Home News In New Orleans housing market, deals are still scarce but ‘some of the frenzy has died down’ | Business News

In New Orleans housing market, deals are still scarce but ‘some of the frenzy has died down’ | Business News

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For the past six months, Dennis Zaffuto has been trying to buy a Shotgun Double or Duplex in Mid City without success.

In his $400,000 to $450,000 price range, it’s hard enough to find a desirable home, he said. The few times he has, he’s been outbid.

“There aren’t many viable properties on the market, and when they do come up, they sell in a matter of days,” said Zahut, who is currently renting. “I recently offered an all-cash asking price, but it was bought from under me.”

High-demand areas like Mid-City, which Zaffuto is eyeing, still maintain the quick sales and high bids that have characterized New Orleans real estate in recent years, realtors say. The same is true for more expensive homes in the upscale market.







A sign advertises homes for sale in the Mid-City area of ​​New Orleans, Louisiana, Monday, January 25, 2021. (Photo courtesy of Max Becherer, NOLA.comTimes-Picayune | Defender of New Orleans)




However, real estate experts are turning their attention to several factors that suggest changes ahead, as well as some recent data.

Average 30-year mortgage interest rates are around 6.3%, compared to less than 3% in 2021, making monthly payments that were affordable a year ago likely to be much less now. . And US inflation has risen above 8% from just over 5% a year ago, keeping the price floor at bay and further reducing purchasing power.

Meanwhile, home sales in the New Orleans metropolitan nine parishes are down 10% this year compared to the same period last year, according to the Gulf South Real Estate Information Network.

Furthermore, the number of homes on the market increased by 14% in August compared to last year, increasing the monthly supply of inventory from about two months to about three months.

Taken together, it is clear the market is no longer A “seller’s market,” according to home brokers. But as Zaffuto and other buyers have found, that doesn’t mean it’s cheap.

Brokers say there is still a lot of demand in some areas, particularly Mid-City, Uptown, Bywater and parts of Old Metairie.







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Craig Mirambell Jr., CEO of Mirambell Realty, installed a For Sale sign in front of his Metaairie home on Friday, September 23, 2022. (Photo by Chris Granger | The Times-Picayune | The New Orleans Advocate)




“This is probably the strangest housing market I’ve seen in 20 years,” said Craig Mirambel, a broker who specializes in the Metairie area. For example, some homes fly off the market overnight with multiple offers.It’s house by house, block by block, it doesn’t make much sense.”

A “neutral” market

While it can be difficult to understand what is going on, the factors that influence seemingly contradictory market forces are clear.

In addition to rising mortgage rates and soaring inflation, Growing insurance crisis in a state. Eight of his insurance companies have gone bankrupt in the past year. As a result, state insurance companies of last resort are expected to raise rates by 63% from January. moreover, FEMA’s New Risk-Based Rating System Flood insurance is expected to double what half the state’s residents pay for its protection.

Indeed, home prices, a key marker of how frothy the market is, are still rising. The average selling price in the New Orleans metropolitan area is up 8% this year to $343,257, compared to $317,791 last year, and the median selling price is up 9.4%, compared to $255,000. $279,000. But when inflation is factored in, these increases were mostly on paper.

Meanwhile, monthly supply of inventory is now almost three months, up 33% from last year’s 2.1 months. Supply of less than 3 months is generally considered a seller’s market, and supply of 6 months or more is considered a buyer’s market.







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A sign advertises homes for sale in the Mid-City area of ​​New Orleans, Louisiana, Monday, January 25, 2021. (Photo courtesy of Max Becherer, NOLA.comTimes-Picayune | Defender of New Orleans)




“We’re moving toward a middle ground between the extremes of a neutral market,” said David Favret, a real estate agent at Latter & Blum, who is currently president of the New Orleans Metropolitan Real Estate Association.

However, the inventory is not evenly distributed, and there is limited affordable home inventory currently seen by brokers under $350,000.

For first-time homebuyers looking to build their wealth on a home purchase, this is a big deal.

“We have a first-time buyer that we have been looking for for a year,” says Mirambell. “They wanted Metairie. Now they’re looking for a more affordable Slidell or Luling.”

realistic pricing

The high-end segment of the market also continues to perform well. Chris Dorion, a real estate agent at Berkshire Hathaway Preferred Realtors, said luxury homes above $1 million are popular, buyers are less likely to need a mortgage, and insurance rates are lower. The move will not have a major impact, he said. .

“The true luxury market is still very strong,” he said. “New Orleans still has this reputation, and there are plenty of buyers who can afford it.”

But even in the mid- and high-end segments of the market, brokers say they’re noticing that sellers are becoming more realistic about asking prices.

“Anything affordable, realistically priced, goes fast,” said Bronn Ebert, a realtor at Franch Perrin Group. “Some of the frenzy has subsided. But the good stuff sells.”

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