An Overview of New Orleans Real Estate Market 2019
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. Let’s take a look at the state of modern New Orleans before sharing the top 10 reasons to invest in the New Orleans real estate market. If you are looking at buying a house in New Orleans as a potential investment opportunity, you must read till the end.
New Orleans definitely has a track record of being one of the best long term real estate investments in the U.S. While a large number of people fled New Orleans after Hurricane Katrina, the city remains home to roughly 400,000 people. It remains the largest city in Louisiana. However, the New Orleans housing market is larger than this. The greater New Orleans area is home to around 1.3 million people. If you factor in Metairie and Hammond, the metro area is home to roughly 1.5 million. Let us discuss the latest market trends and find out what are the prospects of New Orleans real estate investment.
New Orleans Real Estate Market Forecasts 2019 & 2020
The median home value in New Orleans is $178,700 on Zillow. New Orleans home values have declined -5.4% over the past year and Zillow's New Orleans real estate market prediction is that the prices will fall -3.5% within the next year. The median list price per square foot in New Orleans is $218, which is higher than the New Orleans-Metairie Metro average of $142. The median price of homes currently listed in New Orleans is $345,000 while the median price of homes that sold is $227,600. The median rent price in New Orleans is $1,500, which is higher than the New Orleans-Metairie Metro median of $1,450.
According to LittleBigHomes.com, the New Orleans City real estate market forecast for the 12 months ending with the 3rd Quarter of 2019 is positive. Their accuracy of the New Orleans real estate market trend prediction is 79%. Accordingly, they estimate that the probability for rising home prices in New Orleans is 79% during this period. If this Housing Market Forecast is correct, home prices will be higher in the 3rd Quarter of 2019 than they were in the 3rd Quarter of 2018.
New Orleans Oregon Housing Market Forecast 2019 – 2021
The New Orleans housing market forecast for the 3 years ending with the 3rd Quarter of 2021 is also positive. The accuracy of the New Orleans housing market trend prediction is 74%. Accordingly, LittleBigHomes.com estimates that the probability for rising home prices in New Orleans is 74% during this period. If this Housing Market Forecast is correct, home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the New Orleans Real Estate Market Forecast.
New Orleans Real Estate Market Trends
New Orleans real estate market trends show a 1% week-over-week rise in average listing price and a 5% rise in median rent per month. Trulia has 1,110 resale and new homes for sale in New Orleans, LA, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.
Data by Redfin.com shows that the New Orleans housing market is not very competitive. Homes in New Orleans receive 1 offers on average and sell in around 61 days. The average sale price of a home in New Orleans was $285K last month, up 0.88% since last year. The average sale price per square foot in New Orleans is $165, up 1.5% since last year. Homes typically receive 1 offer. Homes in the New Orleans housing market sell for about 4% below list price and go pending in around 61 days. Hot Homes in New Orleans can sell for around list price and go pending in around 15 days.
New Orleans Housing Market Statistics
- Average Listing Price: $413,596 (Trulia)
- Median Rent Per Month: $1,570
- Average Sales Price: $285,000 (Redfin)
- Price Per Sqft: $165
- Median Household Income: $35,441 (Trulia)
- Home Owners: 47%
- Single Residents: 46%
- Median Age: 37
- College Educated: 29%
- Transportation: 88% people commute by car; public transport is available
There are 3,521 homes for sale in New Orleans, ranging from $5K to $8.3M on Realtor.com. 192 of which were newly listed within the last week. Additionally, there are 1,208 New Orleans rental properties, with a range of $15 to $37.5K per month. The median list price of homes in New Orleans, LA was $279K in February 2019, trending up 3.7% year-over-year. The median listing price per square foot was $177.
The median list price in New Orleans is $369,000 on Movoto.com. The median list price in New Orleans was less than 1% change from April to May. New Orleans's home resale inventories is 1,578, which increased 32 percent since April 2019. The median list price per square foot in New Orleans is $225. April 2019 was $226. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in May.
New Orleans Single Family And Multi-Family Homes
Following the housing market decline in 2007, single family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate. Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units.
As per the data from the real estate company called Neigborhoodscout.com, the median house price in New Orleans is $238,636, which indicates that home prices in New Orleans are above the national average for all cities and towns. Single family detached homes are the single most common housing type in New Orleans, accounting for 44.55% 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 ( 25.67%), large apartment complexes or high rise apartments ( 19.30%), and a few row houses and other attached homes ( 9.90%).
People in New Orleans primarily live in small (one, two or no bedroom) single-family detached homes. New Orleans has a mixture of owner-occupied and renter-occupied housing. Currently, there are 1,682 single family homes for sale in New Orleans, LA on Zillow. These include upcoming potential listings such as properties which are in the stage of Pre-Foreclosure. Additionally, there are 291 single family homes for rent in New Orleans, LA.
New Orleans, LA Foreclosures And Bank Owned Homes
The percent of delinquent mortgages in New Orleans is 2.2%, which is higher than the national value of 1.1%, according to Zillow.com. With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth. The percent of New Orleans homeowners underwater on their mortgage is 13.6%, which is higher than New Orleans-Metairie Metro at 11.8%.
- Foreclosures in New Orleans = 364 (RealtyTrac)
- Homes for Sale in New Orleans = 506
- Median List Price = $295,000 (18% ⇑ vs Mar 2018)
There are currently 364 properties in New Orleans, LA that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 506. In April 2019, the number of properties that received a foreclosure filing in New Orleans, LA was 11% higher than the previous month and 28% higher than the same time last year.
Home sales for March 2019 were up 0% compared with the previous month, and down 100% compared with a year ago. The median sales price of a non-distressed home in New Orleans was $0. The median sales price of a foreclosure home in New Orleans was $0, or 0% higher than non-distressed home sales.
New Orleans Home Prices And Real Estate Appreciation
New Orleans real estate appreciated 40.30% over the last ten years, which is an average annual home appreciation rate of 3.44%, putting New Orleans in the top 20% nationally for real estate appreciation. Over the last year, New Orleans real estate appreciation rates have trailed the rest of the nation. In the last twelve months, New Orleans's real estate appreciation rate has been 2.97%, which is lower than appreciation rates in most communities in the U.S. In the latest quarter, the house appreciation rates in New Orleans were at 1.32%, which equates to an annual appreciation rate of 5.39%.
The above statistics on real estate appreciation in New Orleans were taken from NeighborhoodScout.com. You can visit their page for more information. Relative to Louisiana, their data shows that New Orleans's latest annual appreciation rate is higher than 80% of the other cities and towns in Louisiana.
10 Best Neighborhoods In New Orleans For Real Estate Investment
There are 259 schools in New Orleans, LA. There are 68 elementary schools, 61 middle schools, 30 high schools and 100 private & charter schools. There are 79 neighborhoods in New Orleans. Some of the best neighborhoods in or around New Orleans, Louisiana are French Quarter, Audubon and Lakeview Park.
Audubon has a median listing price of $799K, making it the most expensive neighborhood. Little Woods is the most affordable neighborhood in New Orleans, with a median listing price of $139.9K. Here are the 10 best neighborhoods in New Orleans to invest in real estate because they have the highest real estate appreciation rates (List by Neigborhoodscout.com).
Why Should You Invest in New Orleans Rental Properties?
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 good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.
We have already discussed the New Orleans housing market 2019 forecast for answers on why to put resources into this sizzling market. Home prices in New Orleans have been trending up 3.7% year-over-year. Here are the top 10 reasons to invest in the New Orleans real estate in 2019.
1. 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.
2. The Military Market
The military and government contractors contribute to 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.
3. The Student Market
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.
4. 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 property and turn it into short-term rental properties.
5. The Sheer Demand for Rentals
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.
6. 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 for 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.
7. 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.
8. The Volume of Affordable Real Estate
The average home price in the New Orleans housing market is 180,000 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.
9. 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 built. 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.
10. New Orleans Airbnb Regulations
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 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.
New Orleans Real Estate Investment
Maybe you have done a bit of real estate investing in New Orleans, LA but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. If you are a home buyer or real estate investor, New Orleans real estate investment definitely has a track record of generating one of the best long term returns in the U.S. through the last ten years. If you invest wisely in New Orleans real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate.
Most investors naturally gravitate to residential property investment. When looking for the best real estate investments, you should focus on markets with relatively high population and employment growth. Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.
You must also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing in some of the best real estate markets like New Orleans, LA. New Orleans offers a good combination of short-term renters like students and tourists and a permanent population of renters who cannot afford to buy homes. Geography and market forces limit housing supply, keeping home values and rents stable.
Buying an investment property is different from buying an owner-occupied home. Whether you are a beginner or a seasoned pro you probably realize the most important factor that will determine your success as a Real Estate Investor in New Orleans, LA is your ability to find great real estate investments in that area.
According to real estate experts, buying in a market with increasing prices, low interest, and low availability requires a different approach than buying in a cooler market.
We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
Other Best Places To Invest In Real Estate
Another market that we suggest is the housing market in Bend, OR. Bend, Oregon is arguably everything that Portland isn’t. It has lower taxes, more open space, more affordable real estate and attracts visitors from all over the country. It is a good place to consider investing if you’re willing to take up the challenge.
The median home in Bend, Oregon sells for around 425,000. The average list price is around half a million dollars. In Portland, the figures are similar but are pulled down by a larger number of one and two bedroom condominiums and two bedroom starter homes. The Bend OR housing market is expected to see a 3 percent increase in property valuations in 2019. In contrast, Portland’s housing market has cooled. Prices may remain stable in Portland, or they may even decline one percent in 2019.
Another market that we suggest is the housing market in Iowa City. While the Iowa City real estate investment market is not overheated or exciting, it offers strong fundamentals like a large rental population relatively immune to rental rates. It will see slow, steady growth in property values and rental rates for years to come.
Investors in hot real estate markets have to wonder if the appreciation and rental increases will stop when a wave of new inventory hits the market. The Iowa City housing market does not face this problem. Instead, demand for existing Iowa City real estate market remains steady while the supply is constrained by a lack of construction. Replacing homes that flooded or burned down does not bring new inventory to a slowly growing market.
Let us know which real estate markets you consider best for real estate investing! If you need an expert investment advise, you may fill up the form given here.
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*Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
Short term rentals https://www.mashvisor.com/blog/new-orleans-real-estate-market-airbnb
Demand for rentals
Affordable real estate https://www.bigeasymagazine.com/2019/02/11/pushed-out-the-changing-demographics-of-new-orleans
Market Data, Trends and Statistics