A Greek philosopher once said “change is the only constant” and that is certainly true when it comes to New Orleans real estate. That’s why I asked real estate professional Andrew Sheppard a few questions that might help buyers and sellers navigate this market.
What factors are driving the current real estate market, and how do they impact buyers and sellers?
Locally, the state of the current market is healthy overall but much more balanced than it has been in over a decade, with negotiating leverage having swung noticeably more towards the Buyers. Proper and professionally advised market entry pricing on new listings is crucial, with the margin for error much smaller now – basically pricing your home to sell with full recognition of the current market demand which has cooled significantly since the COVID-induced real estate boom of 2020 & 2021. Prices and values are down modestly, and Sellers chasing the real estate values of only 18-24 months ago is a mistake we’re seeing quite a bit which leads to increased time on the market and a buildup of inventory which only slags values down further.
Without question, the two factors affecting our local market the most significantly are the cost of borrowing conventional loan money which has tripled from the sub 3% days of 2021, affecting real estate values nationally, and accessibility to affordable, private homeowner’s insurance options which has been turned on its ear since hurricane Ida in 2021, affecting the New Orleans market and Gulf South specifically. Options to insure that are available are prohibitively expensive in many cases and for most Buyers, severely reduce the amount that they would be willing to pay for a home, given the substantial increase in monthly escrow contribution. Pair this with the rise and volatility of interest rates and it’s been a 1-2 punch to our local market over the last couple of years, that has lowered demand, raised inventory, and stagnated appreciation rates for most owners in the Metro area.
What advice do you have for homebuyers navigating the current market conditions?
Most importantly and in short – utilize professional representation. Especially in the current climate of higher interest rates, insurability challenges, and softer market conditions, no Buyer should go it alone when purchasing any real estate, especially their primary home. The processes involved in acquiring real estate from identifying and evaluating properties, to contract and repair negotiations, require experience and expertise to manage correctly and your interests will always be best served when using a local professional. In most cases, this is with no cost to the Buyer. The professional real estate agent community in New Orleans is extremely strong and very experienced – we are very good at what we do and are happy to help.
For sellers, what strategies are most effective for maximizing the sale price of their property in the current market?
Seeking out and employing a local real estate brokerage. There is no substitute for the counsel and guidance that a Seller gains from an experienced listing agent, which is even more paramount in an unpredictable and unsettled market. With a professional at the helm, the property will be presented and marketed polished, with professional photography/floor plans, staging in some cases, while using advanced marketing tools for maximum exposure. A property must be in its best light to stand out and capture an audience to produce an offer in the current market state.
But the most important strategy point in a word is pricing. New listings and additions to the open market will have more direct competition now than they have in many years. The goal is to sell and as quickly as possible. “Testing the waters” with a higher list price that the most current comparable data does not support will only rack up the days-on-market while wasting the marketing impact window of a new listing. Rely on your agent’s expertise to thread the pricing needle and price your home to sell!
Andrew Sheppard, Broker and Co-Owner with Crane Real Estate, a boutique real estate firm based in Mid-City, New Orleans. 20 years of real estate experience, a top producer in the New Orleans market for the last 10 years. www.cranebrokers.com.