Archive for the 'Buyers Agent' Category
September 10th, 2015 categories: Buyers Agent
Warehouse District Condo Trends
The Prices in the New Orleans Warehouse District Condo Market are up at least 20% over the last 24 months. The demand is up sharply and the supply is down. When this does happen you will find certain sellers over pricing their units. When they come down they sell quickly. In good or slow markets its always advised to price your condo correctly to sell.
One of the big reasons for the increase is that second homers are driving the market. Many of these buyers are cash buyers. They know what the want and will pay for it when it comes on the market. We are seeing fewer people buying to live in the condo full time as the prices are getting higher. Many working people are renting until they decide what they are going to do.
The really interesting factor in sales is that many of the second homers are from places like Baton Rouge, Lafayette, Houma and the North Shore. They enjoy coming to town for the football games, basketball games, Mardi Gras, Festivals, Harrah’s a chance to get away. The two bedroom units are in demand as they like to have friends and relatives come with them to visit.
We are still seeing parents buying second homes and letting their kids live in the condo while they are going to local colleges and Medical schools. As the prices have moved higher, many people are looking are areas close by as the prices are cheaper. The other areas are still close to town. Everyone likes an area that is walkable and near things they like to do. You can walk to the French Quarter which people still love to do.
You see new shops, eating establishments, bars opening in the Warehouse District as the number of rental units has exploded over the past three years. I think in the near future many of these renters will look to purchase as well.
Many owners who would once have sold their condos have decided to rent them out rather than sell. I see this trend peaking as prices rise and more and more rentals are added to the market. The Movie Business has been a big plus to rentals. It also has introduced more people to New Orleans and a number of those people turn into purchasers.
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You will have a lot of choices when you start your New Orleans Condo Search and the first criteria that an agent needs to know is a price range. This will help narrow the field real quick. Try to stay in a reasonable range but see if you are will ing to pay more for the right thing or pay less by changing you other criteria.
Cash Buyer have a much easier time as they have the money. If you are needing a loan then a local lender is where to start. Make sure all the operations are going to be in one place. It is so much easier if the team is local. They can give the numbers based on your down payment and ability to borrow. You will need to figure in Property Taxes, Condo Insurance, Condo Fees and Closing cost. A good lender can give that number to you fairly quick.
They will also help you find the best possible Loan Type and the required downpayment that you will need for each. Second Home is 20% Down, Primary Residencce is 10% to get best deal, and 25% for investment property. Few condos will be FHA approved but there are a few.
The lender will also tell you all the documents you will need in order to make the loan. Thye will run a credit check on you to see what your credit score is. Best to get this done while you are starting to seach as the numbers may change as you become more knowledgable about the process. Mnay time sellers will want a pre-approval letter with an offer.
Once you are comfortable with the price range we can go to the next step which is just as important. Where do you want to purchase. That will be Part Two.
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I am selling a lot of condos that are being used as second homes in all areas of town. This year half my condo sales are from second home buyers. A few are from out of state but many are from nearby cities such as Baton Rouge, Mandeville, Covington, Slidell, Lafayette, Houma, Mobile, and Jackson. Its an easy drive to New Orleans.
They all have some connection to New Orleans. Many have grown kids and it will be like a family home in New Orleans. A condo is ideal when you are not going to be in town every week.
Most are looking for something move in ready where little has to be done. Its going to be a fun thing so few want to spend the time and money updating. Most of the things I am showing have all been in great shape.
Many are looking for two bedroom so they can have family and friends visit them. Others are looking for that New Orleans feel where they can park the car and enjoy a weekend of walking, eating, shopping, and the enjoyment of a city filled with things to do within a few miles or a short street car ride away. It is never hard to have a reason to come.
A lot of the sales are cash. You will need 20% down for a second home so most of the buyers are very stable with good earning with money to spend on each visit.
Uptown Condo Market is Moving
Today’s Buyers want something that looks like it belongs in New Orleans. These conversions are becoming more popular and can be found all over the Uptown New Orleans Area. The Warehouse District and French Quarter is still a demand area but more and more people are looking in the Lower Garden District, Garden District and Uptown.
The prices are better. Everything is still very close and you just get more for you money in terms of space, parking and price. You can take the streetcar to the French Quarter and you are always close to St. Charles, Magazine where there is always a lot of activity.
Part of the demand is because the housing market is doing so well in the area. Condos do follow the trend as beginning Homes are getting very hard to find in the 400k range. So condos make a lot of sense for the second home market in this area.
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The French Quarter Condo market has shown some brisk sales through June. Now we are seeing a drop in sales that has a lot to do with the weather and people coming to town. Its just flat out hot. The well priced units that are nice are selling rather briskly however.
There are currently 58 active listings with 14 units under contract. There are 8 units below 200k and 14 above the 500k level. The 58 may seem like a lot but once you take out the units that are overpriced and not in demand the levels do fall to a hand full in each criteria. We are seeing reductions as we move into the August months where sales tend to slow every year.
We need to remember than most of the condos are second homes so those shoppers are fewer this time of year. The interest rates are still good and a lot of local lenders are ready to loan. The prices are up over last year as is the demand for the right thing.
Most second home shoppers do not want to do a lot of updating when they purchase. They are not here to oversee the work. The harder units to see are the 3rd floor walk ups and units that are ultra small. These just hang around longer.
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Its been a strange year for sales in the Warehouse District of New Orleans. There have been fewer sales of late than normal. This is because there is not much in the way of condos that are priced to sell. Here are the numbers. There are 16 active listing today with 22 under contact. I would suspect most of those to close by the end of the month. I will say at least 8 of the 16 active listings are at priced at least 10% over the asking price. This means there is even less to chose from.
The extra demand has come from second home buyers who love to be in the area. It is just close to everything with new restaurants and retail stores opening monthly. You have to be ready to buy when you see something you like when you see it or it will sell when its priced right and is a nice place. Some are even selling before they hit the market by asking around the office as to “who has a client for this”
I am now having to suggest other great areas of New Orleans where they can find things just as nice where the prices are cheaper. The areas have many of the same things that people are looking for, they are just not as familiar with them as they are with the Warehouse District. After we take a tour most will see why and if the other areas suit their needs.
So you need to check out other areas that will surprise you as to what they have to offer. Looking down St. Charles Ave, Garden District, Lower Garden District and Uptown are the most ideal locations after the Warehouse District. The French Quarter may also be an option but the prices do go up quickly in this area. The French Quarter does not have its normal inventory either as the nicer priced condos are selling quickly.
Best thing to do is get on a watch list to show you what is on the market each day. It shows when it goes under contract, when the price is reduced, and whatever changes are made in the listing. I just set you up based on your criteria. Keeping updated is important and will save you money. As will a good buyers agent who does not mind telling you when something is too expensive. Best to get in your condo before the Saints football season starts on the way to the Super Bowl in the ” Big Apple”.
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The Market for second homes in New Orleans is as good as I can ever remember it since I got into real estate in the late 1990’s. There are few new projects on the drawing boards. There have not been any foreclosures in the last two years as the rental market is tight and places are easy to rent.
Oddly enough many of my clients for second homes live in Louisiana, Alabama and Mississippi. Lafayette, Baton Rouge, Mobile and Jackson is the most common towns that they hail from. This makes it even harder for people living further away as when something nice and priced right comes on the market it sells quickly. We can get the people living close to come down and look at the condo on day one. This is much harder for people living further away.
At one time the bulk of the second homes were centered in the French Quarter and along St. Charles Ave. This has changed and people are focusing on the French Quarter, Warehouse District, Garden District, Lower Garden District, Uptown New Orleans and adjacent areas. In areas that never flooded from Katrina as they are in older areas of town that were built on higher ground.
A sale that I have now sold the first day to one of my clients. They lived in Baton Rouge and was able to introduce them to the market and look at the most likely spots where listings would come up. We toured the complexes to give them some ideas. I then sent them the past sales from 2012 to date so they could see what they would get. I then set them up on a watch list to get the new listing each day that met their criteria. I could then answer there questions about the condos and if they were priced correctly. We did see a couple of overpriced units, but I knew they would come down in price as time moved on.
Then when the right one came along they were ready to purchase and had a good idea of what to offer. They were prepared to make an offer quickly. They just happened to be cash buyers which makes it easier. Borrowers will need to get their duck in a row and use a local lender by all means. We have seen too many deals not make it in a timely manner from out of town lenders or large banks. We are too happy to give you the best people that do deals in these locations all the time.
That is the way it has had to be done for the quality places that people are looking for. There will be more time if the place needs work, complex dated in need of repairs or is overpriced. These units will tend to stay on the market longer.
The result of a successful search is to be patience and the right thing will come up. Many times we here about new listings from our agent friends so we can get our clients some advance notice. It has helped me sell several listings quickly after I had them listed. It does help to be prepared and in the know as to what are going to be the future choices….
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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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