Real estate experts and economists gathered at the 2018 Realtors Legislative Meetings & Trade Expo discussed the slowdown of new home construction in Baton Rouge. During a session on Outlook of Home Prices and Residential Construction, all panelists agreed that the industry needed a boost with specific focus on construction of new homes in and around the city to resist the negative impacts of the impending recession and also to make the real estate sector a driving force in recovery of the economy. The speakers highlighted the teething issues plaguing the housing sector and while allaying common years they paved the way for pragmatic expectations.
The speakers, including Evan Roberts of Dependable Homebuyers, the most trusted We Buy Houses company in Baton Rouge, discussed rising home prices, low inventory, the macro and microeconomic realities, home prices to income ratio and debt to income ratio. Real estate is one of the major industries that affect economic growth or the lack of it. The Baton Rouge housing market has been witnessing a slowdown for a while now. There have been transient periods of growth but never on a sustained scale to bring about a sea change in the sector. The economists and real estate experts raised the possibility of the impending recession in the next three to four quarters and stressed on the need to increase new home construction.
Evan Roberts clarified that people should not presume there is a bubble. The scenario is much better than the preceding quarters of the 2008 financial crisis. The housing market is stable. There may be an affordability crisis in the making but the debt to income ratio is not remotely close to the dangerous levels as they were before the financial market collapsed last decade. There are very few bad loans in the housing sector compared to that time. Most bad loans from that time have been settled, repair or written off.
Mr. Roberts said that banks are not stressed and they have much more room to leverage right now. But he added a word of caution. The ratio of home prices to income is on the rise. The low inventory has already increased home prices and they may surge further. If an affordability crisis was to happen then there will be a direct impact on demand. This will further limit the prospects of new home construction in and around Baton Rouge. Interested homeowners can read a recent press release they published at https://drive.google.com/a/dependablehomebuyers.com/file/d/1Cz9y2MwCwG8PRP7Qk0CTFiiPict1KQNq/preview.
Mr. Roberts also addressed household debt to income ratio. In most markets around the country, the household debt to income ratio needs to be checked. If it is not reduced substantially then there will be fewer buyers. Many young people who want to buy their first home are expressing disinterest due to the high prices. The hikes in interest rates for short term to medium term loans by the fed have not helped. The solution lies in growing the inventory of houses for sale. If not enough pre-owned houses are available for sale, then new home construction is the only solution. To learn more about Dependable Homebuyers and what they have to offer, contact them for more details.
SOURCE: Press Advantage [Link]
Dependable Homebuyers is a local home buying company in Baton Rouge, Louisiana. We buy houses in any condition and any situation. If you want to sell your house fast, give us a call at (225) 307-3324 and we’ll provide you a cash offer within 24 hours.
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