The Shreveport real estate market in Louisiana continues to show signs of growth, in spite of weak unemployment. Improved buyer demand pushed pending home sales last quarter to their highest level in more than two years. This number has been trending upwards, and can be viewed as a positive sign of things to come. Whether this growth is sustainable or not will largely be decided by how quickly the local economy turns around. If the economy can gain a foothold, there are pieces in place that can return the Shreveport real estate market back to pre-collapse numbers.
The current median home price for the Shreveport real estate market is $151,600; which sits well below the national average of $203,867. Over the last twelve months, the average price of Shreveport real estate is up 1 percent, which is well below the national average of 6.7 percent. One of the reasons for this is the fact that median home prices did not reach national levels at the height of the market. The bottom was not nearly as steep either. The small gains piggyback the growth of the market over the last three years. In that time Shreveport real estate has seen an average home price increase of 0.3 percent. While the local numbers are below national figures, they are moving in the right direction.
With increased home prices comes an increase in appreciation. Since the market collapse, they have seen a slow recovery in home values and equity. The following highlights how much equity has been gained relative to the year purchased for the past nine years:
- Homes purchased in the Shreveport housing market one year ago have appreciated by an average of $3,769, whereas the national average was $15,753 over the same period.
- Homes purchased in the Shreveport housing market three years ago have appreciated by an average of $8,165, whereas the national average was $53,565 over the same period.
- Homes purchased in the Shreveport housing market five years ago have appreciated by an average of $16,164, whereas the national average was $47,444 over the same period.
- Homes purchased in the Shreveport housing market seven years ago have appreciated by an average of $32,880, whereas the national average was $17,200 over the same period.
- Homes purchased in the Shreveport housing market nine years ago have appreciated by an average of $38,762, whereas the national average was a reduction in appreciation by $100over the same period.
Positive gains have been made every year, but not nearly at the pace of the rest of the country. If slow growth is the key to any sustainable market recovery, Shreveport appears to have hit the bottom and is ready to take off. That goes double for Shreveport real estate investing.
Gains in the Shreveport real estate market are only sustainable if the economy grows with it. While Shreveport has taken strides to right the ship after the collapse, there are some causes for concern. The twelve month job change numbers for last quarter are up slightly from the previous quarter. While this is a positive, local unemployment numbers are a concern. The current unemployment rate sits at 7 percent, which is higher than the national average of 5.5 percent. This represents a steep increase from 6.2 percent the same time last year. With unemployment worse than last year, buyer confidence has shaken. If there are concerns regarding employment, prospective buyers may stay renting until their employment situation turns. In addition to locally weak unemployment numbers, job growth currently sits at a negative clip (-0.5), compared to a national average of 2.1 percent. These employment numbers must be strengthened before the Shreveport real estate market will fully take off.
One of the advantages of living in a market with a reduced median home price is the level of affordability. For most buyers, affordability is one of the most important sets of criteria they have when considering which area to purchase in. The Shreveport real estate market is one of the most affordable areas in the country. The monthly mortgage payment to income ratio for the Shreveport market current sits at 7.5 percent. This is well below the national average of 14.3 percent. While home values are relatively low in the Shreveport real estate market, most homeowners are comfortable with their mortgage payments. This bodes well for prospective buyers looking to enter the market. It is also a huge plus for the entire
According to RealtyTrac, there are currently 155 properties in the Shreveport real estate market that are in some stage of foreclosure. For a town with a population just over 200,000; this represents a relatively small number. Historically, Shreveport has had a reduced number of foreclosures in relation to the national average. Every quarter since 2007 ,Shreveport has been below national rates and that trend appears to be continuing. Foreclosures are down locally 35 percent from the previous month and up 6 percent from the same time last year.
The Shreveport real estate investing community will appreciate the discount these properties offer. The median sales price of a non-distressed home was $103,000. The median sales price of a foreclosure home was $60,000, or 42 percent lower than non-distressed home sales. That is a savings of $43,000 per home.
There are many bright spots for the Shreveport real estate market. Higher home prices, increased equity, high affordability and reduced foreclosures all make the market very attractive. But like many other areas of the country, unemployment and job growth are still dragging the market down. When the local job market begins to climb you can expect the real estate market to climb along with it.
Shreveport Real Estate Market Summary:
- Current Median Home Price: $151,600
- 1-Year Appreciation Rate: 1%
- Unemployment Rate: 7%
- 1-Year Job Growth Rate: -0.5%
- Population: 200,327
- Median Household Income: $41,583