were during most of the recession and below average for the type of strong economic growth we’ve been experiencing. That may change in 2019, as the 30-year, fixed rate mortgage may reach the 5+% territory. However, at the time of this blog post, interest rates were declining to a low of 4.44%.
The medium and long-term prospects for housing are good because demographics are going to continue to support demand. As the market slows the price appreciation, incomes will have an opportunity to catch up. With slower sales, inventory has a chance to normalize. A bit of slowdown in 2019 creates a healthier housing market going forward.
If you have any questions, we would be happy to assist you with your real estate appraisal needs. Please feel free to leave your comments below or to contact our firm for assistance. We wish everyone a very Happy New Year and a prosperous 2019.
The above statistics were taken from the local MLS/Gulf South Real Estate Network via my personal defined and mapped market areas. Keep in mind these statistics may not include total market data and times, due to previous listings via canceled or expired then possibly reissued and for sale by owners, but give a general idea of statistics if a single-family property is actively and reasonably marketed or priced. This is not to be taken as financial advice or legal advice but is only for information purposes only.