New Orleans Metro Prices Climbed and Are Still Going Up
What is considered the Greater New Orleans Area – the 8 parishes which include and surround the City of New Orleans and Lake Pontchartrain are reporting substantial price increases across the board for the first 6 months of 2013. Average home prices are going up and so is the cost per square foot for housing according to an analysis of real estate data for the New Orleans Metropolitan Association of Realtors by Wade Ragas, a real estate consultant and owner of Real Property Associates. This report comes out twice a year. According to his analysis, Ragas states that all but 2 parishes around New Orleans are showing pricing gains, part of a temporary surge in pricing coming out of a depressed market as part of the “bottom of the housing market” working its way back up. A combination of higher home prices and lower interest rates have balanced supply and demand. Currently, in the City of New Orleans, inventory supply is at approximately 5.5 months (the number of months it would take to sell every house on the market at fair market value). In a “normal” economy, a 6 months supply is a sign of a healthy real estate market.
Below are pricing percentage gains, home prices, and price per square foot in all metro New Orleans areas reporting gains in the first 2 quarters:
Compilation of Parish Pricing Gains:
St. Bernard Parish – 9% at an Average Price of $118,492 per House, $70 per Square Foot
St. John the Baptist Parish – 9% at an Average Price of $131,108 per House, $78 per Square Foot
Jefferson Parish – 6% at an Average Price of $196,970 per House, $104 per Square Foot
St. Charles Parish – 7% at an Average Price of $194,316 per House, $98 per Square Foot
St. Tammany Parish – 3% at an Average Price of $220,229, $103 per Square Foot
Because Orleans Parish is so diverse and spread over several wards, separated by the French Quarter and CBD, these statistics are broken out by neighborhood:
Orleans Parish by Neighborhood:
Mid-City – 9%
Gentilly – 12%
Bywater & Lower Ninth Ward – 6%
Lower Garden & Warehouse Districts – 14%
Carrollton & Holly Grove – 6%
Lakeview – 4%
French Quarter / Seventh Ward – 6%
Algiers – 2%-6%
Areas such as Uptown and Riverside as well as Broadmoor have reported steady sales with no big increases in the price of homes. The 70116 zip code, which includes much of the French Quarter, had an average price per-square-foot of $246. The highest in Jefferson Parish was 70005 in Metairie with $168 per square foot. Some areas of the Garden District have seen home prices skyrocket over fair market value, creating bidding wars on homes as soon as they hit the market. Homes in this area have sold in days sometimes hours of being put up for sale.
There are many factors which contribute to the residential boom in New Orleans. The construction of the new LSU hospital campus / complex in Mid-City is bringing in plenty of young professionals and families to work in the city. Also, the technology and entrepreneur odyssey in the City of New Orleans are bringing in home buyers interested in urban living – walking to stores and restaurants and using public transportation to get around. Other factors include the revitalization of downtown with new retail, tourism and sports development, $50 billion invested in post-Katrina projects including streets, governmnet facilities, and levee / pumping station projects, and the re-emergence of the oil and gas industry with the renovation of a natural gas facility in Chalmette as well as the discovery of 2 new oil deposits in the Gulf of Mexico.
Another aspect of the real estate market in New Orleans are post-Katrina renovated homes. As more years pass and nothing is able to be done on these homes, the homes fall more and more into disrepair. With lower interest rates and a lower average price of purchasing a home to “flip,” (down from last year’s average price of $63,013 last year to $49,799 this year), it is profitable for an investor to buy, fix up, and sell a home in a damaged neighborhood. However, statistics from the report are showing the home buyers are still hesitant to buy in those neighborhoods which “have not come back yet” from Hurricane Katrina.
Overall, the real estate industry in the Greater New Orleans area is reporting excellent numbers of sales and price gains. Everyone’s eye is on the Fed meeting September 17-18 to see how interest rates will “play out” for the rest of 2013 and beyond. If you are interested in buying a home just over 10 miles from the Central Business District of New Orleans, Contact The Parks of Plaquemines today at 504-364-2350 or E-mail [email protected].