Archive for the 'Market Trends' Category
Low Interest rates of 4.25% begin to bring more buyers into the market?
August 8th, 2010 categories: Market Trends
The interest rates are the lowest they have been since the 1950’s having hit 4.25% in the last couple of weeks. This is causing people who have been sitting on the sidelines to again think about buying as a primary residence or second home. Prices have actually been fairly steady with a slight downtrend in the last year for the better properties. More if the properties needed some work.
This means if you borrow 100k your principle and interest are $491.94 per month. You would add taxes and condo fees to this and you will get an idea of the total note. Do not forget the value of the tax deduction for interest. Do not forget in year one you actually reduce the principle by $1686 and this figures grows each month.
Second homes get this low rate as long as you have only one second home. There are no third homes as it then becomes investment property at a much higher rate. Second homes will require 20% down in all most all cases. You avoid PMI with 20% down and this is a huge savings.
Buying a condo as primary residence would mean putting 10% down. You can ask the seller to pay the majority of the closing cost if you want to preserve cash. This is more and more common in all transactions.
Two bedroom units have been the strength of the market year to date. I do see the one bedrooms making a comeback with the low rates in the very near future. These are the units that are currently some of the best buys. These are going to be your first time buyers and second home people that do not need a lot of room. Many sellers have had their units on the market all Summer and are ready to make a deal as the seasons change.
Condos that need updating are still out of favor as prices have not been adjusted for the things that need to be done. The majority of the sales have been in the premium units. Meaning you buy and almost nothing needs to be done except you own taste.
Sellers may be better to make their condos into premium units rather than reducing the price. This is working for me. Get all the things done before putting it on the market. Today’s market is a beauty contest with only best looking units winning the sales. The buyers today are very stern judges.
I have seen some of the nicer things having been sold in the last couple of weeks. They were their one day and gone the next. There are several good buys that I have seen and bet those will begin to vanish as well. The good news about the oil spill being capped is good news for everybody and the real estate market. Psychology of markets works like a clock as fewer people buy at the bottom but now may be the bottom.
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Staging Advice pays off big time ! Getting your New Orleans Condo in top shape is very important!
July 31st, 2010 categories: Market Trends, Selling your Condo, Warehouse District
I just had a young couple, Lauren and Taylor that called me to list their condo in the New Orleans Warehouse District at the Cotton Mill Condos. They had already called a stager-decorater to come give them advice on how to make the condo look better in the sales process. I got there before they started to unclutter and repaint a portion of the condo. I reviewed the plans and everything she said made a lot of sense. We added a few things then the sellers were ready to start their work. They wasted little time as you want the resign to be finished before the first buyer comes.
The owner of Bella Home Staging is Suzanne Gindy. Her expertice was in telling the sellers on the things they could do to make their condo sparkle in the buyer’s eyes. She charged for her time and advice. Her initial charge was only $100. The sellers did all the things she was asking for. Many will need a follow up visit but Lauren and Taylor did not need one. The basics were
- To rent a space to put the clutter. This makes the unit look larger and the focus is on the unit rather than the things in the condo.
- Do some accent painting and touch up work to make the condo fresh.
- Move the furniture around to show the best configuration for this particular condo. Put the right amount of art work on the walls.
- Decorating ideas that just made the place look more livable.
The focus here was on the wood floors, large windows and high ceilings as these is why people like the Cotton Mills as a place to live. You want the buyer to say ” I want to live here and can see myself settling in very quickly”.
The best thing about the this approach is that it works and pays big dividends if you follow the plan. Once Lauren and Taylor finished the makeover and cleared the clutter we were ready for out first showing. The very first buyer that looked at the unit make an offer and it was accepted. Rather than taking less and staying on the market for a much longer they followed the plan and it worked to perfection. The condo sold and both the buyers and sellers were happy.
Today’s market is such that you want to be in the top three of your class so people will consider your condo. The positives have to outweigh the negatives in the eyes of the buyers. There are fewer buyers so you have to feature the positives of the condo so you will be the best in your class. Many buyers will not see past a junkie place or one that is not ready for sale. It just takes more work.
Suzanne Gindy knows more than I do about the staging business so why not look for advice from one of the best. She has a variety of programs but this initial step is well worth the money. I fully support any effort to make a condo more ready to sell in a much shorter time frame. My job is to get people in the unit through marketing the condo in the best possible light. Working on a premium unit makes the photos, flyer’s, videos, Internet ads all look so much better. People start off looking at pictures and staging gives you some great photos. Its is very much like a beauty contest so looking and feeling best is the way to go !
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New Orleans Condo Trends for June! Bits and pieces of knowledge!
June 8th, 2010 categories: Market Trends, Selling your Condo
The market is odd for a couple of reasons. The most suprising is that you never seem to have more than 4 or 5 good choices in New Orleans when you consider all your criteria. There are not a lot of new units coming on the market but not a lot selling either. Buyers are looking for the premium units where nothing has to be done. They of course have to be priced right as well.
Sellers have to Stage and Update ! I recently listed a condo at the Cotton Mill Condos where the owners hired a young lady to give them tips and ideas to get their unit ready for sale. Some was painting and getting rid of the clutter. They followed her directions to a great degree.
It was time and effort but it worked. It sold within the week and I know this is why it did. Both units in their final choices were down this way. I was even surprised at the effectiveness and I do this every day.
Sellers have to slot their unit to be competitive ! This means knowing what your competition is and what the final choices are going to be before you list. You need to be slotted to be one of the best in that class. A seasoned agent that works the market can show you where you need to be. Selling a place is all about timing. Take the steps to make you unit compete like the Cotton Mill couple. This save time and make you money in the end.
Tax credit rush is over but interest rates are at 4.625% this week ! That means the cost of money is as cheap as it has been for 30 yeas or more. Borrow a 100k and you principal and Intersest is around $520. The tax credit di create a flurry of activity and many who would have bought in May and June pushed up their buying to April. Once the flurry ended there will be a lull.
The weakness is still in the one bedroom units. The weakness is in condos that need to be updated. The premium units are getting all the action as things have reached that lull. The Louisiana Oil Spill has not helped but may mean if you are buying the sellers may just say yes to a lower offer than they would have taken in April.
The photo above is in the New Orleans Warehouse District where a lot of renovations are being done. I can easily count 8-10 complete renovations in the initial stages of work. This was not the case in the last three years so I know someone has confidence in the New Orleans market.
Maybe its the “gone factor” of no longer having Mayor Ray Nagin running the show into the ground week after week. Breath of Fresh Air Now!
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Warehouse District Market Update for the Spring of 2010.
May 4th, 2010 categories: Market Trends, Warehouse District
The Warehouse District condo market has showed increased sales activity over the last month or two. The strength of the market has been in the two bedroom and two bath condos. The price range that is showing the most activity is the 250k to 450k range.
We are seeing second home buyers, students buying for medical schools with a desire to have a roommate. We are seeing more people wanting to live in New Orleans on a part time basis and want the extra bedroom for guest. We are also seeing a couple of companies buying units to have for their clients.
The one bedroom units have been the slowest of the Warehouse condo market. There have been a couple of foreclosures that have been some great buys. We are seeing some locals looking to take advantage of the low rates and flat prices of the last 4-5 years. When certain segments have fallen out of favor, this is when you get your best buys.
There are currently120 condos for sale up to the 500k range. There are 40 condos that are under contract or have been sold since March 1, 2010. Not all are priced correctly or may not be the most desirable units. It is still easy to narrow the choices down to 5-6 that meet your criteria.
The things that are selling have been updated. Not many people that want to buy and then fix up at this point. Parking remains an important factor in a buyers decision process. I would not recommend buy a place without parking unless the price is great or no others in the complex have them. The amenities are also becoming more important than ever.
Real estate is seasonal so that is where we currently are. Interest rates are still around 5%. The down payments have increased making it harder for first time buyer to afford their first place. This could be one of the reasons for the lack luster sales of the one bedroom units.
The Cotton Mill Condos is getting closer to being on the FHA that will make it much easier to purchase. Thanks goes to Ross Miller of Miller Mortgage who has been the lead person helping this along. This is not an easy process but would greatly help sales of units below the 300k level. But the 3.5 % down with lower cost is a great incentive.
835 Julia has sold all but two on the one bedroom units that they had for sale. This is a new development that got hurt form the financial crisis of 2009. This is a great sign. There are a couple of new 2/2 penthouses that are for sale. These are good buys in the 400k range.
In the last couple of weeks we have seen more condos come on the market. This is a combination as a better selling environment and the seasonal aspect of the New Orleans Condo market. The premium units have the best change of selling unless a fixer upper have big decreases on cost. Many times the units needing work are just not discounted enough.
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New Orelans Condo Foreclosures! Warehouse District Update!
April 11th, 2010 categories: Market Trends, Warehouse District
I often get asked about getting a good or great deal on a condo in the New Orleans Warehouse District. There just have not been bank foreclosures for sale. Since the beginning of 2009 I can only remember 5 that came on the market. They all happened to be very good deals. I sold 3 of them, but they stayed on the market for a while before getting scoopedup by a Sawy buyer. They were generally in great shape and needed very little done to them.
One was damaged by the owner but the bank put it back together so it looked nice by the time it hit the market. One was entered as a condo and it was a town home and proved to be a great deal. The photos were terrible and I almost missed the deal since the photos made the place look bad. Two of the unit only had exterior photos but were very nice inside. They both sold for about 25 k below fair market value.
The banks will continue to reduce the prices on a regular basis. The out of town banks give you the best deals as they have no feel for the New Orleans Market. They tend not to want to listen so it does not matter, its generally someone else’s money they are dealing with. Coming out of the slow season is a great time to catch these. They tend to go with real estate companies that do not normally work these areas. All these factors tend to work in the buyers favor. The knowledge of pricing and trends are on your side.
Short sales are a totally different story. I know of no successful sales first hand and many disappointed sellers, buyers and agents. I would avoid these in this market. It generally takes many months to make it to foreclosure after a short sale falls through. The information flow is terrible from these companies to the point of being just downright rude. My advice to buyers is to move on to better deals. Once foreclosed then the deals get even better.
One of the reasons there are few condo foreclosures, a Warehouse District Condo is easy to rent and the rental market has been getting tighter. Fewer people are buying but opting to rent for a time before jumping into the market.
Most people think there are many more foreclosures than there actually are. Most happen to be in pretty good shape. This is not Miami or Las Vegas and New Orleans Warehouse District did not get overbuilt in this area. Hurricane Katrina hit at about the time that the real estate bubble was really building before the skid.
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New Orleans Condo Trends! What is up right now! Spring of 2010!
March 22nd, 2010 categories: Market Trends
The new financing rules are making it harder to get financing until things adjust to the new market place. Many of the condos where people want to live are not on the FHA list as projects that they will finance in. This is now one of the more popular ways to finance. This effects the first time buyers the most.
The two bedroom units are doing better than the one bedroom units. This is because more people are buying condos as second homes in New Orleans. More people are living there full time as well. The new buyers are hurt because of the financing and large down payments.
Many mortgage companies are requiring buyers to have condo insurance for contents and the insides of the condo. This requirement is also new. Its always been a good idea since its about $500 per year for $30,000 of coverage. The outside damages are covered by the condo associations but not the insides.
We are beginning to see a few more foreclosures come on the market. They can often be good buys and if you have patience with the banks then you can really have some instant equity. They market these properties very poorly. The photos are often terrible and the info published is often unreliable. Thus if you know the real numbers and facts its really in your favor.
The demand for condo rentals is very good. This is the case with many apartments really pushing for new people. People tend to not want the apartment feel if they can avoid it. The demand for New Orleans corporate condo rentals is way up as there are several large films in the area
The interest rates are still very good! Hanging around the 5.25% range for a 30 year loan. You do need better credit scores for loan approval. The tax credit is still out there unit April 30,2010. Doubt if it will be extended.
Condo fees seem to be stable as owners do not want to see the fees go up. The insurance rates have come down from the peak in 2006 after Katrina. This is a major factor in condo fees.
The surprising thing is that when you start to look at the inventory there are not a lot of good choices in each and every price range. Coming up with 3-4-5 nice properties is all that you see once you start weeding them out for one reason or another. You would think this would not be the case. There is less this year than last ! people will soon be moving so I expect to see some more choices in the next couple of weeks.
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Real Estate is Seasonal ! The market has picked up big time in the New Orleans Condo Market!
February 19th, 2010 categories: Condo Knowledge, Market Trends
Now the Mardi Gras parades are over. The Superbowl Saints are a great recent memory. The New Orleans Mayor’s election is over. Buyers are turning their attention to purchasing. The buyers know the rates are great, the prices are lower and the tax credit expires on April 30, 2010. People are thinking Spring and the days are getting warmer and longer.
New Orleans has gotten millions of dollars of free press since the Saints were going to the Superbowl and coming home a winner. All the press was positive and people are feeling good about the area and the future prospects are looking up. Hundreds of millions of dollars for hospitals and schools will be forth coming. This is like a renewed interest in New Orleans.
This is also the time of year that you will begin to see the better listings as people have to move for many reasons. This is when you generally see the most of the premium listing where nothing has to be done but your decorating touch.
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New Orleans Second Home Market ! The Twos are in and the Ones are not!
January 1st, 2010 categories: Market Trends, Second Homes
The New Orleans second home market for condos in alive and well. Its not doing as well for the one bedroom segment. The tw0 bedroom condos are more more in demand. This makes sense on a couple of fronts. Many buyers want the two bedrooms for family and guest to use. Buyers in the market today for second homes are skewed to the middle range condos from 200-4ook. The low end market is just not there.
Many of the sales are cash or the buyers have 20% to put down. The interest rates on second homes is still around 5%. There has never been a lot of investors in the Condo Market in New Orleans and now that is a good thing as prices have drifted lower but have not cratered. The prices have been level since 2005.
Most of the sales I see are in the French Quarter, Warehouse District, Garden District and Uptown New Orleans. The buyers are much more willing to venture to all the areas where several years ago sales were concentrated in the French Quarter.
The fact that the one bedroom unit sales have been slow means there are currently some good deals in this segment as well. The fact that first time condo buyers are not there in numbers like a year ago makes an even bigger impact on the market. There are some nice deals to be had with that said. The condos that need cosmetic work or are outdated are not at the top of any one’s list. These could be good buys if you are willing to do some work and the price is right.
The rental market has been good as fewer first timers have been buying but renting. You can as a second home buyer rent your unit out from time if you desire. That is a fickle market but it is here now.
Few New Developments are on the drawing board due to the financial mess we are in so new competition will be few for your condos. Maybe a second home is in your future. We may even have a post Nagin housing uptick when the Mayor leaves the 5 th of May 2010. Just over 4 months away!
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Buyers are on Vacation but looking and thinking of next Year ! It pays to be ready!
December 22nd, 2009 categories: Grants and Incentives, Market Trends
The buyers are still in the condo market, some segments are of course better than others. What we are now seeing is less new units coming on the market. The sellers are waiting for next year until the Saints win the Super Bowl or until their unit is ready to sell. Real Estate is seasonal. Buyers are busy looking on line to see what there choices are. Many are looking but are still in the decision process.
The interest rates are still extremely low. They will not be this low in a year or two. Borrowing 100k today will cost you only $538 for principal and interest. This is great incentive to purchase. Rates are at 5%.
Prices are a little lower but not in a fall like some cities. Prices have been fairly steady but there are some wonderful deals to be had. As a buyer you have less competition now and that means saving about $5000 on an offer. You will not get this discount in April or May.
$8000 and $6500 tax credit is waiting for you as well. I think the economy and overall sales will improve and this will surely go away. Its a gift for you now.
Second Home Buyers are beginning to return to the New Orleans Market. New Orleans has been receiving some great publicity over the past year. With Mayor Nagin leaving on May 5, 2009, we may have a mini boom or at least we will feel in more reliable hands.
It does pay for buyers and sellers to be ready. The buyers who study and know the market trends have a better chance to buy and sell high. It always has a lot to do with market timing. Make this your advantage !!
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New Orleans Warehouse District Condos, Strength of the market is in the 2 bedroom/2 bath !
December 12th, 2009 categories: Market Trends, Warehouse District
The strength of the New Orleans Warehouse District Condo Market is currently in the 2/2 condos selling between 250k and 500k. On the surface the supply looks great but on a closer look you have fewer and fewer choices. There are 40 condos currently for sale in this category. There are 10 recent sales of units that have sold or now under contract.
There are 13 units for sale at 1201 Canal Street in the old Krauss building although technically in the Warehouse it is much more a French Quarter Place. There are 8 units for sale at the Rotunda at 330 Julia Street. Take these away and you are left with 9 choices. This is not a lot as potential buyers are looking certain criteria that these 9 may not have.
There are no new condos or conversions currently on the drawing board so the supply will not increase anytime soon. In January you should begin to see new listing as well as new buyers coming into the market.
The one bedroom units are not in high demand which is totally uncharacteristic for this segment of the Warehouse Condo Market. I have several premium one bedroom units that are not being shown much in the last 60 days. I have a two bedroom listed that has gotten shown 5 times last week. Very Strange indeed!
The only reason I can tell you is that the buyers are young couples looking for a place and they need two bedrooms. Other buyers looking for a second home and they want room for guests. The first time buyers are just beginning to think about purchasing. This is most likely due to the economy in general or the tightening of lenders as to who they will lend to. Then we could be in a seasonal lull.
Regardless of the reasons sellers have to have their units priced correctly or purchasers will look only. As a buyers agent it is easy to see which units are overpriced. The appraisers are even tighter so agents do not want to waste time with things that cannot close.
As a purchaser the best way to approach this market is to view what is availiable now and then see the new listings as they come on. This will give you an idea of what you are looking for when the time comes to purchase.
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