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Where is the Condo Inventory in New Orleans ? The supply has Dwindled and the Demand is Steady

     The New Orleans Condo Market is doing well but not great.  One of the reasons is lack of supply of nice condos that meet the needs of the buyers in the market.  When you take out the condos that are over priced and have too many negatives there are not many nice units left.  Each week I expect to see more listing and they do not come.

    I have had several new contacts this week of people wanting to purchase.  Once I run their criteria in terms of price range, specific area, bedrooms, parking, and amenities they are lucky to have 3 nice things to look at.  This is not the norm.  Interest rates are at 3.5% and less so the demand is there but supply is trailing.

    I have had two clients that want to live in the Federal Fibre Mills that are friends of past clients.  There is nothing on the market.  There are 140 units in the complex.  I cannot remember a time when there were no units for sale.  There is only one unit for sale at the Cotton Mills less than $200,000. I had a listing that lasted three weeks and sold last week at the Cotton Mills.  This is a great place to be for under 200k.

    This is holding true in the French Quarter as well.  We tour the new listing in the French Quarter every Tuesday as agents to get a preview of new listings.  There has only been a handful in the last month.  We generally get free lunch as we tour. That is gone now.

    The Warehouse District, French Quarter, Garden District, Lower Garden District and Uptown are seeing the same shortage of inventory.  Even the suburban market of Metairie, Harahan, River Ridge are showing less new listings.  I can now count more ferns on the photo below that I can with most requests that I get.

Fern City in the New Orleans French Quarter

       The one area where there is a reasonable supply is in New Orleans in the lower price ranges.  This is where you would think the opposite would be true.  I am showing a client tomorrow some units under 160k and we have 5-6 decent choices.  They are looking for a weekend place in Uptown New Orleans which is a trend.  People are expanding their search when they know more about the City of New Orleans.

     Best approach with current clients is to put them on a watch list based on their criteria so they they can see new listing, under contract status  and sales.  They can see them daily or several times per week.  I still tell them we should look at the complexes where you would expect condos to come up for sale so they can better make a selection when one does come up for sale.  This is easier in areas that have larger condo associations.  Much harder in the French Quarter, Garden District, and Lower Garden District where the condo associations tend to be smaller.

     The best solution is this case is to let clients look at sales over the past year to get an idea of what the condos looked like and what the prices were.  The prices are trending upward to a degree but appraisers look in the rear view mirror to figure out the present value.  You get a lot of inexperience on this end as the comps are fewer and the appraisers come from all over and are not as familiar with the market segments as they should be.

    The cause of the shortage is a little harder to figure out.  One reason is that few new condos have been developed in several years.  Many people are getting very good rents and have opted not to sell at this time.  Some of the possible listings are being rented for good returns while the owners may not be able to get all their money back today.  Add in the increased demand and you see inventory moving quicker. 

    The peak of the New Orleans Market seemed to be in 2007 while prices did drop up to 10% in 2008-2009.  We are getting back to those prices once again where people can now sell and break even.  its hard to tell the future but it looks so much better than it did a year ago.  The housing market was getting better then.  I figured out the condo market follows the housing market with a delay for whatever reason.

Warehouse District Profile 

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Eric Bouler Realtor
Gardner Realtors
Metairie - New Orleans, La. USA