Across the United States, home prices are on the rise still and inventory is still behind. In New Orleans, this is no different as the lack of inventory and high home prices still remain.
Late spring of 2020 the COVID-19 pandemic changed the home market. Sellers were scared to put their homes on the market because of the economic threat the pandemic had put on the nation. Still 16 months into the pandemic and sellers are still wary about listing their homes on the market.
Although the inventory is down, buyers are still out there. Many want to purchase a larger home because of the need for space. Labor shortages have brought on sign-on bonuses and incentives meaning there are more people that can afford a new home.
Around the New Orleans area, the median house price was up 17% in June 2021 compared to the first of 2021. As for the inventory in the Big Easy, there was a 45% decline in listings compared to that of June 2020. Home sales reflected a 12% jump in June 2021. Bidding wars have become the norm and buyers are being very competitive with their offers.
First-time homebuyers in the New Orleans area are having a much harder time finding a home to purchase. The rising home prices and the bidding wars make it nearly impossible. Areas such as St. John the Baptist Parish saw a median home price of $150,000 before the pandemic but in June 2021 the median home price had risen to $205,000.
According to a report by Reinvestment Fund, a public policy consultant, the home prices in New Orleans rose 12% from 2018 to 2020. The average home price across New Orleans rose the same time to $224,600. In some areas such as New Orleans East, the Lower 9th Ward and Algiers the prices close to tripled over the same time period.
“In the greater metro area, new-build houses are going to start in the $250,000-to-$275,000 range, and that is going to be supercompetitive,” he said. “So, people in the affordable categories don’t get a shot at those properties, even if they can get together the financing with the help of government said Michael Merideth, CEO of VPG Construction. programs, because market-rate builders are going to go with regular buyers who can close in under 45 days.”
“There is a lack of supply of affordable housing, and it is decades from being met if states and communities don’t start building” houses that can be afforded by people of lower and moderate incomes, Deborah La Franchi, managing principal of American South Fund Management said.