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!

       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. 

     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.

    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.

      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.

        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!

       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 !!

       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.

        The positive points to the Cotton Mills Condos are the high ceilings, exposed beams, exposed brick exterior walls, extra large windows and that true warehouse feel.  It features a 25,000 sq. ft. courtyard, swimming pool, fully equipped exercise room, live security, and low condo fees.  The condos have a site manager and maintenance staff which is something all condos do not have.

      The complex is one of the largest at 269 units but it spread over the entire block.  Some of the units have not been updated since going condos in 2005.  Many however have been updated with many personnel touches since that time.  The units do not come with parking but parking is available on the street or in the secure lot across the street.  The immediate area has a lot of new construction and additions in the neighborhood over the past two years.

       The odd thing is that sales have been very very slow in the complex over the past 3 months.  Currently that are 15 units plus 3 penthouses for sale with no condos under contract.  This is highly unusual since going condos. I have sold 20 plus condo here so I know it quite well. 

       Breaking the units down there is only one 2/2 regular condo for sale at 250k which is a fair asking price. There are 3-4 nice units that are priced very well and are nice units.  What is not selling is the 5 studios or studio conversions.  There is one bank foreclosure which is a screaming buy at 153k.

       If you are looking for a second home this can be a great complex with the amenities and low condo fees.  The condos are easy to rent if that is the route you decide to go.  The condos have no problem getting financing.  Buyers should look at the Cotton Mills as I am sure the sales will pick up next year.  Buyers can get the $8000 tax credit and low interest rates of around 5%.  It ends up being cheaper than rent at the Cotton Mills.

1.   Sellers know its a slow market.  If sellers do not have to sell they are waiting for the market to improve.   These are the people who do not have to sell but would like to sell.  Its takes them a while to get caught up with the market once it turns.

2.   The Holidays are approaching.  Sellers would rather wait until its more convenient for them to sell.  They may have some things to do before putting the condo on the market.

3.   Many have given up!   The rental market has picked up dramatically and some have decided to rent until the market improves.  I suggested this to one of my sellers as I was approached by a person to rent for $2500 per month.  I took it off the market. $30,000 for a years rental was too good to pass up.

4.   People are not moving as much!  Companies think twice about moving a person in slow times as it can be very expensive for them to make a move.  Many companies are just not transferring people.  They are holding off till better times in all areas of the country. 

5.  The market has always been somewhat seasonal !  Now it is much more  noticable when you go to make appointments.  There are not that many premium units to show.  There are always the places that few want.  There are more that are harder to finance in today’s market.  

      On the other hand people do look over the holiday times as that when they have the most time.  The condos that everyone wants are still selling and many buyers do not get to see them because they do sell. 

      If your agent does work a particular area often he or she will know people that are willing to sell but have decided not to list at this time.  Some of these could be the best buys if you can find them.