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Started By
Message
Louisiana Real Estate Prices during oil turndowns--
Posted on 12/9/14 at 8:20 am
Posted on 12/9/14 at 8:20 am
Louisiana $85,000 $74,700 $85,100 $56,100 $52,700 $31,100 $14,700
These are the median values of homes in Louisiana by decade through 2000 according to the Census of Housing. LINK The prices have been adjusted to 2000 dollars.
The three I put in bold are in this order 2000, 1990, 1980. Anyone that lived through knows that by 1990 the prices had actually recovered a little from where they were in 1987 or 88. You can see the impact of inflation in the seventies. It was high times in the oil field similar to what we have had the last few years.
While the rest of the country was booming we were getting hammered in the eighties. For example the median value of homes in Georgia during the eighties increased about 25%. The median value here decreased 12% which is actually huge.
The impact was median home values did not return to 1980 levels until 2000. It was twenty years of tough times for homeowners. No way you could pay your mortgage and recover the interest cost of owning the home.
As commodity prices plunge once again will the same thing happen??
I don't think we will collapse like we did in the eighties but one should expect an end to value increases. Our market has been very hot for the last three years. It can't be sustained if unemployment increases as it appears it will.
These are the median values of homes in Louisiana by decade through 2000 according to the Census of Housing. LINK The prices have been adjusted to 2000 dollars.
The three I put in bold are in this order 2000, 1990, 1980. Anyone that lived through knows that by 1990 the prices had actually recovered a little from where they were in 1987 or 88. You can see the impact of inflation in the seventies. It was high times in the oil field similar to what we have had the last few years.
While the rest of the country was booming we were getting hammered in the eighties. For example the median value of homes in Georgia during the eighties increased about 25%. The median value here decreased 12% which is actually huge.
The impact was median home values did not return to 1980 levels until 2000. It was twenty years of tough times for homeowners. No way you could pay your mortgage and recover the interest cost of owning the home.
As commodity prices plunge once again will the same thing happen??
I don't think we will collapse like we did in the eighties but one should expect an end to value increases. Our market has been very hot for the last three years. It can't be sustained if unemployment increases as it appears it will.
This post was edited on 12/9/14 at 8:22 am
3
Posted on 12/9/14 at 8:39 am to I B Freeman
oil prices are down, which will hurt offshore drilling, but the low gas prices are fueling a huge construction boom in the petrochemicals and refining industry as well as with gas to liquids plants for export. Unlike the mid 80s, when our economy cratered with the reduced price of gas, we will take a hit, for sure (mostly in the state budget), but the state has enough of a massive boom in petrochemicals and refining to stay strong despite the drop in oil prices.
Posted on 12/9/14 at 8:43 am to I B Freeman
You were talking about the BR market in the other thread. BR isn't Laffy or Houma.
Much more Chem production here.
Much more Chem production here.
Posted on 12/9/14 at 8:56 am to Golfer
IMHO one would be very naive to assume Baton Rouge real estate will continue on the pace it has the last few years.
No need to get emotional about an investment. The facts are just too obvious. The state's budget is not going to grow and BR is a big government town. Exxon has said they are cutting capital spending. BR is a big Exxon town. On and on.
A house one lives in is an expense and should be look at as an expense and not an investment. Real estate investments--ie income producing properties--are just not bargains in Baton Rouge IMHO given the negatives that are developing in the state's economy.
We may not back up in overall state GDP (I don't see how we won't) as you guys are suggesting but we aren't going to grow at the pace we have been growing. Gosh the fuel of the cash that been used to finance the growth is off 40%.
No need to get emotional about an investment. The facts are just too obvious. The state's budget is not going to grow and BR is a big government town. Exxon has said they are cutting capital spending. BR is a big Exxon town. On and on.
A house one lives in is an expense and should be look at as an expense and not an investment. Real estate investments--ie income producing properties--are just not bargains in Baton Rouge IMHO given the negatives that are developing in the state's economy.
We may not back up in overall state GDP (I don't see how we won't) as you guys are suggesting but we aren't going to grow at the pace we have been growing. Gosh the fuel of the cash that been used to finance the growth is off 40%.
This post was edited on 12/9/14 at 8:59 am
Posted on 12/9/14 at 9:15 am to Golfer
I'm in Houma and just started house hunting. I was wondering if this would come into play.
Posted on 12/9/14 at 9:31 am to I B Freeman
quote:
A house one lives in is an expense and should be look at as an expense and not an investment. Real estate investments--ie income producing properties--are just not bargains in Baton Rouge IMHO given the negatives that are developing in the state's economy.
Well yes.
State economy is fine...it's much more diversified than the 80's.
Posted on 12/9/14 at 2:07 pm to I B Freeman
I don't predict a collapse per se - mainly cause as others have stated, our economy has diversified since the 80s, and lower fuel prices will actually help some sectors of the economy while others are hurt.
The fact that our state budget is so predicated on severance taxes is probably going to be the biggest, issue, which will lead to further layoffs and erosion of government services.
As far as real estate, I think we are nearing a top of a bubble. I don't think it will burst, but I don't see prices going much higher. For a while, I've wondered how prices in certain areas were going as high as they were.
The fact that our state budget is so predicated on severance taxes is probably going to be the biggest, issue, which will lead to further layoffs and erosion of government services.
As far as real estate, I think we are nearing a top of a bubble. I don't think it will burst, but I don't see prices going much higher. For a while, I've wondered how prices in certain areas were going as high as they were.
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