The housing market is cooling throughout the country, including in New Orleans. Buyers are backing out because of the high-interest rates. When someone talks about New Orleans, the odds are equally good that it will conjure memories of Cajun food and Mardi Gras as Hurricane Katrina. The hurricane’s aftermath has come and gone, and while many left the city, the fact remains that New Orleans is still here.
As of 2024, the New Orleans housing market leans slightly towards being a buyer's market. The average homes selling below list price, coupled with a reasonable time on the market and the rarity of multiple offers, provides favorable conditions for buyers to explore options, negotiate, and make informed decisions. However, sellers with hot properties may still benefit from the ability to sell at or near the list price, presenting a balanced landscape for both parties involved.
New Orleans, a vibrant and culturally rich city located in Louisiana, has been an attractive destination for many people seeking to buy a home. With its lively music scene, delicious cuisine, and charming architecture, New Orleans offers a unique living experience. However, as with any housing market, it's essential to stay informed about the trends and prices to make an informed decision. Let us take a closer look at the current state of the New Orleans housing market, including prices, trends, and analysis.
New Orleans Housing Market Trends in 2024
How is the Housing Market Doing Currently?
The New Orleans housing market, as of 2024, presents a unique landscape for both buyers and sellers. According to recent data by Redfin, the market is characterized by a moderate level of competitiveness, with homes receiving an average of 2 offers and taking approximately 99 days to sell. However, it's noteworthy that the market is not as cutthroat as some other metropolitan areas, offering a more relaxed atmosphere for potential homebuyers and sellers alike.
The median sale price of homes in New Orleans stood at $325K last month, reflecting a modest decrease of 1.2% compared to the previous year. This dip in median prices indicates some market fluctuations but also creates opportunities for those looking to make a real estate investment in the city. Additionally, the median sale price per square foot has seen a more substantial decline, dropping by 12.2% since the previous year, reaching $191. This metric provides a deeper insight into the pricing dynamics within the housing market.
Comparatively, New Orleans's median sale price is 19% lower than the national average, showcasing a more affordable housing market within the city. The affordability factor may attract a diverse range of buyers, contributing to the overall stability of the market.
How Competitive is the New Orleans Housing Market?
New Orleans is not considered highly competitive in the real estate arena, creating a favorable environment for those looking to buy or sell property. Homes typically spend around 99 days on the market, indicating a reasonable timeframe for both parties to make informed decisions. Multiple offers are relatively rare, providing a less stressful experience for home sellers.
Moreover, the average homes in New Orleans sell for about 5% below the list price. This trend suggests a buyer-friendly market, with opportunities for negotiation and potential savings for those in search of their dream home. On the flip side, hot homes that generate significant interest can sell for around the list price, but they still boast a relatively swift pending period of approximately 52 days.
Are There Enough Homes for Sale in New Orlean to Meet Buyer Demand?
Addressing the supply and demand dynamics, the New Orleans housing market appears to offer a balanced inventory. With an average of 2 offers per home, there is enough demand to keep the market active without overwhelming sellers. The 99-day average on the market provides a comfortable window for buyers to explore options without facing the urgency commonly associated with highly competitive markets.
What is the Future Market Outlook?
Looking ahead, the future market outlook for New Orleans remains positive. The city's real estate market is positioned for growth, with recent data indicating both stability and affordability. While minor fluctuations in median prices may occur, the overall trajectory suggests a resilient market that caters to a diverse range of buyers and sellers.
Exploring the migration and relocation trends in New Orleans from December '23 to February '24 reveals interesting insights. During this period, 21% of homebuyers expressed interest in moving out of New Orleans, while a significant majority, 79%, looked to stay within the metropolitan area. This internal focus on relocation highlights the appeal of the city and the desire of residents to remain in the vibrant New Orleans community.
Examining where people are moving to New Orleans from on a national scale, 0.42% of homebuyers searched to move into New Orleans from outside metropolitan areas. Notably, Los Angeles homebuyers topped the list, showing a keen interest in making New Orleans their new home, followed by buyers from New York and Chicago. This influx of interest from diverse locations speaks to the city's attractiveness and potential for growth in the coming years.
Tips for Buyers in the New Orleans Housing Market
Whether you're a first-time homebuyer or looking to relocate to New Orleans, navigating the real estate market requires careful consideration. Here are some valuable tips to guide you through the buying process:
- Understand the Market Dynamics: Recognize that the New Orleans housing market is not highly competitive. This means you might have more time to make decisions, but it's essential to stay informed about pricing trends and property values.
- Consider Long-Term Value: Learn which home features add value in New Orleans. Whether it's historic charm, modern amenities, or proximity to schools and parks, understanding local preferences can help you make a wise investment.
- Explore Nearby Cities: If New Orleans doesn't fully align with your preferences, consider exploring nearby cities. Redfin's Compete Score and data on multiple offers can guide you in finding a location that better suits your needs.
- Be Mindful of Migration Trends: Understanding migration patterns can impact your buying decision. Whether you're moving in or staying within the metropolitan area, knowing where people are coming from and going to can provide valuable context.
New Orleans Housing Market Forecast for 2024 and 2025
According to Zillow, the average home value in New Orleans stands at $241,439 as of January 31, 2024, reflecting a 7.7% decrease over the past year. Homes in the area typically go pending within approximately 67 days. Let's delve into specific housing metrics to gain a comprehensive understanding of the current real estate landscape.
Key Housing Metrics Explained
For Sale Inventory
As of January 31, 2024, the New Orleans housing market boasts a for-sale inventory of 1,956 properties, indicating the availability of diverse housing options for potential buyers.
New Listings
During January 2024, the market experienced 267 new listings, contributing to the city's vibrant real estate activity and providing fresh opportunities for prospective homeowners.
Median Sale to List Ratio
As of December 31, 2023, the median sale to list ratio in New Orleans was 0.959, emphasizing the balanced relationship between listed and sold prices, showcasing stability in the market.
Median Sale Price
As of December 31, 2023, the median sale price of homes in New Orleans reached $276,500, reflecting the average cost of properties sold during that period.
Median List Price
On January 31, 2024, the median list price for homes in New Orleans stood at $348,000, providing insights into the current pricing trends in the market.
Percent of Sales Over/Under List Price
As of December 31, 2023, 8.6% of sales in New Orleans were over list price, while 79.1% were under list price, showcasing the diverse range of deals and negotiation dynamics in the real estate transactions.
New Orleans MSA Housing Market Forecast
In terms of the Metropolitan Statistical Area (MSA) forecast, as of January 31, 2024, Zillow predicts a -0.2% change by February 29, 2024, with a subsequent stabilization by April 30, 2024, and a modest decline of -1.3% by January 31, 2025. This forecast provides insights into the anticipated trends in the New Orleans housing market over the coming months.
The New Orleans Metropolitan Statistical Area (MSA) encompasses the city and its surrounding counties, playing a pivotal role in shaping the region's housing market. Comprising parishes in Louisiana, the MSA represents a significant geographical area where real estate trends can impact a diverse range of communities. The size of the housing market is substantial, reflecting the combined influence of urban and suburban landscapes within the broader New Orleans MSA.
Are Home Prices Dropping in New Orleans?
As of January 31, 2024, the data indicates a 7.7% decrease in the average home value over the past year. While this may suggest a decline, it's essential to interpret this figure in the context of other metrics. The median sale price, though slightly lower, portrays a stable picture. The market is experiencing adjustments rather than a drastic drop in home prices.
Will the New Orleans Housing Market Crash?
Considering the available data and market indicators, there is no indication of an imminent housing market crash in New Orleans. The metrics, such as the median sale to list ratio and inventory levels, point towards a balanced and resilient market. While adjustments are occurring, a crash is not foreseen at this time.
Is Now a Good Time to Buy a House in New Orleans?
For potential homebuyers, the current conditions in the New Orleans housing market present favorable opportunities. With a median sale price that has adjusted but remains reasonable, coupled with a diverse inventory, now could be a good time to consider purchasing a home. Buyers can explore options, negotiate effectively, and make informed decisions in this dynamic yet stable market.
New Orleans Real Estate Investment Overview
If you are looking at buying a house in New Orleans as a potential investment opportunity, you must read it till the end. Investing in real estate is touted as a great way to become wealthy. Is New Orleans rental property good for investment? Planning to invest in the New Orleans real estate market? Many real estate investors have asked themselves if buying a property in New Orleans is a good investment. You need to drill deeper into local trends if you want to know what the market holds for the year ahead.
As per the data from the real estate company called Neigborhoodscout.com, with a population of 383,997, 153,819 houses or apartments, and a median home price of $301,010, New Orleans real estate is some of the most expensive in Louisiana, though New Orleans home values are not among the most expensive in the United States. Single-family detached homes are the single most common housing type in New Orleans, accounting for 45.0% of the city's housing units.
Other types of housing that are prevalent in New Orleans include duplexes, homes converted to apartments or other small apartment buildings ( 24.1%), large apartment complexes or high-rise apartments ( 20.3%), and a few row houses and other attached homes (10.2%). People in New Orleans primarily live in small single-family detached homes. We have already discussed the New Orleans housing market forecast for answers on why to put resources into this sizzling market. Here are some of the reasons to invest in New Orleans real estate for the long term.
The Diverse Economy
New Orleans has much more than tourism to fuel its economy. It is a major port. It is the commercial and economic hub for the Gulf Coast, the home to hospitals and schools. The Gulf of Mexico oil and gas industry has a strong presence there. Tourism, though, is a major contributor to the local economy. Tourism accounts for about two-fifths of their tax revenues.
The Sheer Demand for Rental Properties
New Orleans has a mixture of owner-occupied and renter-occupied housing. One of the lasting effects of Hurricane Katrina was the destruction of affordable properties in the New Orleans real estate market because they sat in the flood plain. Many who owned their homes had to move because rebuilding in below-sea-level areas was not permitted. Some left the area altogether, though others returned within a year and Hispanic immigrants working in the tourism industry have filled in the gap. This has resulted in high demand for New Orleans rental properties.
The military and government contractors also contribute to the demand for New Orleans rental properties. For example, the Navy’s SPAWAR Systems Command is located in Gentilly. There is a Naval Air Station Joint Reserve Base in New Orleans. The marine force federal reserves are in nearby Algiers. Then there is NASA’s rocket manufacturing facility in New Orleans run by Lockheed Martin. Note that Louisiana offers more protection for military tenants than average, such as letting them terminate the lease without penalty if government-supplied quarters become available or if they’re ordered to move into the barracks.
New Orleans has been one of the largest cities in the United States and the largest in the region for literally 200 years. It is home to Tulane University, Loyola University New Orleans, the University of New Orleans, Xavier University of Louisiana, Southern University at New Orleans, Dillard University, the University of Holy Cross, the Notre Dame Seminary, New Orleans Baptist Theological Seminary, Herzing College and several smaller schools. This means you can own multiple New Orleans rental properties, each catering to a different school. You can essentially diversify your portfolio while catering to college students.
The Short-Term Rental Opportunity
New Orleans had almost 18 million people visit in 2017. This creates significant demand for hotel space, though many choose to stay in New Orleans rental properties instead. What matters to investors considering the New Orleans real estate market is the fact that the city passed laws legalizing and regulating short-term rentals. You do have to secure a city license, go through inspections, and meet zoning restrictions. However, this is far better than the cities that have made it almost impossible to buy the property and turn it into short-term rental properties.
Airbnb was legalized in the New Orleans real estate market in 2016 and it's been growing quite well since then. Therefore, you can choose to invest in Airbnb rentals in New Orleans and earn a steady rental income. The upfront cost of running an Airbnb business is not much as you do not need to own a rental property. However, if you want, you can buy a property in New Orleans for an Airbnb investment. Unlike big cities like New York, the regulations on short-term rentals in New Orleans are not very tight, though there is some criticism from opponents about the leniency of these laws.
The Economics Driving Demand for Rentals
There are a number of factors driving demand for rentals in the New Orleans real estate market. The destruction of a fraction of the New Orleans housing market made the value of everything livable much higher. The flight of many residents did not hurt real estate prices much, because it paralleled the decreased number of homes. Rebuilding has occurred, with many new properties built in the suburbs away from the water. The influx of Hispanics and local kids coming for college and staying to work prevented wages from skyrocketing. In fact, they have stagnated. This keeps many people renting who would otherwise buy homes in the New Orleans housing market. This is why rents hit almost a thousand dollars a month in 2017.
The Landlord-Friendly Jurisdiction
If you are considering buying New Orleans rental properties, one of the next questions is how landlord-friendly the jurisdiction is. High return on investment only happens if tenants pay the rent, and that depends on the ability to quickly evict those who do not pay. If you have to go through a long, expensive legal process to kick out someone who sells drugs, intentionally damages the property, or disrupts the neighborhood, you do not want to invest there.
Fortunately, owners of New Orleans rental properties have the law on their side. The South in general is landlord-friendly, though individual cities can toughen up their laws to favor tenants. New Orleans has gone the other way, protecting landlords. Note that Louisiana’s French flavor means that the state has a number of legal quirks, so always work with an attorney to draft a lease agreement.
The Affordable Real Estate
The typical home price in the New Orleans housing market is 350K dollars. That alone makes it affordable compared to other large cities. One of the unique features of New Orleans is how many older homes it has. This does not just create a distinct architectural look and cultural atmosphere. It means that there are many older homes for sale. For example, in Orleans Parish, roughly two-fifths of all homes were built before the 1950s. These homes may be harder to maintain, but they also tend to be affordable and in walkable communities that newer residents desire. It also opens the door to investors buying homes in dire need of repair at a discount, fixing it, and then renting it out.
The Impact of Geography
One of the biggest factors in the New Orleans real estate market is geography. The city was built as a port because it sits on the mouth of the Mississippi River where it meets the Gulf of Mexico. On top of this are myriad lakes, sinking mud islands, and other uncertain ground where you cannot build. This means that a large part of the metro area is off-limits to development.
They simply cannot expand the housing market in New Orleans in several directions. Then there are the protected wetlands near city that you cannot build on. Geography literally constrains growth in the New Orleans housing market, and laws to protect the character of the city limit the ability to build skyscrapers and other high-density development. This protects the value of homes in the New Orleans real estate market.
Here are some of the best neighborhoods in New Orleans to invest in real estate because they have the highest real estate appreciation rates since 2000 (List by Neigborhoodscout.com).
- Bywater East
- St. Roch Southeast
- St. Claude Southeast
- Bywater
- St. Claude
- St. Roch South
- Holy Cross South
- St. Thomas Development
- St. Thomas Development West
- Coliseum Square
References
Market Data, Trends and Statistics
https://www.zillow.com/neworleans-la/home-values
https://www.neighborhoodscout.com/la/new-orleans/real-estate
https://www.redfin.com/city/14233/LA/New-Orleans/housing-market
https://www.realtor.com/realestateandhomes-search/New-Orleans_LA/overview
Military Market
https://en.wikipedia.org/wiki/New_Orleans#Business
https://www.avail.co/education/laws/louisiana-landlord-tenant-law
Landlord friendly
https://www.theadvocate.com/gambit/new_orleans/news/article_ea6cfdac-fc09-5dae-8480-4768a93ab6b5.html
Demand for rentals
https://www.theadvocate.com/gambit/new_orleans/news/article_ea6cfdac-fc09-5dae-8480-4768a93ab6b5.html
https://www.bigeasymagazine.com/2019/02/11/pushed-out-the-changing-demographics-of-new-orleans
Short term rentals
https://www.mashvisor.com/blog/new-orleans-real-estate-market-airbnb
Affordable real estate
https://www.bigeasymagazine.com/2019/02/11/pushed-out-the-changing-demographics-of-new-orleans