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. 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.
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.