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Baton Rouge Real Estate Market 2019 Statistics
If you are looking at buying a house in Baton Rouge, LA as a potential investment opportunity, you must read till the end. Home prices in the Baton Rouge real estate market are expected to rise by 0.8% by the end of 2019. If you talk about Louisiana, most people think first of New Orleans. They may get points for the Mardi Gras parade, but cultural attractions like that aren’t a reason to move somewhere. Yet the fact that a city is considered hot with tourists may make it unsuitable for real estate investors. Let’s take a look at the often overlooked Baton Rouge area instead.
Baton Rouge is home to over two hundred thousand people. However, the Baton Rouge housing market is much larger than this. The city and suburbs together contain over eight hundred thousand people. This makes the Baton Rough real estate market the second largest in the state of Louisiana, second only to New Orleans. Let us now discuss the latest Baton Rouge housing market trends and forecasts for 2019 & 2020 and find out why you should invest in this hot market.
Baton Rouge Real Estate Market Forecasts 2019 & 2020
The median home value in Baton Rouge is $166,200 on Zillow.com. Baton Rouge home values have gone up 2.5% over the past year and Zillow’s Baton Rough real estate market prediction is that the prices will rise by 0.8% within the next year. The median list price per square foot in Baton Rouge is $132, which is higher than the Baton Rouge Metro average of $128. The median price of homes currently listed in Baton Rouge is $230,000. The median rent price in Baton Rouge is $1,250, which is lower than the Baton Rouge Metro median of $1,300.
According to LittleBigHomes.com, the Baton Rouge real estate market forecast for the 12 months ending with the 3rd Quarter of 2019 is positive. Their accuracy of the Baton Rouge real estate market trend prediction is 79%. Accordingly, they estimate that the probability for rising home prices in Baton Rouge is 79% during this period. If this Housing Market Forecast is correct, home prices will be higher in the 3rd Quarter of 2019 than they were in the 3rd Quarter of 2018.
Baton Rouge Housing Market Forecast 2019 – 2021
The Baton Rouge housing market forecast for the 3 years ending with the 3rd Quarter of 2021 is also positive. The accuracy of the Baton Rouge housing market trend prediction is 77%. Accordingly, LittleBigHomes.com estimates that the probability for rising home prices in Baton Rouge is 77% during this period. If this Housing Market Forecast is correct, home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the Baton Rouge Real Estate Market Forecast.
Baton Rouge Real Estate Market Trends
Baton Rouge real estate market trends show a 1% week-over-week rise in average listing price and a 8% rise in median rent per month. Trulia has 1,815 resale and new homes for sale in Baton Rouge, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.
Data by Redfin.com shows that the Baton Rouge housing market is somewhat competitive. Homes in Baton Rouge receive 1 offers on average and sell in around 66 days. The average sale price of a home in Baton Rouge was $200K last month, up 8.1% since last year. The average sale price per square foot in Baton Rouge is $115, up 8.5% since last year. Homes typically receive 1 offer. Homes in the Baton Rouge housing market sell for about 3% below list price and go pending in around 66 days. Hot Homes in Baton Rouge can sell for around list price and go pending in around 22 days.
Baton Rouge Housing Market Statistics
- Average Listing Price: $281,646 (On Trulia)
- Median Rent Per Month: $1,400
- Median Household Income: $43,935
- Home Owners: 61%
- Single Residents: 39%
- Median Age: 34
- College Educated: 35%
- Transportation: 97% people commute by car
There are 2,348 homes for sale in Baton Rouge, ranging from $2.5K to $4.5M on Realtor.com. 118 of which were newly listed within the last week. Additionally, there are 654 Baton Rouge rental properties up to $4,500 per month. The median list price of homes in Baton Rouge, LA was $199,000 in February 2019, trending up 4.8% year-over-year. The median listing price per square foot was $116.
Baton Rouge Single Family And Multi-Family Homes
Following the housing market decline in 2007, single family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate. Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units
As per the data from the real estate company called Neigborhoodscout.com, the median house price in Baton Rouge is $168,559, which indicates that home prices in Baton Rouge are near the national average for all cities and towns. Single family detached homes are the single most common housing type in Baton Rouge, accounting for 57.55% of the city’s housing units.
Other types of housing that are prevalent in Baton Rouge include large apartment complexes or high rise apartments ( 29.20%), duplexes, homes converted to apartments or other small apartment buildings ( 9.36%), and a few row houses and other attached homes ( 2.75%).
The most prevalent building size and type in Baton Rouge are three and four bedroom dwellings, chiefly found in single-family detached homes. The city has a mixture of owners and renters, with 47.25% owning and 52.75% renting. Currently, there are 1,971 single family homes for sale in Baton Rouge, LA on Zillow. These include upcoming potential listings such as properties which are in the stage of Pre-Foreclosure. Additionally, there are 398 single family homes for rent in Baton Rouge, LA.
Baton Rouge, LA Foreclosures And Bank Owned Homes
The percent of delinquent mortgages in Baton Rouge is 2.3%, which is higher than the national value of 1.1%, according to Zillow. There are currently 334 properties in Baton Rouge, LA that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 468.
- Foreclosures in Baton Rouge= 334 (RealtyTrac)
- Homes for Sale in Baton Rouge = 468
- Recently Sold = 108
- Median List Price = $190,000 (0% ⇑ vs Feb 2018)
In March 2019, the number of properties that received a foreclosure filing in Baton Rouge, LA was 229% higher than the previous month and 267% higher than the same time last year. Home sales for February 2019 were up 0% compared with the previous month, and down 100% compared with a year ago. The median sales price of a non-distressed home in Baton Rouge, LA was $0. The median sales price of a foreclosure home in Baton Rouge, LA was $0, or 0% higher than non-distressed home sales.
Baton Rouge Home Prices And Real Estate Appreciation
The cumulative real estate appreciation rate over the ten years has been 15.79%, which ranks in the top 50% nationwide. This equates to an annual average Baton Rouge house appreciation rate of 1.48%.
Over the last year, Baton Rouge real estate appreciation rates have trailed the rest of the nation. In the last twelve months, Baton Rouge’s real estate appreciation rate has been 2.92%, which is lower than appreciation rates in most communities in America. In the latest quarter, the real estate appreciation rates in Baton Rouge were at 0.17%, which equates to an annual appreciation rate of 0.67%.
Notably, Baton Rouge’s real estate appreciation rate in the latest quarter is one of the lowest in the country. The above statistics on real estate appreciation in Baton Rouge were taken from NeighborhoodScout.com. You can visit their page for more information. Relative to Louisiana, our data show that Baton Rouge’s latest annual appreciation rate is higher than 60% of the other cities and towns in Louisiana.
10 Best Neighborhoods In Pensacola For Real Estate Investment
There are 211 schools in Baton Rouge, LA. There are 68 elementary schools, 40 middle schools, 28 high schools and 75 private & charter schools. There are 52 neighborhoods in Baton Rouge. Some of the best neighborhoods in Baton Rouge, Louisiana are Jones Creek, South Campus and South Burbank.
Kleinpeter has a median listing price of $449.5K, making it the most expensive neighborhood. North Baton Rouge is the most affordable neighborhood in Baton Rouge, with a median listing price of $49.9K. Here are the 10 best neighborhoods in Baton Rouge to invest in real estate because they have the highest real estate appreciation rates (List by Neigborhoodscout.com).
- Plank Rd / Blount Rd
- W Lake Shore Dr / W Lakeshore Dr
- Highland Rd / Terrace Ave
- Government St / S Acadian Trwy
- Thomas H Delpit Dr / E Buchanan St
- Choctaw Dr / Scenic Hwy
- River Rd S / W Garfield St
- Goodwood
- City Center
- Terrace Ave / S 15th St
Should You Invest in Baton Rouge Rental Properties?
Investing in real estate is touted as a great way to become wealthy. Is Baton Rouge rental property good for investment? Planning to invest in the Baton Rouge real estate market? Many real estate investors have asked themselves if buying a property in Baton Rouge is good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.
We have already discussed the Baton Rouge housing market 2019 forecast for answers on why to put resources into this sizzling market. The home prices in the Baton Rouge housing market will be on an upswing all through 2019. The Baton Rouge home prices are expected to rise by 0.8% in 2020. Here are the top 10 reasons to invest in the Baton Rouge real estate in 2019.
1. Its Affordability
The median home price was just under $170,000 in 2016. In 2019, home prices had appreciated to a modest $180,000 a year, well below the median home price of $230,000. The price per unit in multifamily housing hovered around $100,000 apiece. This helps explain why the cost of living in Baton Rouge is 10 percent below the national average.
The average rental rate on Baton Rouge rental properties is more than $800, but that rental rate includes one and two bedroom apartments. You’ll be able to rent out single family Baton Rouge rental properties for more than a thousand dollars a month. This gives the Baton Rouge housing market a better than average ROI.
2. The Strong Local Economy
The unemployment rate in Baton Rouge hovers around four percent. This is half to one full percentage point below the state average. This explains why Baton Rouge was hit a number of lists for best places for young adults and top cities for starting a business. This attracts people to Baton Rouge to work, and it keeps graduating students in the area. The Baton Rouge housing market is bolstered by the large petrochemical industry, the port and the local medical district.
The Baton Rouge housing market certainly benefits from the tenth largest refinery in the world paying skilled technicians and engineers more than $100,000 a year. This creates a disproportionately demand for luxury homes in the Baton Rouge real estate market given its demographics. Yet the luxury Baton Rouge housing market is still cheaper than what you’d find in “hotter” cities.
3. The Growing Tourism Market
Baton Rouge now hosts several million visitors a year. About forty percent of these visitors are from Louisiana, while the rest come from across the country. A fair number are making a day trip and coming to Baton Rouge to see classic French quarters and enjoy the riverfront for a fraction of the cost of what it would be in New Orleans.
And none of this takes into account the predictable short term rental opportunities such as renting out a house to those coming to watch newly minted LSU graduates walk across the stage. A few are even profiting from Baton Rouge rentals by renting them out on game night at LSU.
4. The Oil and Gas Industry
We’ve touched on how the oil and gas industry literally fuels the strong Baton Rouge job market. However, demand for Baton Rouge rental properties is even more affected by the heavy turnover in the oil and gas industry. Baton Rouge like Houston doesn’t just have people working in the oil refineries.
It is also a hub for people coming to work offshore. Rigs may move to sit off the coast of Texas, or they may shut down for hurricane season. This means many who choose to come here to work in the refineries will rent instead of buy property in the Baton Rouge real estate market.
5. The Student Market
Baton Rouge is the capital of the state. This means there aren’t just stable government jobs but several universities in the area. Louisiana State University has a campus here. That campus has around 30,000 students. Franciscan Missionaries of Our Lady University is a small Catholic college in Baton Rouge.
Southeastern Louisiana University is located about 45 miles from downtown Baton Rouge. This creates demand for Baton Rouge rental properties in the suburbs close to the school.
6. The Demographic Momentum
There are two factors that contribute to the long-term growth of a real estate market. One is people moving into an area (or out). The other is demographic momentum. When you have a low birth rate and high death rate, the housing market will inevitably decline due to lack of demand.
Baton Rouge, on the other hand, has a young and growing population. The average resident is 31, while the average Louisiana resident is 36. Nor is the city building housing inventory fast enough to meet demand.
7. The Low Taxes
One of the best reasons to invest in the Baton Rouge real estate market is the low tax burden. The top income tax rate for individuals is 6 percent. The state and local tax bill is roughly fortieth out of the fifty states, while the sales and local tax burden as a percentage of income is fifth lowest in the country.
Those researching Baton Rouge rental properties will care more about property taxes than income and sales taxes. Know that the median property tax bill is 0.2% of the property’s assessed value. The highest property tax rate in the state is less than 1%. The national average is around 1.2%.
8. The Landlord Friendly Environment
The potential ROI of Baton Rouge rental properties is only hypothetical if your tenants aren’t paying the rent. That’s why the fact that the Baton Rouge real estate market is landlord friendly makes it a better choice than many alternatives. There are security deposit requirements, but you don’t have to pay interest on them.
There are limits on late fees, but there is no state level law saying you must have a grace period for late payments. If a tenant is on a month to month lease, they can be evicted for any reason as long as given ten days’ notice. Break the terms of the lease, and you can be evicted with five days’ notice.
All of this explains why the Baton Rouge real estate market is an excellent opportunity for investors, especially if you want to rent to the lower end of the market where the risk of non-payment is higher. Conversely, if landlords don’t make necessary repairs like fixing structural damage or the plumbing, and the tenant may be able to cancel the lease.
And know that the Baton Rouge housing market is governed by Louisiana’s unusual laws, so always work with a local legal professional to draft a valid lease. What works in another state probably work if there are legal issues with Baton Rouge rental properties.
9. The Impact of the River
Property by the water is always going to come at a premium. However, this can bring the risk of flooding. Seasonal flooding of the Mississippi River varies in severity, but it is far more predictable than a hurricane like the one that destroyed much of New Orleans.
This means that property buyers can look for flooded properties in the late spring or summer with distressed sellers, buy them at a discount, rehab and then sell at a profit, ideally after implementing flood controls. It also creates steady demand for trailer homers from displaced people while creating areas where only trailer homes can be found.
10. The Fix and Flip Opportunity
The Baton Rouge real estate market is notable for how well it ranks on lists of cities with the highest rate and profitability for house flippers. Over 3 percent of all home sales in the Baton Rouge housing market were because of house flippers. Their average profits in 2018 were around $70,000 per house.
This gave the Baton Rouge real estate market the second highest return on the investment for house flippers in the country. If you can turn a single family home into affordable apartments, you’ll be able to earn significant returns in a market desperate for affordable housing.
Baton Rouge Real Estate Investment
Maybe you have done a bit of real estate investing in Baton Rouge, LA but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. If you are a home buyer or real estate investor, Baton Rouge real estate investment definitely has a track record of generating one of the best long term returns in the U.S. through the last ten years. If you invest wisely in Baton Rouge real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate.
Most investors naturally gravitate to residential property investment. When looking for the best real estate investments, you should focus on markets with relatively high population and employment growth. Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.
You must also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Baton Rouge, LA. Forget New Orleans and the hope of profiting off its steady stream of tourists. The Baton Rouge real estate market isn’t as glamorous, but it offers more affordable properties, a steady rental market, and higher return on the investment.
Buying an investment property is different from buying an owner-occupied home. Investment properties are designed to make money as rentals, which means you must look at it solely as an income producing entity just like any other business.
Whether you are a beginner or a seasoned pro you probably realize the most important factor that will determine your success as a Real Estate Investor is your ability to find great real estate investments.
According to real estate experts, buying in a market with increasing prices, low interest, and low availability requires a different approach than buying in a cooler market.
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Other Best Places To Invest In Real Estate
Another market that we suggest is the housing market in Pensacola, Florida. The Pensacola real estate investment can be as warm as the water along its beautiful beaches. The Pensacola real estate market is inviting to locals and tourists alike, generating a steady stream of revenue. Investors are making a mistake if they pass over this market in favor of overheated markets like Miami or Orlando.
The Pensacola real estate market is affordable to locals, tourists and investors alike because it isn’t being bid up as if it were the next Silicon Valley or the Orlando neighborhoods near Disneyworld. Ironically, the relatively lukewarm tourist market means you aren’t competing against city blocks lined with luxury hotels or all-inclusive resorts, either.
This gives the average real estate investor a decent chance at earning good money in the Pensacola real estate market. And Pensacola tourism is seeing steady growth, so you’ll be able to increase the rental rates charged to tourists over time. They’ll consider it a deal, since the city offers equally warm sandy beaches and decent tourist attractions without the crowds of “hotter” tourist destinations.
Another best place to invest in real estate is Mobile, Alabama. The Mobile AL real estate market combines low property taxes and ongoing carrying costs, good long-term fundamentals, and a favorable market for real estate owners. And this is why you should consider investing in the Mobile, Alabama real estate market.
The return on investment in the Mobile housing market is better than the state average. The median Alabama rent is less than $800, while the median rent in the city of Mobile is around $900. Note that you’d receive more for a single family detached home than a one or two bedroom apartment.
Yet the median home price in the Mobile AL real estate market is 7% less than the state average. This means you’ll see higher ROI from Mobile AL rental properties than rentals elsewhere in the state.
Let us know which real estate markets you consider best for real estate investing! If you need an expert investment advise, you may fill up the form given here.
One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.
*Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References:
Introduction
https://en.wikipedia.org/wiki/Baton_Rouge,_Louisiana
Affordability
https://realestate.usnews.com/places/louisiana/baton-rouge
Demographic momentum
http://www.city-data.com/city/Baton-Rouge-Louisiana.html
Student market
https://en.wikipedia.org/wiki/Louisiana_State_University
https://en.wikipedia.org/wiki/Franciscan_Missionaries_of_Our_Lady_University
https://en.wikipedia.org/wiki/Southeastern_Louisiana_University
Economy
https://realestate.usnews.com/places/louisiana/baton-rouge
https://www.deptofnumbers.com/unemployment/louisiana/
https://en.wikipedia.org/wiki/Baton_Rouge,_Louisiana#Economy
Low taxes
https://taxfoundation.org/state/louisiana/
http://www.tax-rates.org/louisiana/property-tax
https://smartasset.com/taxes/property-taxes
Landlord friendly https://www.avail.co/education/laws/louisiana-landlord-tenant-law
https://nola.curbed.com/2015/6/4/9953148/10-things-you-need-to-know-about-renting-in-new-orleans
Oil and gas
https://www.theadvocate.com/baton_rouge/news/business/article_2dfe4a9a-3f66-11e8-bfd6-331eba6a6c4a.html
https://www.houstonchronicle.com/business/energy/article/Offshore-rigs-getting-ready-for-hurricane-13128180.php
Tourism
https://www.visitbatonrouge.com/tourism/visitor-profile
http://www.wafb.com/2019/03/14/local-state-leaders-exploring-new-airbnb-regulations
https://www.theadvocate.com/baton_rouge/news/business/article_4a0db704-deb1-11e7-837b-b3f52839c9f9.html https://www.businessreport.com/article/louisiana-sets-new-tourism-record-sixth-straight-year
Fix and flip
https://www.realtor.com/news/trends/top-markets-for-home-flippers https://bizmagsb.com/2019/03/28/new-study-shows-significant-affordable-housing-gap-throughout-louisiana
The river
https://www.theadvocate.com/louisiana_flood_2016/article_6653239a-dce1-11e6-ad4a-63b860ee4b50.html
Market Data, Trends and Statistics
https://www.zillow.com/batonrouge-la/home-values
https://www.trulia.com/real_estate/Baton_Rouge-Louisiana
https://www.littlebighomes.com/real-estate-baton-rouge.html
https://www.neighborhoodscout.com/la/baton-rouge/real-estate
https://www.redfin.com/city/1336/LA/Baton-Rouge/housing-market
https://www.realtor.com/realestateandhomes-search/Baton-Rouge_LA/overview
https://www.realtytrac.com/statsandtrends/la/east-baton-rouge-county/baton-rouge
