The inventory is selling and a buyers choices are somewhat limited in 2012. This is a drastic change from this time last year. In the last month I have sold 4-5 condos as soon as the buyers saw them. In the last week I have seen 5-6 sell within the first week they were on the market. Some seemed to be good buys and others not so good. They Sold Quickly…..
1. The interest rates are still very good. At around 4% for a 30 year fixed. A client of mine got 3.25% today for a 15 year loan. People are feeling better about the economy and New Orleans. There is a general feeling that the rates will not stay this low once we get to 2013.
2. The condo foreclosures in this market are far and few between. I can count the nice ones on one hand over the last 18 months. This part of the business in New Orleans Condos never amounted to more that 3-4% of the business and they sell within days of hitting the market.
3. Many of the buyers are buying second homes as they find New Orleans a great place to visit and be for more extended periods than in the past. Many have plans to stay longer and longer if their jobs permit. Many are not anchored to a location where they can work. This is a new factor that was rarely seen a couple of years ago.
4. The condo sales have followed the the housing sales. The New Orleans proper real estate market started improve last Spring. The delay for condos was 6-9 months before it really started improving like a rocket…..This housing huge as people who cannot get into a house will settle for a condo based on price.
5. Few new projects have been created in the past 4-5 years since Katrina. Developers are thinking about it again. The lenders have created problems for not wanting to finance new projects, basically Fannie Mae does not want to finance new condo projects. They are behind the curve or at least in New Orleans.
6. Many of the sales are cash sales which mean these buyers do not have to stress over notes or face issues with lending. Many others put 30, 40, 50% down with plans to pay them off in the coming years. This is a great sign for the future. New Orleans had a good number but this year 30-50% of my sales fall into this category.
Its not however happening in all areas of New Orleans. This dramatic uptick is in The French Quarter, Warehouse District, Lower Garden District, and Uptown. Some the other areas will come in to play as a cheaper alternative. It will just take time to spread. Its tough to fight the trends unless you can figure out the next trend. I think I may know the answer…….The outlook is Sunny for New Orleans.