New Orleans Housing Market Trends and Forecast for 2024 – Norada Real Estate Investments

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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.

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.


Buy/sell, rent/lease residential &
commercials real estate properties.

How is the New Orleans housing market doing currently?

According to data from Redfin, in December 2023, the New Orleans housing market experienced a notable shift with home prices decreasing by 10.0% compared to the previous year. The median sale price for homes in New Orleans now stands at $297,000.

On average, homes are spending 93 days on the market, a significant increase from 43 days the previous year. Despite this, the market is described as not very competitive. Homes, on average, sell for about 5% below the list price and go pending in around 93 days.

When comparing nearby cities, New Orleans maintains its low competitiveness, with average homes selling for about 4% below list price and going pending in approximately 76 days. The sale-to-list price ratio for all home types in New Orleans is 95.3%.

New Orleans Migration & Relocation Trends

Examining migration trends, approximately 0.41% of homebuyers nationwide expressed an interest in moving to New Orleans from outside metros. Los Angeles, New York, and San Francisco are the top metros contributing to this inbound movement. On the outbound side, Gulfport, Destin, and Asheville are the most popular destinations for individuals leaving New Orleans. It’s essential to note that this data does not reflect actual moves but is based on user searches on Redfin.com.

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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

The forecast indicates potential negative changes, but the market’s resilience will play a crucial role in determining if it will face a significant crash. According to Zillow, as of December 31, 2023, the average home value in New Orleans stands at $244,755, reflecting an 8.0% decrease over the past year. Homes are taking approximately 61 days to go pending, indicating a dynamic market.

  • For Sale Inventory (December 31, 2023): 2,002
  • New Listings (December 31, 2023): 270
  • Median Sale to List Ratio (November 30, 2023): 0.961
  • Median Sale Price (November 30, 2023): $295,000
  • Median List Price (December 31, 2023): $351,167
  • Percent of Sales Over List Price (November 30, 2023): 8.7%
  • Percent of Sales Under List Price (November 30, 2023): 77.4%

New Orleans MSA Housing Forecast

In terms of the Metropolitan Statistical Area (MSA) forecast for New Orleans in 2023 and 2024, the projections indicate a -0.7% change by January 31, 2024, a -1% change by March 31, 2024, and a more substantial -2.2% change by December 31, 2024. These figures highlight a potential decline in the housing market over the specified period.

The New Orleans Metropolitan Statistical Area (MSA) encompasses various counties within the state of Louisiana. It plays a pivotal role in the regional economy and is a key indicator of the housing market’s health. The housing market’s size is substantial, with diverse factors influencing its dynamics.

Is It a Buyer’s or Seller’s Housing Market?

The current data suggests a market favoring buyers, with a notable 8.7% of sales occurring below the list price, indicating potential opportunities for buyers. The average home value in New Orleans has experienced an 8.0% decline over the past year, signaling a downward trend in prices. With home prices experiencing a decline and a buyer-friendly market, now might be an opportune time for prospective buyers to consider making a purchase.

New Orleans Housing Market Forecast for 2024
Source: Zillow

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).


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

This post was originally published on 3rd party site mentioned on the title of this site

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