That was a very quick 12 months in 2019!!
I think we have to start by taking a look at what our 2019 Forecast Indicated?
“Overall the housing market in Tangipahoa Parish was healthy in 2018 and as 2019 approaches, I am anticipating home sale prices to flatten out and remain stable. I think it will be a slightly slower year as the market continues to wrangle with possible higher mortgage rates after contending with several years of rapid price growth and the increased cost to build but not dramatically slow. This appears to be the trend for the Northshore area overall.
The medium and long-term prospects for housing are good because demographics are going to continue to support demand. Tangipahoa Parish has a number of developments in different phases of starting and building. As the market slows the price appreciation, incomes will have an opportunity to catch up. With slower sales, inventory has an opportunity to normalize.
Looking back I think that was a pretty good forecast for 2019!! I think the thing that drove the number of sales was that interest rates did not increase as many predicted. However, prices did flatten out and stabilized.
We have compiled a 2019 year’s end market review and market trend summary for Tangipahoa Parish. If you have additional questions, or in need of a real estate appraisal please reach out to us at 985-230-0730 or online at http://www.jmappraisers.com
There’s no doubt about it; the 2019 housing market has been busy. Eight out of the twelve months in 2019 exceeded the number of total sales compared to the months in the previous five years.
Housing Inventory for Tangipahoa Parish
Housing inventory has been a factor in home prices. At one point, there were less than four months of inventory on the market.
As you can see below, the number of active listings for the entire parish got as low as less than 600 homes total in a parish of 133,000 people.
The number of active listings of new home availability decreased as the year progressed; however, the number of new homes in 2019 was well above 2018 for the first three quarters of 2019.
The major area that was creating a housing issue was existing homes over one-year- old in the sweet spot of $150,000 to $175,000. The inventory got as low as 464 homes available in the entire parish. When you remove the homes that may not be market-ready (needs repairs) or in areas that are not as in demand as others, the number of available properties declines.
New Construction Permit News
Home builders will keep on building…
Home builders are poised to close out 2019 on a high. The National Association of Home Builders reported that builder confidence has reached the highest level since 1999. And housing starts and permitting activity continued to increase through November, the latest month for which data is available.
According to the Parish Permit office issued 728 new construction permits were issued in 2018 and 681 NC permits in 2019. The municipalities in the parish issues an additional permits for 519 units with a construction value totalling $14,856,900 combining these numbers with the parish permit numbers a total of 1,200 units were added (slightly lower than 2018) with a direct impact that total an estimated value of $167,381,940. There was also a total of 362 multifamily units permitted (*2).
The next three charts are based on the latest data available as of 2018. As you can see below the unincorporated areas are where the bulk of new construction is happening. (These numbers are reflecting 2018 on chart below.)*2
The professional and business services sector—the main driver of employment growth during the past decade—took a back seat to the healthcare and social assistance sector, at the time of writing this report the Tangipahoa Parish job reports indicated 1,338 job openings in the parish with almost 200 healthcare and Technical occupations available with an average wage of $64,789 per year. The overall average wage for available jobs in the parish is $37,600. The unemployment numbers in Tangipahoa Parish and the region are at historical lows. (source Online Advertised jobs Data 01/21/2020)
Median Household Income
How do we compared to the other Regions of the United States?
How Does The Housing Industry Impact The Parish Economy
According to the latest available data (2018) The Housing Sector has a major impact for the entire parish. 2,297 jobs are directly supported by the Residential construction sector in Tangipahoa Parish in 2018. This would rank between Administrative and Support, Waste Management and Remediation Services and Finance & Insurance jobs.
The total employee compensation and proprietor income equaled an estimated 83 millions dollars in Tangipahoa Parish. The estimated local sales taxes generated for 2018 by new residential construction equaled $7.9 million dollars in Tangipahoa Parish. Included in these estimates annual property taxes totaled $1.0 Million dollars. When you review the estimated economic impact of the residential construction activities for 2018 the number is quite impressive. The direct impact is $167,381,940, Indirect impact (supplies, goods and services) $52,053,660 and induced impact (Consumer spending) $41, 635,708 for a total of $261,071,312 just from the residential construction activities in Tangipahoa Parish. (This excludes property tax impacts) *2
Millennials Will Get Aggressive About Buying Homes
Realtor.com also notes that one demographic will be big buyers in 2020 – even if inventories are thin. That’s the millennials.
Apparently, younger buyers are eschewing inner-city living and have their sights set on 1,800 square-foot homes in the suburbs, with good neighborhoods and decent schools. Millennials will take more mortgages than baby boomers and gen-x’ers in 2020, the company predicts. Down payments from millennial buyers will also likely be bigger than ever.
The Tangipahoa Parish School Board has made headway in achieving unitary status in reference to the Desegregation case and at this time it appears headed in the direction of settlement. This along with improvements that many of the schools are experiencing should signal homebuyers that Tangipahoa Parish is an option; however, the lack of proper funding for facilities and staff could continue to hamper this areas of quality of life for current residents and future residents of Tangipahoa and in turn hurt the housing sector.
Will these trends continue? What will happen in 2020?
Well, if I knew 100% for sure I think I would buy a lottery ticket; however, after reviewing this information and looking at the market indicators like low unemployment, wages increasing and the number of developments that are currently under construction it appears that 2020 will be another good year for the housing and real estate market in Tangipahoa Parish.
Final Forecast For Tangipahoa Parish
Though the housing market has been lifted this year by lower mortgage rates and continuing job expansion, the growth has also been curbed by lower housing inventory and elevated home prices. As economic conditions are expected to remain favorable for homebuyers, more inventory especially existing homes are needed for further home ownership gains in 2020.
Following a year of declining interest rates, 2020 looks to be a year of stability, with fewer economic risks and low inflation giving the Federal Reserve little reason to shift interest rates. Borrowing costs are low, making it a great time to purchase a home
If there are no major changes caused by national economic issues home price growth will continue to stabilized, with a modest increase of just 0.8 to 1.5 percent
– Inventory will remain constrained, especially at the entry-level price segment of existing homes
– Mortgage rates are likely to bump up to 3.4 to 3.9 percent by the end of the year
– Tight inventory and low mortgage rates will lead to steady sales and a sellers market
– Buyers will continue to move to affordability, benefiting mid-sized market
Joseph Mier & Associates has served the Northshore Region for over 20 years and enjoys sharing information with the community on the real estate market.
If you have any questions, we would be happy to assist you with your real estate appraisal needs or real estate consulting. Please feel free to leave your comments below or contact our firm for assistance. http://www.joemier.com
As you review this information know that this is a high-level overview of the area as pockets of different areas on the macro level could show different results. All data used is from the Gulf South Real Estate Network Multiple Listing Services. This data does not include any for sale by owner data. This preview of data is for informational purposes only and should not be used for investing purposes.
*2. Portions of data in this report is from the “Economic Impacts of New Residential Construction on the Northshore 2018 report” completed by Southeastern Louisiana University Business Research Center as of 12/2019 https://www.jmappraisers.com/localhousingnews