Metro New Orleans Real Estate Blog

Metro New Orleans Real Estate Prices Hold Steady Through June 2010

July 22, 2010

Average prices of New Orleans single family homes remained firm during the first half of 2010.

Properties listed in very good or better condition sold for an average of $115 per square foot during April through June. This price is slightly higher than the $113 level seen in the first quarter and very slightly lower than the Spring market in 2009.

Please click the accompanying chart to view the recent price trend plotted quarterly.

 

New Orleans Real Estate Prices During the Last Few Years

The New Orleans region saw a steady increase in home prices in the years prior to Hurricane Katrina in 2005. From 1997 through 2004, single family homes listed in move-in condition increased in price from an average of $68 per square foot to $100 per square foot. This computes to an average of 5.7% a year, somewhat higher than inflation, but sustainable over time.

In 2005, prices increased by 8.9%, a high rate for the region, but much lower than national averages. In August 2005, Katrina damaged much of the home stock, resulting in a sharp price rise of 13.8% in 2006. This increase was largely due to reduced supply of inhabitable properties.

Area prices peaked during the second quarter of 2007 at $126 per square foot and fell to $112 by the first quarter of 2009. Since that time, prices have held near $114 per square foot.

From our peak price quarter to our lowest recent quarter, average prices fell by an average of 11.1%. This loss compares to devastating 30% to 50% declines suffered by many markets across the USA.

Metro New Orleans Home Prices Did Not Tank

There are several good reasons New Orleans Region real estate prices have remained resilient in the face of national recession and substantial declines in home prices.

• We did not experience unsustainable double digit percentage yearly increases during the early part of the 2000s.
• Our mortgage brokers are licensed and must comply to a code of standards. In some of the states where prices got out of hand, mortgage brokers had little training and were encouraged to loan money to anyone, properly qualified or not.
• As a result, Louisiana's foreclosure rate is among the lowest of any state.
• During 2005 and 2006 when prices were rocketing upward in many areas, we were recovering from Katrina. The housing bubble scarcely touched us.
• Our region's unemployment rate remains far below national averages.

Where Do New Orleans Area Home Prices Go from Here?

That's the $64,000 question. All the past data in the world can only show where prices have been, not where they are headed.

Locally, we can say for sure that since late 2008, prices have been rock steady in the $112 to $116 per square foot range. Near-term economic growth looks promising, and employment levels remain strong.

Nationally, some highly distressed housing markets seem to be recovering, and other economic indicators are looking up. Time will tell whether this recovery has legs.

Meanwhile, we will carefully monitor developments in the New Orleans real estate market. Please visit us again soon.

For more historic information, check out our Metro New Orleans home prices page which details pricing trends in several of our favorite neighborhoods.

If you have any questions or comments, just call or email.

 

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Low Interest Home Loans and Down Payment Assistance Offered in Jefferson Parish

May 5, 2010

The Jefferson Parish Finance Authority is offering low interest home loans and grants to help cover down payments and closing costs to buyers of homes in Jefferson Parish. An applicant must meet a number of requirements to qualify.

Program Offerings

• 5.35% Mortgage Rate
• A grant of 4% of sales price to help cover down payment and closing costs

Program Requirements

• The combined annual gross income of all persons who intend to reside in the residence must not exceed $71,760 for a family of one or two and $83,720 for a family of three or more.
• The cost of the home cannot exceed $316,177.
• The home must be located in unincorporated areas of Jefferson Parish.
• The borrower must occupy the home within sixty days of purchase.
• Refinancing is not allowed.
• Mortgage loans must be originated and delivered to the Master Service on or before November 19, 2010.
• All loans must be single family FHA or FHLMC insured, USDA-RD or VA guaranteed and eligible for conversion to GNMA securities. The lender will determine loan eligibility subject to Master Servicer approval.
• One point will be paid by or on behalf of the borrower on each mortgage loan.

About the Jefferson Parish Finance Authority

Established in 1979 by the Jefferson Parish Council, the Jefferson Parish Finance Authority is a public trust that provides financing of mortgage loans on single family residential property. The JPFA funds these loans by issuing Mortgage Backed Revenue Bonds secured by the underlying loans and guaranteed by the Federal Government.

Since its founding, the JPFA has financed over 11,000 loans totaling more than $800,000,000. By offering interest rates competitive with the conventional mortgage market as well as other incentives, the JPFA assists credit worthy home buyers to become home owners. This ownership helps build the Parish both economically and culturally.

For a list of qualified lenders or for further information, please contact us.

New Orleans Area Home Sellers: In a Buyers' Market, Will Your Home Sell or Sit?

March 30, 2009

Metro New Orleans home sellers competing in today's strong buyers' market face special challenges and considerations. More than ever, proper pricing and preparation of a home are vital to a successful real estate sale.

Pricing - Get the Full Story

If you are preparing to put your Metro New Orleans home up for sale in the current buyer’s market, it is important that you know the full facts about your neighborhood’s residential sales market. This can be tricky.

Sometimes, to get an idea about pricing their own homes, prospective sellers may inquire about pricing, square footage, condition and features on homes that recently sold in their neighborhoods. This is not enough information to properly price a home to sell.

There are often crucial factors that turn "For Sale" into "Sold,' and these have a bearing on optimal pricing. Some of these behind the scenes considerations are:

• Did the seller reduce the asking price to attract buyers?
• The eventual sold price may not be known for quite some time, and there is often a big difference in asking price and selling price.
• Did the seller complete cosmetic and even structural upgrades to attract buyers?
• In this competitive market, sellers often provide a variety of perks to entice a buyer to select their homes. Therefore, the sales price alone does not always convey all the terms and conditions of the sale.
• Did the seller pay closing costs for the buyer? This could be a big number.
• Did the seller pay to buy down the buyer’s interest rate so the buyer could have a lower monthly payment?
• What repairs were made after inspections that may have taken thousands of dollars of an owner’s equity just to close the sale?

Your real estate professional’s job is to supply answers to these and other questions. These facts can make a big difference in pricing your home and thereby separate a satisfactory sale from a disappointment.

Optimal home pricing is not easy. To paraphrase the late Paul Harvey: “It pays to know . . . the rest of the story.”

Condition is Paramount

The past couple of years, buyers have typically fallen into one of two categories:

• They want a home in top condition, updated, fresh and ready to move into.
• They want a home value priced (that means below market) and in need of extensive renovation. These buyers are usually investors who have budget numbers that must work for them or they are not interested.

If your home is not a renovation candidate to be sold at a bargain price, you must make it competitive with the many homes listed in excellent condition that are currently on the market.

Living in a house while work is done can be painful. Many sellers want to provide allowances or have someone “make an offer” taking deficiencies into consideration rather than doing the actual work themselves.

This strategy is usually not successful in a buyers' market. The buyer has lots of choices, and if his goal is to buy a home in “move in” condition, he will find one sooner rather than later.

The plain truth is that if a home is in a decent location, priced right and in great condition, it sells and usually fairly quickly even in a buyers' market. Homes that just sit on the market are often in outdated condition and usually overpriced.

Home Upgrades that Make Dollars and Sense

There are some upgrades that will more than pay for themselves in terms of price returns at a sale. Other upgrades may not. In some cases, just a little bit of money invested can go a long way in upgrading a home. These circumstances vary considerably from one property to another.

It is essential to get input from a professional who knows the market and what it takes to make a home attractive in that market. In addition, that consultant should have experience in home design and renovation and have contacts in the building trades to help organize the upgrade process.

A Word to the Wise

This is a buyers' market, and buyers do not care what you paid for your home, what kind of shape your mortgage account is in or what your home used to be worth.

In this challenging environment, do not try to figure out this market on your own or work through it without help. It has never been more important than now to call a trustworthy REALTOR® professional.

Finding the right real estate agent to advise and consult with you should be your number one priority right now. Our resources in helping you are considerable. We invite you to call today.

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