Northshore Newsletter - Murphy Appraisal Services

Northshore and Surrounding Areas
Welcome to the first electronic edition of the Murphy Appraisal Newsletter, Northshore
Edition. This newsletter contains select items of interest to keep our clients, contacts
and friends abreast in the real estate marketplace. We hope you find it informative and
useful. Please continue to keep us in mind for your appraisal and consultation
needs. We hope you have a safe and Happy New Year!
-Rick Murphy
Northshore Real Estate
January 2013
Volume 1, Issue 1
State Estimates Isaac Damaged
13,000 Louisiana Homes
At least 13,000 homes in Louisiana were damaged by
Hurricane Isaac, according to the preliminary figures from the
Governor’s Office of Homeland Security and Emergency
Preparedness. Nearly 95,000 people signed up for individual
aid from FEMA, for grants to help repair homes and property
in the 10 hardest-hit parishes. The tally of damaged homes
could end up being much higher, with not all of those who
applied necessarily eligible for aid. The devastation will be
nowhere near the back-to-back blows of hurricanes Katrina and
Rita, which hammered Louisiana in 2005. Those storms
reportedly damaged more than 200,000 homes across southern
parishes. Source:CityBusiness
http://neworleanscitybusiness.com/blog/2012/09/04/official-isaacdamaged-13000-louisiana-homes/
Average Home Sales Prices Dropped In St. Tammany In November
The average selling price of homes throughout the St. Tammany area dropped in November, according to statistics
released by the Gulf South Real Estate Info Network. In East St. Tammany, the average home price was $131,769, down from
$163,792 average in October and from $174,477 a year ago, a significant decrease. In West St. Tammany, the average home
price was $235,435, down from the $241,705 average a month ago and from $248,882 a year ago. Yet the average selling price
of homes in the Greater New Orleans area in November was up 2.3 percent compared with the same month last year, from
$193,692 to $198,132. More homes were sold this year at 771 compared with 620 in 2011. Source: Christian Moises,
CityBusiness
http://neworleanscitybusiness.com/blog/2012/12/18/home-prices-up-throughout-most-of-new-orleans-area-in-november/
Foreclosures High, But Abate In
St. Tammany
St. Tammany Parish, with 122 filings in November, had
the highest rate in the New Orleans metro area at one in
every 782 housing units receiving a filing, according to
figures recently released by Irvine-Calif.-based
RealtyTrac. That marked a 58.5 percent drop compared
with October of this year and a 50.2 percent decrease
over a year ago. Filings include default notices, auction
sale notices and bank repossessions.
Louisiana’s 1,230 filings in November produced a
foreclosure rate of one in every 1,598 housing units
receiving a notice, a 26.7 percent decrease over the month
and a 22.4 percent drop over the year. That put Louisiana
34 out of 50 states. Source: Christian Moises,
CityBusiness
Bloomberg photo, The Times Picayune
http://neworleanscitybusiness.com/blog/2012/12/13/new-orleans-areaforeclosure-rate-down-in-november/
North Shore Commercial Real
Estate Better, But Not Booming
Home Building Makes Slow, Steady
Climb In St. Tammany
For commercial real estate professionals on the North Shore,
2012 has been better than last year and much better than
2010. Karl Landreneau, director of commercial sales and
leasing with Latter & Blum, says the North Shore market has
remained stable because of a limited supply of space. “For
more than two years running, everything was flat over here,”
said Robert Tufts, CEO of The Latitude Group in Mandeville.
“There was nothing new going on, especially in retail and
office.” But the 2012 numbers have inched upward. “I would
not by any means call it a boom, but certainly things are
looking better,” Tufts said, noting that Class A office space,
when it’s available, goes fast, but Class B and C space is just
as strong.
Housing markets have taken a beating lately despite record-low
interest rates and a housing climate that is otherwise friendly to
prospective buyers. But a gradual increase in new homes sales is
apparent in area communities, including a noticeable bump in
activity in St. Tammany Parish. The number of new housing
permits in St. Tammany Parish peaked at 2,920 in 2004. It
plummeted to near 500 in 2009 but is slowing making a
comeback aided by lower building costs. New home
construction is up about 30 percent from a year ago, he said, but
the number of new permits is so few that it makes the overall
volume insignificant.
That the North Shore remains so popular may have a lot to do
with its overall economic health. According to a St. Tammany
Economic Development Foundation report released in early
October, employment in the parish for the second quarter of
2012 grew 1.4 percent over the same period last year.
Housing has jumped 17 percent, while new businesses have
increased from 666 in the second quarter of 2011 to 678
during the spring of this year. Source: Gary Boulard,
CityBusiness
http://neworleanscitybusiness.com/blog/2012/11/15/things-better-notbooming-for-north-shore-commercial-property/
Building a new home is cheaper than in the past, with lower
costs for materials and labor, but the rejuvenation of the market
has seen a steady increase in the cost of supplies. “There’s been
about a 40 percent increase in the cost of lumber over the past
year,” homebuilder Bobby Hurley says. “The cost of plywood
has risen and painters in the area are even telling me that the
cost of paint has gone up as well.” “This has not been a very
steep recovery,” Hurley said, “but things are getting better. I
would just encourage folks who are interested in buying a new
home to get off the sidelines and take advantage of these interest
rates — they won’t be like this forever.” Source: Mason
Harrison, CityBusiness
http://neworleanscitybusiness.com/blog/2012/10/18/home-building-makes-slow
-steady-climb-in-st-tammany/
North Shore Banks Tweak Offerings With Interest Rates At Record Lows
Interest rates are set to stay at historic lows for the next two years, putting the squeeze on profit margins at banks. But North Shore
lenders are optimistic that local demand for mortgages and accelerated commercial lending will bolster their business. The Federal
Reserve announced in September it would lower near-zero interest rates through mid-2015 amid still-anemic economic growth, a
part of its much-anticipated quantitative easing plan. The plan, known as QE3, is expected to keep mortgage rates down for the
foreseeable future, a good sign for consumers. For local and regional banks, it has created an environment that is pushing them to
add products to gain business.
North Shore bankers expect new homebuyers move to secure on near-zero rates and new housing and commercial construction picks
up in St. Tammany. The average interest rate on a 30-year, fixed-rate mortgage has decreased steadily in the wake of the 2008
financial crisis, hitting 3.47 in September, down from 3.6 percent in August and 4.11 percent a year earlier.
In mortgage lending, a big unknown is how new standards intended to weed out the risky lending practices that led to the 2008
financial crisis will affect customer demand for loans. The Consumer Financial Protection Bureau plans to deliver those standards in
January. Source: Jennifer Larino, CityBusiness
http://neworleanscitybusiness.com/blog/2012/11/01/north-shore-banks-tweak-offerings-with-interest-rates-at-record-lows/
Flood Insurance Premium Rises
Slightly In St. Tammany Parish
The average cost for a National Flood Insurance Program
policy in the New Orleans area was up in every parish except
Orleans when compared with a month earlier, according to
policy statistics recently released. Louisiana had the third most
premiums with policyholders having paid $343.4 million into the
program. The total that would be paid out in a worst-case
scenario would be $111.8 billion. Statewide, there were
483,811 policies at an average of $709.78, up from a $697
average a year earlier.
St. Tammany (unincorporated areas only): had 35,238 policies
at an average of $547.78, up from the $546.59 July average but
down from the $553.09 in 2011. Source: Christian Moises,
CityBusiness
http://neworleanscitybusiness.com/blog/2012/10/05/average-orleans-parishflood-premium-down-for-second-month/
The Multi Family Market At A Glance
According to data recently released from the Greater New Orleans Multi-Family Report, for the period ending in October, St. Tammany
Parish has the newest inventory of garden apartment communities and the highest suburban rents in the area. An average monthly rent
figure (spanning from 1 to 3 bedroom units) was $1,009 per month (rents ranging from $858 to $1,300 per month). Reported occupancy
was 89%, due to recently introduced inventory to the sub-market. They expect occupancy to rise over the next four to six months.
The Brewster Commons Apartments, a 240 unit complex off I-12 in the mixed use River Chase development in Covington, is in a lease
up phase after construction was completed in 2012. It is developed by Favrot & Shane and is being managed by 1st Lake Properties.
St. Tammany Economic Development
Foundation
The St. Tammany Economic Development Foundation (STEDF), a non-profit
corporation and politically unaffiliated, is recognized as the lead economic development
organization for St. Tammany Parish. It as an organization is charged with retaining and
attracting business and employment opportunities. The STEDF releases and publishes a
variety of economic data and demographic data, including Quarterly Reports of
Economic Trends.
For complete information, visit
the STEDF at their website
below.
http://www.stedf.org/
The 2nd Quarter Economic Trends Report noted trends in employment (the parish had a
significant decline in first time unemployment filings), residential and commercial
building permits, and apartment rents (2.3% higher on average than 2nd Q. 2011 rents).
The report can be seen in its entirety by clicking the link below.
http://www.stedf.org/UserFiles/File/2012/2nd%20Qtr%202012%20Print%20Package.pdf
Also, the STEDF has a composite Growth Index Report by quarter (it grew at an annual
rate of 1.9% versus 1.5% for the first quarter). This can be viewed by the link below.
http://www.stedf.org/UserFiles/File/2012/Economic%20Growth%20Index%202nd%20Qtr%202012.pdf
NORTHSHORE NEW HOME CONSTRUCTION
DSLD Homes dominated the Northshore new construction market in 2012. DSLD new home sales totaled 218 in St. Tammany
Parish in 2012. 26 sales were in the Slidell area. A total of 736 permits were issued in the Parish last year and DSLD accounted for
approx. 30% of them. Overall in St Tammany the average living area of a DSLD home was 1,861 SF and the average sales price
was $187,594 or 101.51/SF. 164 of these were listed in the MLS and will be summarized by subdivision in a table that follows.
In addition to DSLD there were a total of 12 sales by various builders in Eagle Landing north of 190 on 1077. Also, 8 sales by
Southern Homes in Del Sol off of Hwy 1085. 6 sales in Coquille S/D and 15 sales by various builders in Autumn Creek. In addition
there were 11 sales in Montgomery Terrace, 7 sales in Normandy Oaks, and 7 sales in Grande Maison. Southern Homes had a total
of 8 sales in the Big Branch/Lacombe area in Autumn Haven Subdivision.
In Tangipahoa Parish, DSLD sold 169 homes last year that were listed in the MLS. Overall in Tangipahoa the average living area
for the homes sold was 1,728 SF and the average sales price was $162,363 or 94.34/SF, with an average of 71 days on the market.
DSLD SALES
Subdivision
# of Sales
Sales Price
Area(SF)
Price/SF
Days on Mkt
Ashton Parc
20
$174,675
1,658
$105.46
43
Tanglewood
6
$218,524
2,103
$104.22
29
Barkley Parc
33
$198,513
1,971
$101.72
35
Lexington Place
28
$167,525
1,597
$105.18
23
Raiford Oaks
9
$228,456
2,090
$110.00
49
Savanahs
14
$161,828
1,565
$103.06
11
Tallow Creek
28
$201,675
2,103
$96.42
14
Villages at Bocage
33
$180,594
1,868
$97.19
48
Totals
171
$186,985
1,853
$101.62
31.60
Arrington Place
6
$139,983
1,516
$92.65
132
Bedico Meadows
37
$142,469
1,530
$93.20
58
Blythewood
24
$173,321
1,895
$92.24
72
Chateau Estates
16
$141,576
1,493
$94.87
83
Cornerstone
5
$148,840
1,552
$96.16
185
Holly Gardens
14
$144,086
1,482
$97.25
119
Madison Trace
5
$124,760
1,297
$96.61
138
The Parc
4
$146,475
1,532
$95.87
48
Villages at Bocage
35
$179,555
1,893
$95.33
35
Woodlake Estates
47
$187,390
2,024
$93.10
58
Totals
193
$132,061
1,409
$94.08
54.30
St Tammany
Tangipahoa
NORTHSHORE LOT SALES AND ABSORPTION
On the Northshore, single-family lot sales have
been at the highest pace since Hurricane Katrina.
Most vacant lots are being purchased by two
homebuilders: DSLD, LLC and DR Horton, Inc.
While DSLD has been in the market for the past
three years, DR Horton made a strong push in
2012 to increase lot inventory.
The lots are being purchased for home prices in
the $150,000 to just over $200,000 home price
range. Almost all bulk lot sales have structured
takedowns between 10-15 lots per sale. Based on
our research, a total of 150-200 lots sold in St.
Tammany Parish this year with 50-75 lots in
Tangipahoa Parish. This is just the lot sales and
does not include pending transactions or home
sales.
Lot prices have remained the highest in Western
St. Tammany Parish with recent bulk sales in
Palm Court, Grand Oaks, and Raiford Oaks south
of I-12 in Madisonville selling from $32,000 per
lot to $40,000 per lot. Subdivisions closer to
Covington include Savannahs Subdivision,
Barkley Parc, Tuscany West, Oak Alley and
several others with sales prices from $30,000 per
lot to $44,000 per lot. The higher end sales are the
most recent showing greater demand.
The custom home market over $250,000 is still
lagging except for the subdivisions located off the
Highway 21 corridor. Lots sales in Terra Bella,
Maison Du Lac, Natchez Trace, and home sales
in Weston Glen have seen greater absorption in
2012 than they did in 2011.
Probably the most telling about the direction of
the market from the homebuilders’ and
developers’ perspective is the number of new
phases recently completed or will soon be
available. This includes Grand Oaks off of
Highway 22 in Madisonville, Savannahs in
Covington, Bedico Creek off of Highway 1085 in
Madisonville, Natchez Trace on Highway 21
south of I-12 and several others.
Eastern St. Tammany Parish has not recovered to
the point of the western side of the parish, but
several sales provide support for a positive
outlook. Tammany Holding Company, LLC sold
20 lots in Lakeshore Estates to Lakeshore Properties,
LLC represented by MR. Samuel Markovich. The sale
occurred in April 2012 with a price of $1,400,000 or
$70,000 per lot. All of the lots have frontage along
lakes/canal leading to Lake Pontchartain. This is one of
the most recent bulk waterfront lot sales in Slidell. The
lots had been retailing from 2006 to 2009 with an
average of $164,000 representing a 57% discount.
Individual lot absorption for waterfront lots in Oak
Harbor and Lakeshore Estates has been relatively slow
with approximately 30 lot sales over the past 12 months.
As of late November, a total of 202 lots were listed on
the local MLS ranging from $60,189 to $172,689 per
lot. More lots are available, but are not currently listed.
DSLD has also started purchasing lots in Slidell
including Tanglewood Crossing off of Gause Boulevard
and lots in Ashton Parc north of I-12. Bulk lot prices
have ranged from $39,000 to $50,000 per lot.
Tangipahoa Parish has a number of bulk lot sales, but at
a lower price than in St. Tammany. Almost all
subdivision lots were purchased by homebuilders
(DSLD and DR Horton) in 2011 with fewer sales in
new subdivision in 2012. Bulk lot prices have ranged
from $15,000 per lot to a high of $30,000 per lot. The
better located subdivisions have been absorbed, but
there are still several less desirable subdivisions. One
recent sale occurred in Hammond for a lot price of
$12,500 for 20 lots. This is the lowest price seen in this
market.
As far as lot absorption, the custom home market is still
all but nonexistent in Tangipahoa Parish. Most
individual lot sales are being sold out of foreclosure for
heavy discounts that are still depressing the overall
market. Ponchatoula and the rural areas are still heavily
overbuilt with absorptions well below other
subdivisions closer to Hammond and I-12.
In conclusion, the continued growth in the St. Tammany
and Tangipahoa market has increased absorption of both
lots and homes. Most lots are being purchased by
homebuilders as a homebuilder recently indicated a lack
of inventory is expected in the next year or two. With
continued growth in this market and the high cost of
mitigating wetlands for new subdivisions, prices will
likely continue to rise for available lots.
ITEMS OF INTEREST
Covington
A commercially zoned cottage at 714 E. Rutland St. in the Division of St. John in downtown Covington, that was the former
retirement home of the late Archbishop Philip Hannan, has sold. It is a raised, two story, wood frame Acadian style cottage containing
2,161 SF., and sold for $300,000, or an equivalent of $138.82/SF. The building is approximately 90 years old and was in fair
condition at time of sale as it was in need of updating and deferred maintenance. According to agent Jennifer Rice, the property was
purchased for professional office use.
714 East Rutland St, Covington
A vacant, wooded parcel situated on the south side of Boston St. as it leads unto Highway 190, containing approximately 1.5 usable
acres, or 65,340 SF, sold in the spring for $265,000, or an equivalent of $4.05/SF. North of the Chimes Restaurant, the western
boundary of it fronts the Bogue Falaya River, which runs underneath a bridge on Boston St. The site was originally planned for an
office park but those plans declined when the market weakened. The purchaser was an out of town entity, and reportedly has obtained
approvals to construct a retail center on higher elevations, the first phase of which would be +/- 3,000 S.F. of space.
Work is moving right along on construction of the new Racetrac gas station and convenience store located on Highway 190 and
Harrison Avenue (a/k/a Dog Pound Rd.). The 2.02 acre site was purchased in the fall of 2011 for $1,850,000, an equivalent of $20.98/
SF.
A 4 suite retail strip center at 70360 Highway 21 (just north of I-12), known as Creek Stone Village, sold at private auction for
$1,846,333, an equivalent of $154.94/SF for 11,916 SF of building area. The center was anchored by Jose Balli, a jeweler/art retailer,
has since added a few tenants, and is expected to be fully occupied by 2013.
Christwood purchased 58.42 acres adjunct to it’s assisted living facility as part of a potential long term master plan expansion. They
paid $2,417,536 for it, or an equivalent of $41,381 per acre for the site, which is situated SE of the interchange for I-12 and Highway
21, abutting the Tchfuncte Estates single family residential subdivision.
Mandeville
A tract containing 1,422 acres on Highway 190 in Fountainebleau State Park, surrounding the Southeast Louisiana Hospital (which is
scheduled to close) sold for $6,450,000.00, or an equivalent of $4,535 per acre. It was purchased by St. Tammany Parish, for planned
drainage infrastructure improvements for the area.
1,422 Acres, Fountainebleau State Park (outlined in red)
The Mandeville Self Storage facility at 2425 Florida St. (Highway 190) in Mandeville sold over the summer for $1,700,000. It is
located near the Tammany Trace on Florida St. and has 430 self storage units, approximately half of which are drive up climate
controlled units, an amenity for these types of facilities. The new owners have conducted deferred maintenance and improved the
property.
The former Schwan’s office warehouse and cold storage build-to-suit facility in Alamosa Park, off Highway 59, on Tammany Trace,
recently sold for $864,000, or an equivalent of $94.88/SF, for 9,106 SF of building area, including a truck dock on a 3.33 acre site.
Schwan’s, a Minnesota Corp. sold the property is consolidating its frozen food operations on its core business in the Northeast. The
property may become occupied in part by Pamlab (or an entity thereof), a Covington based specialty biomedical company that
specializes in naturalized medicine.
Former Schwan’s Building, Tammany Trace
Slidell
The St. Tammany Federal Credit Union relocated a branch, selling and buying an office building in the process. It sold a 1,464 SF
office building at 862 Brownswitch Rd. for an effective price of $220,000 (or an equivalent of $150.27/SF of GBA), to move into a
larger building containing 2,200 SF at 720 Robert Blvd., bought for $320,000 (or an equivalent of $145.45/SF of GBA).
A 12.60 acre vacant commercial site adjunct to the Southern Surgical Hospital on Lindberg Drive sold for $3,000,000, or an
equivalent of $5.47/SF, a portion of which will be improved with a new, 60 unit assisted living facility. The balance of the site is
expected to be developed with a medical office and ancillary hospital services.
The CubeSmart Self Storage facility on 775 Brownswitch Road at Robert Road, above I-12, recently sold for $4,780,000. It is a
large facility, having 507 self storage units, approximately 40% of which are climate controlled units. The facility was formerly a UStore-It, and was purchased by a subsidiary of CubeSmart, and no management changes were expected.
Tangipahoa
Near the NW corner of Highway 190 and Highway 445 in Robert, north of I-12, a vacant parcel containing 16 acres was purchased
for $500,000, or an equivalent of $31,250 per acre. The site is suitable for commercial development on highway and residential
development off highway, however the purchaser had no immediate plans to develop the site and purchased it as a long term
investment. The purchaser also has an option to purchase, for 3 years, a +/- 16 acre piece adjacent to it, the western portion.
32 Total Acres, Robert
Dollar General is bullish on Hammond. Three new retail stores are being developed in various locations, including 43600 South
Airport Road (west of I-55), and the 12600 block of Wardline Road (near Durbin Road), as well as in the 42500 block of
Happywoods Road. Site sizes average up to approximately ½ of an acre, and site land has sold in the $3 to $5 per SF range. The new
stores will average approximately 9,000 SF of building area.
Murphy Appraisal Services, LLC, is a comprehensive and full-service real estate
appraisal and consulting firm with extensive experience throughout Louisiana and
Mississippi. While based and focused in the Greater New Orleans Metropolitan Area,
we historically have covered the length of the Interstate 10 and Interstate 12 corridors
from Lafayette to Baton Rouge through New Orleans and the Florida Parishes and
into the Mississippi Gulf Coast from Waveland to Pascagoula.
Since 1991, we have provided high quality commercial and residential real estate
appraisal services for a wide ranging client base including both national and locally
based institutional lenders, private individuals, estate planning professionals,
attorneys, and real estate development companies. We perform literally thousands of
appraisals annually. In fact, we are the largest appraisal firm in the state of Louisiana.
Rick Murphy
Founder Rick Murphy, who has 26 years of experience in real estate appraisal,
brokerage, and development in South Louisiana, leads a staff of 24 individuals which
includes three state certified general appraisers, eight state certified residential
appraisers, and four appraisal trainees. This includes general and residential appraiser
licenses in both Louisiana and Mississippi. In addition, this staff includes
professionals in real estate
For information and assistance, please call us at any of our office locations, toll free at 1- 877 - 410 - 4991, or visit us at our website:
www.murphyappraisal.com
Commercial Services
757 St. Charles Ave Suite 202
Hammond Office
Murphy Appraisal Services
1250 S.W. Railroad
Avenue
Covington Office
New Orleans, LA 70130
504-274-2666
Suite 200A
19411 Helenberg Road Suite 204
Covington, LA 70433
985-626-4115
Residential Services
2305 Veterans Memorial Blvd.
Suite 1
Hammond, LA 70403
985-310-4990
Metairie, LA 70002
504-838-6005
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