Archive for the 'Buyers Agent' Category
The prices are on an upward trend and are getting back to the levels of 2007 when business was last booming. The big difference is that there is just not a lot of things for sale. There are currently 25 active listings in the Warehouse District of New Orleans. Out of the 25 listings there are 7 listings at 1201 Canal which I really do not consider the Warehouse District.The prices range from 169k to over a million. So choices are limited in all categories. There are 20 condos under contract.
I had several listings last month and they all sold within a week of getting people in the units. If a seller prices them correctly they can get a sale in short order. You still have to have what people want. There a a large demand for 2/2 units that are selling for up to 400k.
Several of the reasons for the demand is that few new places have come on the market since 2008. The second home market is doing extremely well and those buyers are ready to buy when things do come on the market. The odd thing about most of my second home buyers is that they live rather close by in places like Baton Rouge, Lafayette, Kenner, Mandeville and other local towns and cities. This was not the case three years ago.
Many of the second home buyers pay cash or put down large amounts towards the purchase. People still ask about foreclosures but they are few and far between. Those that will pop up have been in the process for years. Then you add to the buyers those that are renting and want to buy with the low rates you have some increased demand.
The Warehouse District is also a favorite place for medical students, residents and law students. Many are not selling when they finish but decide to rent or use their condo as a second home. The demand will increase in that area with the completion of the new VA and LSU hospitals which are under construction.
I have pictured these buildings which are not yet condos. The area of expansion is going to be the areas in the CBD and towards the Super Dome. The construction or conversion of rental units have greatly increased in this area. Once that happens its will be like a ball rolling down a steep hill. Blocks away from the French Quarter where you get larger more updated units for less money and you will have access to parking.
That is what I am predicting is going to happen. The areas just tend to spread out as prices and available space become available….I have had no problems with financing as long as people stay local and use lenders that we know will give you the best deals and get the job done. Out of State Lenders are stressful and much less successful. Add in the large out of state banks to that number. I will not mention names but all Realtors know them… Ask them who is most successful. I never mind saying….Stay away from XXXXXX Brand…
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One thing is pretty clear as we enter the new year in 2013 is that buyer have to act much quicker than they did in 2012. There are fewer properties for sale and more eager buyers. If the condo is nice and is priced right then it will sell quickly. That is why doing your homework is so important in a market like this. Rates are 3.5% and rents are getting higher so now may be a good time to start.
It’s foggy in Jackson Square but its clear to myself and many buyers that decisions have to be make faster these days. You just need to be clear on what you are looking for, have a good idea of financing, and be ready to look when I call you. It’s Like that saying…”You Snooze you Lose“…
Being Prepared in this market means we have to do our homework as we beginning our search.
1. Have a good idea by contacting a qualified lender who can make the process happen and give you the best advice on terms, type of loan, downpayment, taxes, insurance and expenses of that loan. This will give you an idea of your note and cost. They should be able to have you a qualifying letter when we present the offer so you are in a better position to obtain an accepted offer.
I have had only one loan for my buyers in the last 100 sales not go through. My client was using an out of town lender that someone had advised him to use. It cost him time and money to find out that he could not qualify. It cost the seller selling time and he ended up with a lower price. Sometimes it is odd how it works out. I sold that condo to another client that got a great deal. I am currently selling the same client another condo a year later and he is using a capable lender that I would recommend to anyone.
2. Study the market by seeing the complexes so you can know what will suit your needs. Recently I am showing units in various complexes so the people can get an idea of the complex so when one does come up they will be ready. Its OK to see overpriced units as it will still give you a good idea of the buildings and units. I then send the clients all the sales from 2012 that will match what they are looking for. The last couple of time I have done this, its been about 10-12 units at most. Sometimes its much fewer as clients add more criteria.
You do not have to depend on the library for your information as your real estate agent should be able to send you all the information that you need. You can use the Internet to find out a lot of good information on your own that is very valuable.
You put that together with a capable real estate agent and experienced New Orleans lender then you are ahead of the game and can expect much smoother sailing. I know the lenders who can get it done as you may use 3-4 different ones in a year depending on your situation.
Just stay away from large banks and out of town lenders as they know little about the New Orleans Market and take much too long to process a loan. Louisiana may be backwards in some areas but this is not one of them…..Lets just say its a very competitive market these days for agents that work for purchasers. Let get stated by sitting down and going over the process….
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Its only natural for purchasers to look at the areas of New Orleans that they know the most about. A lot of time people will change their minds and look at other areas of town once they become educated as to what they will find. There are some who will not change their mind and keep looking in the area where they had their heart set on being.
One of the best examples is that many second home purchasers start in the New Orleans French Quarter. Its a great place to start but prices are high for what you get and parking is harder than most areas. A certain percentage of these buyers once exposed to the Warehouse District will consider that area as well. Its across Canal Street and they may find a condo more to their liking.
Many second home buyers start with the one area in mind. Once exposed to multiple areas they go where the better buys happen to be. Some start in the New Orleans Warehouse District and see they cannot get something that matches their budget and desires. They go Uptown, Garden District and in the Lower Garden District Condos to see what is available at lower prices.
I tend to call this a natural affordability progression of neighborhoods. The areas on the edge of the more popular neighborhoods tend to develop this way as people are priced out of a certain areas. In addition to pricing they become more educated to the various choices of New Orleans Condos. This makes the edge area expand out until it meets the more popular areas again. This happens in homes as well, the the condo market follows. Condos on Saint Charles Ave. in New Orleans is another area where buyers may start or end up.
This does not happen to everyone but to at least half of my clients. Many think about it and become open to other areas. In some ways we come a tour guide in order for the client to get the extra exposure. Its part of the job and tends to be fun…Our job is to expose clients to areas they may not have considered as they just did not have enough information to know. Doing this everyday I tend to know what you will find in each of the New Orleans Condo Marget Segments and Neighborhoods.
The buyers that can spot these trends often get a condo thaat appreciates more as the area becomes Hot. Once the trends are more evident then the prices tend to rise. It just takes experience and time to watch these trneds develope. You however cannot make a trend where there is not one.
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The New Orleans Condo market has had the best run in 2012 this year since 2007. Things that are priced correctly are selling fairly well. The demand is there for most condos. The selection is much smaller than I can ever remember it. The top of the market was in 2007 and we are getting back to those numbers except where some buyers overpaid.
Sellers must be thinking that since the inventory is low that they are price above the market and attract an offer. This is rarely the case these days as buyers know the numbers and their agents do as well after having a rather flat market since 2010.
They look at the past sales and must be discarding most of them. They are more likely picking the one that makes there case while disregarding the others. The other thing that some sellers are doing is looking at the things that have not sold yet and justifying their price off of those competitors. Its like ” Fools Gold” as the appraisers are not interested in things that have not sold. They base their appraisals on the past sales only.
The sellers that over priced miss the pool of buyers that are ready to buy. They look and know the prices. The condo becomes stale at some point as the sellers then know that the price was too high in the beginning or that they needed to improve the unit to make it more attractive. There are those lingering on the market as well. The “Best Buyers are the First Ones”
Buyers will eventually purchase those at a bigger discount because the unit has gone stale. This is just normal when a seller lists too high. The Process repeats year after year. I am guilty of pricing some things on the high side thinking I will get the owner to come down to reality. If they are not looking at the numbers then the property will sit for much longer and the seller will end up with less. They will also have more expenses as nothing good happens to an empty unit. The bills keep coming.
Not all condos are equal so there is always going to be a segment that is slow. This year it is the condos that have the 1970′s feel of an apartment complex. I think one of the large reasons is that second home buyers want that “New Orleans Feel” and they are a large segment of the market.
I have sold a lot this year the first week the condo has been on the market as it was priced right and I was able to review the prices with my clients before we started looking. Many will do it on their own as there is a lot of info on line. Experienced agents now dominate the market as all the “Would Be Agents” have dropped out over the last several years. Tough times make you better….
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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.
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.
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The value of having an HO6, “Condo Insurance” for your New Orleans Condo is Important-Just ask Issac..
Issac was the recent Hurricane that swept through New Orleans last week. The tropical winds lasted about 36 hours and dumped about 10 inches of rain. I know first hand of two condo associations in the Warehouse District that has damages to the roof and in came the water.
You would first think that the condo association’s insurance would cover all the damage. The problem here is that the deductibles for wind and hail are high and may not kick in until $100,000 to $200,000 of damage has occurred. Even then it will not cover possessions and build-outs in the condos. So the condo association has to dig into reserves to cover the roof and other damage that may have occurred.
All lenders now require the condo buyer to have an HO6 policy just in case this happens. It happened last week to about a dozen owners that I know of. They generally require a 40-20 policy or more depending upon the condo and its value. The 40k is for things like floors, cabinets, and appliances. The 20k is for possessions. The deductibles are lower than the master policy. The lender will have a formula for what you need.
The HO6 policy cost about $700 to a $1,000 per year. Cash buyers are not required to get the insurance but they need to have to policy for peace of mind. It is not a common occurrence but it does happen and with first hand knowledge you had better get a policy and upgrade it from time to time.
Both instances centered around the roof leaking. Many of the roofs in the Warehouse District are flat and that seem to be where most of the problems do occur. But not always. I know of one several years ago where a water pipe burst after a transformer exploded. The shock busted the water pipe and after 10 minutes of running it left several units damaged. It does not take a busted pipe long to ruin things. This does not happen often but it does happen…..
So if you do not have your own condo insurance policy, then you need to get one or roll the dice. If you have one it may be time to review it and check it out.
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August 19th, 2012 categories: Buyers Agent
Starting your New Orleans Condo searchis much like window shopping except most shopping begins on the Internet for most buyers in today’s Real Estate Market. The Internet search will give you the price, location and a few photos. Some better than others. Its the best way to window shop to get ideas of what is on the market.
Once you have done your window shopping you will know when its time to get serious about your purchase. You will need more than what you see on the Internet. You will start looking for an experienced agent…There are always things we need to know in order to get you started.
Questions an Agent will Ask
Know a price range of the condo that you want to purchase. Know how you will finance the purchase and what type of financing that you will be getting. You will than know the numbers so you can better shop for the right place. Its always better to use a local lender. It cost no more and the job will get done in a timely fashion. It will be cheaper as well. Successful agents know who does the best job and who can do the type of loan that you will need. If you are a cash buyer this part is not needed but you do want to know that the condo complex has future issues when you go to sell.
Know the location where you would like to be. You have to have an open mind about other locations as the New Orleans Real Estate landscape has been a moving target the last several years. Many clients start in one area and end up buying in another area because they get more for the money. Buyers discover other neighborhoods in New Orleans. The City of New Orleans has always been a city of distinct neighborhoods dating back to the 1800′s.
Begin to think about the style of New Orleans condo that you would like to purchase. Is the conod complex where you have a number of amenties and a manager. Is it a Warehouse style condo like you find in the New Orleans Warehouse District. Is it a part of a historic home that has been divided up into condos like you find in the Garden District, Lower Garden District or Uptown New Orleans. Is it a condo on St. Charles Ave that is more like an apartment built in the 1920′s or a condo from the 1970′s. The internet is a great help to learn what one likes.
When do you want to purchase is the last question. Looking 3 months in advance is ideal time period to get started. If you are a 6 months to a year away, almost everything nice that you see today will be gone by then. In this case I can begin to send you the new listing and we can talk about what you are looking for in a primary residence, second home, or investment property.
You can use any number of real estate searches that are on line. Some are better than others. Feel free to use my Nola Home Search Site where you can save your searches. You can ask me to set up some basic parameters where you will receive regular e-mail updates on a regular basis as new listings are added to the New Orleans MLS.
You can see where condos are being reduced in price and fall into your price range. It will also show you when a condo is sold or goes under contract. You will also have a mapping feature and no one will call you to ask for business. Many of the oter real estate sites are just created to sell leads to agents and real estate companies. They are paying to play. You have no idea if you are getting a knowledgeable or experienced agent. All agents are not equal in their knowledge of the New Orleans Condo market.
The best thing about looking is that I will know in most cases if the condo is not a good buy, in an unsafe area, is just way overpriced, or that the building just needs too much work. I can always get you down to 5 good choices or less once I know what you are looking for and answer the above questions for me. It may take some time or a great deal may just pop up where you have to act quickly. I try to see as many new listings each week as I can by going on a property tour or when I am showing clients. When you have sold several hundred you tend to know what to expect.
I too am often surprised so we look at those that look good or ones that I have not seen in several years. I still enjoy looking and I know you will also. That in a few paragraphs is the way to start your search. Then I jump start the process whne I receive your all.
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First Time Buyers are in the Market Again ! Maybe a condo is the best way to start…in the New Oreans Real Estate Market
We are beginning to see an increased interest in first time buyers coming into the housing market. Some of these buyers want a home and some may want a condo as it is generally more carefree and less expensive than a home. The cost is just a lot less than owning a home in most cases.
A new buyer can get into the neighborhood where they would like to be with a much lower price tag than a home. These are the areas where condo sales have been best. Its only natural for people to gravitate to demand areas. Its all about location and the life style that that location offers.
The interest rates are below 4% at the present time. I got quoted a rate today from my favorite lender where your principal and interest is $442.10 if you borrowed a $100,000. Borrow $200,000 then you double that and you are at $884.20. These are fantastic rates and rival any in the last 40 years. You just pay your equity down much faster. Add in the interest deduction on your income taxes and its just a winner.
The other item many first time buyers overlook is the cost of ownership of a home versus a condo. The insurance cost is becoming a larger and larger factor in owning a home. I am working with two new buyers on a home and their flood and home owners insurance is going to be $2400 a year for a home around $140,000. Its close to $200 a month. Then you have to pay for water and utilities. The exterior upkeep with time or money. This is going to average at least 200-250 per month over the term of ownership if nothing major goes wrong.
When buying a condo the insurances are in your condo fees. The water, exterior maintaince, upkeep of the property are in your condo fees. The fees for a 140k condo are generally less than $250 per month. In Jefferson that number can be less than $200 per month. Many condos include the Internet, cable, gyms, pools, courtyards, and management fees in your monthly condo bill. The amenities do matter if you are on the go and need to concentrate on your work while not over paying for a place to live.
In the end your cost could be as much as 50% less owning a condo over a home in the same price range. This is because in a condo you are part of the condo association where these cost are less because they are shared among all the owners. You do have to pay for an HO6 policy for the interior of your unit plus contents. This will run $700-$800 per year.
Its a lot of numbers to digest. Once digested this may be a good move. The condos will generally be smaller than a home but much more updated in terms of applainces, kitchens, baths ect. Most have been recently redone in the last 10 years.
Then the last thing but not the least is that there is no more rent to pay to someone else. You are basically renting from yourself. Paying $1500 per month is $36,000 for two years and you will never see that money again.
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I listed this condo for in the New Orleans Warehouse District for $429,909 that I had listed several years ago that we had to end up renting as the market was soft and few lookers. I just listed it again on Monday of this and already have 5 agents wanting to see it this week. . What does this say about the New Orleans Condo Market…… This one is located at 909 Lafayette Street #9. Will have more on this one later…..
The demand is up in most areas if the condos are priced correctly. Not many will over pay and buyers are doing their homework in an ever greater degree that in the past. The nice things in the 200k-350k range are selling rather quickly.
The ” Premium New Orleans Condos” that I call the ones that have many positives and few negatives are the best buys. People will pay for what they want. These are the condos that will sell quicker and actually appreciate faster. The so called ” Good Buys” may not be that good. Its not all in the square footage price. There are always going to be pluses and minus factors on most units.
The Square footage numbers do not price into account correctly many factors that other areas may not have. The views, parking, common areas, ceiling heights, quality of updates, balconies, front units, porches, large windows, natural light, floor plans, historic feel, exposed brick flooring are all factors that are hard to calculate….But they can be compared to other like units. This is where a good realtor can give you guidance. My thoughts always think about the resale value.
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Many residents or young doctors decide on a condo as a first step in deciding where to live. The program offered by Patterson State Bank is very hard to beat. I do not know all the details but Barbara Deichmann will know all the answers 504-616-8067. She said it is very easy as all the loans are approved in house and the loans stay at the bank. I have known her for years so she is no fly by night lender.
Its a great deal for New Orleans residents at any of the local hospitals where you may be heading. Best to call Barbara to get all the details about the New Orleans Doctor Loans for 2012.
I just found out about this as I sell condos to doctors all the time and was looking for something like this. I have had bad experiences with the few out of town programs that I have been involved with. Never had an issue working with Barbara. An in house program allows for swift answers to you questions.
The rates are 3.3% with nothing down. Yes 100% financing. The term of the loan is 5 years amortised over 30 years. It is like a balloon note but they will work with you at the end of the term if you need more time. You can get the loan now even though you are starting in July. Lets get you settled now with the loan and then I can find you the best possible condo that I can.
Some Quick Facts on the Numbers
Renting for 4 years at $1200 pr month is $57,600 and that goes to your landlord never to be seen by you again.
Borrow $200,000 and your principle and Interest is $875.91 per month. You will have condo fees and taxes to add to this. The total outlay will most likely not be much more than the $1200 in rent.
Your reduction in principle or your equity after 4 years is $16,698.66. The number increase monthly. You can deduction the interest as a home owner to the tune of $25,345.02 over the four years. Let Uncle Sam help you out now as you will certainly help him out later. This really lowers your out of pocket expenses by almost $400 per month.
If your condo goes up in price by 1% you will gain $2000 in one year. Prices are trending up in New Orleans and the total appreciation can easily be $10,000 over the 4 year period. People I sold the last 2 years are up in almost all cases. I do not expect to have the down trend that we had in 2008-2009 period.
So its worth calling Barbara at Patterson State Bank 504-616-8067. And call Eric for the condo or home ideas. I have some starting as low as $109,000 with an easy ride to most all places where you would be. That is $477.37 per month on the principal and interest with condo fees of $152 per month. Your total cost will come in under $800 per month for a new place.
To make this picture become clearer just ask questions and get some answers. This is what we do well. Its a big decision but we can make it a little easier for you and it can be cheaper than renting.
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