New Orleans Real Estate Market

New Orleans Real Estate Market

New Orleans Home Prices Begin To Level Off

The cost to own or rent a home in the City of New Orleans, LA has been rising for years, but the trend of being priced out of the city is beginning to change.

Prices have been rising since the revitalization after Hurricane Katrina struck in 2005.  After the catastrophic hurricane, the homes that were renovated and ready to live in were at an all time low in supply.  If they were not destroyed in the Hurricane, they were in high demand.  This was one of the reasons for the Northshore’s huge growth.  The property values of Covington homes and Mandeville homes shot up because they were “high and dry”. New Orleans natives were scooping them up at whatever cost just to stay in their city. The prices rose.

As new construction soon began popping up, more homes were available.  Still, getting back into the City was pricey for natives eager to return.  Builders knew the supply and demand conditions would be a big payoff for them for a few years after Katrina, and they capitalized on that.

Shortly after the hurricane, you would find single, shotgun style homes that were going for $300,000.  That runs about $300.00 per square foot. Too costly for most natives to return home, coupled with the rise in crime, it just didn’t make sense to move back.  Until now.

Bringing The Price Back To Affordability

Looking at the prices of 2016, we have seen the cost of Real Estate in New Orleans neighborhoods starting to level off, and it was due to flatten out and go down a little.

2016 showed a slow down in the oil and gas industry, and the capping off of the film tax credit did cause some Louisiana jobs to move elsewhere.  Also, typically during a presidential election year, things slow down on the Real Estate front as a whole.

There appears to be a little bit of an oversupply and that will put pressure to moves prices downward some.  This oversupply will also cause rentals and sales to stay on the market a little longer in some neighborhoods of New Orleans.

Home Prices for 2018

The home prices for 2018 have continued to rise.  Still, with Mandeville and Covington and other communities on the Northshore doing very well.  New Orleans proper has seen gains too, just not quite as strong.

Higher Priced Neighborhoods Affordable Again

The Uptown, and the Warehouse District are higher priced markets that too will see price drops, and some will be significant.  This is not to go as far as to call it depreciation, or a “Buyer’s Market“, but can be viewed as a slow down on appreciation.  This will help natives to move back into the cities higher end neighborhoods they once fled after Katrina.

Recovery Still Going On

There are still parts of New Orleans that have not recovered.  Homes are gone, but the land where they once sat remains.  Real Estate experts in the area predict these areas will again have homes built that are affordable.  As with any catastrophic event in Real Estate, there comes a time that prices level back out, and people can come home.  That time appears to be now, and all eyes are on the prices for 2017.  This will only be measured by the amount of people returning to the City.

 

Home Warranty Basics For Buyers & Sellers

Home Warranty Basics For Buyers & Sellers

 

What Is A Home Warranty

Being educated on the real estate process is important.  Home Warranty Companies have been around since the 1970’s.  They provide repair and replacement services for a home you are purchasing, or even your existing home.  If you are one who does not like expensive surprises, a Home Warranty may be a great option for you.

A Home Warranty is not to be confused with Homeowner’s Insurance, which covers your home’s structure and contents (depending on your policy) in case of theft, fire, storm, and other covered acts of nature.  There is also Flood Insurance that may be required, and is separate from both the Homeowner’s Insurance, and the Home Warranty.

A Home Warranty in comparison to Insurance, can cover repairs and replacements on covered items (based on the Home Warranty Policy) due to normal wear and tear, not acts of nature

Benefits To Buyer And Seller

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When purchasing a home, a buyer does not want to encounter any unexpected expenses when something breaks soon after moving in.  Imagine, you move into your dream home and awaken to a broken heating or air conditioning unit.  A Home Warranty can cover many of those main appliances, and lessen the worry of the new homeowner.

Several Types Of Coverage

A Buyer Conversion Warranty is purchased by the Seller, and transferred to the Buyer on the day of the closing. These can help motivate a Buyer to purchase one home over another.  A Buyer may also purchase what is referred to as A Buyer Direct Home Warranty.  Buyers, or the Buyer’s Real Estate Agent can purchase this at the closing, and it too becomes effective on that day. It may also be purchased up to 90 days after the closing depending on the Home Warranty Company’s guidelines.  Most Home Warranty’s are effective for one year, and are renewable.

Real Estate Agent’s are taught about Home Warranty’s in their Pre-Licensing and continuing education requirements, to stay knowledgeable about the Home Warranty process. The Team at Elevate Realty in Texas uses the Home Warranty quite often as incentives to their Buyer’s and Seller’s.  Real Estate Agent’s are well versed on the different Home Warranty products available.

The Seller Home Warranty  covers the property during the listing.  The seller benefits from the coverage of items that may require costly repairs during the listing period.  Since this type of Warranty is in effect for the Seller, after the Buyer Inspections, many of the items found deficient could be covered for a mere service call fee. This plan can be transferred to the Buyer at the closing also.

Cost Of A Home Warranty

The cost of a Home Warranty varies according to your location, your property and the level of coverage you choose. Basic coverage starts at about $350 and can cost up to $600, give or take,  for more comprehensive plans.  Whether you choose to cover appliances or major systems (like your HVAC system) or both, will determine the cost of your plan.  You can add extras if needed, such as a swimming pool, and/or additional appliances.  There are Service Fee’s that are not included in your annual premium depending on the company, and the type of coverage that you choose. These fees typically range from an average of $60 to $100 per service call.

Covered Items

An important consideration when choosing a Home Warranty is what is covered, and what is not. Be aware that all plans do not cover all appliances and systems. For example, your heating system could be covered, but not your air conditioning unit. Find the plan that best fits your needs.

Denied Claims

A Home Warranty may not pay repair costs for all covered appliances and systems. There are circumstances under which the Home Warranty company can deny a claim.  Improper installation or maintenance, unusual wear and tear, and code violations are examples of what may not be covered.

How To Call For A Service Provider

You must call your Home Warranty company when you need service.  If you call a service technician on your own, they may not be a provider for that specific Home Warranty company and the work would not be covered.

 

Get The Best Customer Service

As with any business, check the Home Warranty company’s reputation.  Look for complaints filed against that company for unpaid claims, and check with the Better Business Bureau.  Always go with a reputable Home Warranty company, and be clear on their coverage guidelines.

Top Three Home Warranty Companies for 2017

According to Consumer Affairs 2017 Report on the 20 top Home Warranty Companies, American Home Shield is topping the list at Number 1. Choice Home Warranty and First American Home Warranty come in at second and third.  You can find a complete list of the top 20 Home Warranty Companies on the Consumer Affairs website.

2016 Fourth Quarter Gains In Existing Home Sales

2016 Fourth Quarter Gains In Existing Home Sales

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Home Sales Are Ticking Up

The National Association of Realtors® shows the fourth quarter of 2016 showed an up tick in home sales across the United States. It is expected to slow down some during the winter months, but if this is a sign of things to come in 2017, we are in for a good year.  Real Estate Agents, Lenders, Home Sellers and Home Buyers are all keeping a hopeful, and watchful eye that this trend will continue going forward.

National Increase By Region

Southern Regions

Existing-home sales in the South rose by 2.6 percent in the fourth quarter and are 5.4 percent higher than the fourth quarter of 2015. The median existing single-family home price in the South was $210,500 in the fourth quarter, 7.9 percent above a year earlier. Picayune, MS is seeing this rise in existing home sales, as well as other cities across the south. Real Estate Agents in Picayune, MS report that their phones haven’t stopped ringing heading into 2017 as well.  New Orleans, LA has also seen tremendous growth in their existing home sales.  The Lakeview area of New Orleans has surpassed other metro areas within the city, with some of the strongest gains in the country.

The Rest of The Nation

Existing-home sales in the Northeast had gains of 10.5 percent, the Midwest boasts existing-home sales climbed 2.3 percent, and in the West sales gained by 1.6 percent in the fourth quarter. With the Northeast showing the largest gains, we must keep in mind that sales in places like the South had not dropped off as drastically as other part of the nation during the mortgage meltdown, so the South did not have as far to climb back up. The United States (U.S.) subprime mortgage crisis was a nationwide banking emergency that contributed to the U.S. recession of December 2007 – June 2009.

What Does This Mean To Sellers

You sometimes hear this is a “Buyers Market” or this is a “Sellers Market”, I believe it can be the best of both worlds, and the data of the last fourth quarter proves it. If you are wanting to list your home for sale, there are plenty of buyers out there. If you are in the market to buy a home, there is plenty of inventory to choose from.

Be Prepared When You Are Ready To Buy

Those looking to purchase a home in 2017 will benefit from more inventory to choose from. This increase in inventory creates a balance in the housing market.

This shift in supply and demand, to a more balanced market, will give home buyers more options and opportunity to negotiate for the purchase of their dream home. No longer will buyers of existing homes for sale have to settle.

Do your homework on what price home you can afford.  Keep in mind your expenses outside of what a lender may consider, so that you have a comfortable mortgage payment for you and your family.

Get pre-approved with a reputable lender after you decide a comfortable monthly payment, and have on hand your supporting documentation such as pay stubs, bank statements and identification.

Always remember not to make any large purchases prior to applying for your home loan.  Your lender can guide you on what you should, and should not do that may affect your credit.