A limited supply of homes has hampered real estate activity in fast-growing Ascension Parish for the past year and a half.
Despite a flurry of subdivision permits being issued to developers trying to get ahead of new traffic impact fees effective in April, the inventory of houses for sale in the parish is nearly one-third what real estate experts consider to be a healthy level.
“The consumers are pretty much taking the available lots as soon as we are bringing them to sale,” said Roy Domangue, owner of Wooden Creations, a Gonzales custom builder. “There’s a lot of inventory, but the demand for it is right there.”
Ascension Parish’s population grew by more than 11 percent from April 2010 to July 2015, according to U.S. census estimates. The parish added more than 2,400 people from 2014 to 2015, reaching nearly 119,500 residents.
Growth in Ascension has been fueled by petrochemical plant expansions, the parish’s proximity to Baton Rouge and New Orleans, and a public school system that is ranked as one of the top five in the state.
But beginning in 2015, home sales in the parish started to taper off. According to the Greater Baton Rouge Association of Realtors’ Multiple Listing Service, there were 1,758 homes sold in Ascension during 2015, a 1.6 percent gain over 2014. In contrast, home sales in East Baton Rouge Parish were up by 10.9 percent for 2015; Livingston Parish had a 12.1 percent gain in Multiple Listing Service sales for the year. Realtors blamed the lack of sales to a limited inventory of houses for buyers to choose from. While a balanced market generally has a six-month supply of homes available for sale, since June 2013, the Ascension market has had a supply of four months or less.
Cheryl Leatherwood, the president of the Ascension Council of Realtors, said the limited supply has kept some people from moving. “I have people who are ready to move, who sell their homes and they can’t find where they want to go,” she said. “So they end up renting something until it becomes available.”
Leatherwood, an associate with Re/Max First, said the demand for housing is greater in Ascension than in East Baton Rouge or Livingston because of all the business and industry activity in the parish.
“Right now, there’s a problem with more demand than supply,” she said. “I think things will get better once the new housing comes online, but there’s still that deficit.”
Home sales have picked up in Ascension during the first four months of 2016.
According to the Realtors association, closed sales were up 5.8 percent through the end of April when compared with the year before, which is just below the 6.8 percent increase that has been reported in the nine-parish metro Baton Rouge area. During April, the supply of houses in the parish was 2.3 months, down nearly a third from the 31/2 -month supply in April 2015.
Bart Waguespack, of Waguespack Homes in Gonzales, said a hangover from the Great Recession has kept the supply of homes from meeting up with the demand in Ascension.
“Just before the economy crashed, there were a lot of subdivisions out there and a lot of inventory,” he said. “When developers got in a bind, builders just wanted to buy one lot at a time. When things started to get better, you still had so much inventory out there.”
Domangue said another effect of the recession was tighter standards from lenders. To get a loan, banks started wanting developers to put down half the cost of a new subdivision in cash. That curbed activity except for the largest builders with deep pockets.
“Today, the standards have loosened, and you have to come up with more in line of 20 or 30 percent down to get a loan,” he said.
“The banks are taking a little more risk.”
Between January 2014 and late March of this year, data shows that nearly 5,100 subdivision lots received at least key early approval in Ascension. This includes large-scale developments such as Conway, a 344-acre mixed-use community on La. 44 near Interstate 10 in Gonzales. Conway, which is being developed by Lafayette-based Southern Lifestyle Development, will have 950 single-family homes built over the next decade. Home prices will range from the low $200,000s up to the $400,000s.
Riverton is a 260-acre neighborhood planned by Sorrento businessman Grady Melancon just west of heavily traveled La. 44 in Burnside that eventually will include 780 homes. Edenborne is a 340-acre traditional neighborhood development fronting I-10 at La. 44 being developed by Tommy Spinosa.
Cobin Ladner is developing Stoney Point Estates, a 188-lot gated community off of La. 73 in Dutchtown. Ladner said 80 percent of the 68 lots in the first filing are under contract after being on sale for three months, even though they’re priced at just under $130,000. Stoney Point is one of six developments Ladner is working on.
“The phones could not be busier right now,” he said. “There’s a demand for custom houses out here.”
Ryan Engquist, a partner with Baton Rouge-based Level Homes and the company’s Louisiana division president, said after closing on 65 homes in Ascension last year, the company expects to sell 105 this year. Last year, the average closing price for a Level Home was about $300,000 and prices are holding steady.
“We’ve got several projects with another 800 lots,” he said. “We predict we’ll just buy land and remain in Ascension.”
Richard Haase, president of Latter & Blum, the parent company of C.J. Brown Realtors, which is marketing Conway, said while it took developers some time to get back into Ascension, these large-scale projects show the strength of the market.
“Jobs are strong in Baton Rouge, and Ascension is a really underserved market,” he said. “It’s pretty exciting what’s going on in Ascension; it just took a while.”
With all of the homes slated to be built, Domangue said he’s getting concerned about overbuilding in the parish. “I think we have to be mindful where our economy is, nationwide as well as globally,” he said. “We don’t want to have another situation where there’s too much inventory on the ground and we can’t sell it. You have to be careful.”
Follow Timothy Boone on Twitter, @TCB_TheAdvocate.