The record appreciation homeowners have enjoyed in Bossier City during the last few years is starting to cool. If you bought a $200,000 house in Bossier City just last year, it’s likely worth $187,400 right now as home values have fallen 6.3% since then, according to Redfin. This is due to the spike in current mortgage rates, building costs, and the reduction of inventory—factors that are all pricing many out of the market. According to NAHB chief economist Robert Dietz, “the homeownership rate will decline in the quarters ahead as higher interest rates and ongoing elevated construction costs continue to price out a large number of prospective buyers.”
Nationwide, new home sales fell to a six-year low this summer, and plummeting numbers in new mortgage applications indicate increased declines in the near future. Throughout the summer, Fed Chair Jerome Powell has repeatedly spoken of the housing market’s “complicated situation.” And Forbes suggests his comments indicate prices will continue to cool as mortgage rates normalize at higher levels after remaining historically low during the pandemic.
What does the current situation mean for homeowners?
If you’re planning to stay in your home long-term, these temporary dips and downtrends shouldn’t be of much concern to you. Historically, the Shreveport-Bossier City area has enjoyed a very stable housing market, even during times of economic uncertainty. Take a look at this chart from the St. Louis Fed:
As you can see, those who have stayed in their homes for the last 30+ years have enjoyed consistent gains over the long term. And for those seeking an affordable place to ride out inflation, Northern Louisiana is the place to be. In fact, Money magazine ranked Bossier City in its top 100 best places to live in the United States—the only city in Louisiana to make the list. Called one of the “fastest-growing urban centers in the state,” Bossier city was praised for its “ongoing infrastructure improvements, a low cost of living and rich local culture.” Additionally, Bossier City ranked 15th among the Top 100 best places to live in terms of affordable housing and rounded out the top half of the rankings in terms of job growth.
But what does the current market mean for those wanting to sell soon?
Despite declining sales, homebuyers are still looking for a place to live in growing urban centers—especially amongst newer or well-refurbished homes in the $200,000 range. Redfin data shows that Bossier City is still Somewhat Competitive, with homes selling in around 23 days. Additionally, so-called “Hot Homes” are selling in around 5 days.
Since Bossier City is now more of a buyer’s market, home sellers will need to make sure their property is competitive by making the necessary upgrades, taking the appraisal process seriously, and working with an experienced real estate agent who can get you top dollar for your home.
What about prospective buyers?
Two factors are making it difficult for buyers right now: historically low inventory and high mortgage rates.
Luckily, inventory is starting to rise slightly. It’s not as much as needed to get back to a typical, pre-pandemic housing market, though. If you take a look at this chart from the St. Louis Fed, you’ll see that active inventory is up to a total of 822 listings in our area as of September 2022—up 785 from the previous year.
That may seem like a substantial increase in inventory, but when you compare it to the pre-pandemic average of 2042 active listings in September from 2016-2019, you’ll see that we are 59.7% lower than where we need to be to signify a return to normal. That low inventory is keeping prices high, and especially when paired with high mortgage rates, it’s making the situation difficult for buyers.
What can buyers do?
My recent blog post offers some financial options for handling high mortgage rates. Some of these options include: contributing more toward that initial down payment, or purchasing discount points. Other strategies might be: looking into a 15-year mortgage to save money over the long term, getting an adjustable rate mortgage, or just paying those high mortgage rates now and then refinancing as soon as the rates drop.
For those worried about low inventory reducing your options, working with a well-networked real estate agent will give you access to listings that haven’t yet hit the market, giving you a leg-up over the competition.
Need more answers?
Buying and selling real estate can be a complicated process. Luckily, the Tammi Montgomery Real Estate Experts know the ropes and will assist you every step of the way. We can help you make the most informed purchase. Once you find a home, we’ll be there to negotiate the best deal for you. And if you’re selling, we can ensure you’ll get top dollar. Wondering how much your home is worth? We can give you that answer, enter your address into our Home Value Evaluation Calculator.
We know buying and selling a home can be stressful, but we're here to help. Schedule a call with us today to find out how we can make your dreams come true.