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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.

402 Julia Street, The Lofts, New Orleans Warehouse District

        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.

Condo Amenties in New Orleans Condos

 

    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.

Federal Fibre Mills Condos, The gym, New Orleans Warehouse District

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French Quarter Condo Market, Lot of things always going on in the Quarter….

French Quarter Real Estate Collage FB2

        The French Quarter Condo Market is really doing well in 2012.  The nice things are selling rather quickly if they are fixed up and updated.  The majority of buyers are going to be second home buyers and they generally do not have the time to update.  They want something ready to go.  The other hard sell is the very small units under 400 sq. ft that will not be approved for a conventional loan.

     The mid range and upper end condos are  the units that are selling which is a good sign.  This is the case in the New Orleans Condo Market as well.  You are still going to units that are overpriced that tend to stay around for a while. 

     I recently sold one on Toulouse that had only been on the market for less than a week.  It was move in quality.  My client lives in Mandeville, Louisiana and wanted a place in the French Quarter.  Kids in college and wanted a place to enjoy on long weekends and to have friends use when needed.  The rates are still below 4% and more local banks are lending as they know the New Orleans Real Estate Market has shown a drastic improvement since last Fall.

    Many locals in New Orleans may just not get to the Quarter that much but an ever increasing amount of locals are purchasing so they can have fun and enjoy a different lifestyle.  That is why I will share my photos from this week when a lot of things were going on.  There is virtually a top festival almost every weekend these days.  So here is what I saw……French Quarter Real Estate Face Book  is where I post a lot of photos along with New Orleans Homes.   This is what I was able to see in about 90 minutes…..

  French Market Streetcar in New Orleans

Hanging Baskets on Barracks Street in New Orleans

Royal Street Corner in French Quarter

Masked Girls in French Quarter New Orleans

 Joan of Arc, New Orleans

 Window Shopping FQ, Endowed Models

 Full Balcony in New Orleans

 Hanging Basket in New Orleans French Quarter

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New Orleans Warehouse District-Sales are Brisk and Inventory is Low

       The New Orleans Warehouse District condo market is doing very, very  well this Summer of 2012.  The inventory is low and all price ranges are getting showings and sales.  Several last week sold in a matter of days.  There is a demand and buyers are learning that when they see something they need to buy.  This is the case of condos that are priced correctly and have few negatives. 

     The second home market is still doing very well.  The part-time market is increasing.  By part-time this means that the buyers will note full time residents but living here part time on a seasonal basis.  We are beginning to see this buyer more and more.  The established buyer who is moving here from other parts of town and into town are also doing well when they can find the right place.

       The first time buyer is still somewhat weak due to financing and the fact that the under 200k market does not have much to offer and they sell quickly.  It is not that they cannot afford the note but the 10% down payment is the norm.  Young buyers starting out may not have the 10% and the money needed to close.  There is New Orleans Bond Money  available that few now about, you should check it out if you are a first time buyer.

Warehouse Nights 2012

     The rents in the area are at an all time high.  Some of the current renters are now becoming buyers as they become tired of paying the rent.   Have a new client who is paying $2100 per rent a month. That is over $25,000 per year and its gone.  In two years that is $50,000.  He has decided to stay here and look for a place to purchase as a better alternative.  With the area growing it could be a very smart move on his part. The equity decreases much more than people think at these rates.  The interest is tax deductible and there is a chance of capital gain in the New Orleans Market as the low point has been hit in 2011.

     The shortage is not having a lot of inventory.  One reason is that many of the former buyers I have had are renting out their condos since they have moved on to other jobs.  I have run into some medical residents who I sold several years ago and have decided to keep their condos as a second home.  They come back to New Orleans on a regular basis to enjoy the lifestyle…

Warehouse Streets, Lafayette Street in New Orleans

     The short sales and bank sales are gone in the market and have not been around since early 2011. There are a few in the pipeline but that pipeline takes forever. Few as they are… People are still waiting for these and I do not think they will be there.

        The Corporate rental market is tied to construction projects and the movie industry. Movies tend to take a break during the hot New Orleans Summers. Some owners are also not being very realistic about the pricing and at a certain point things will not rent at too high a price.

Warehouse Nights, NOLA

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New Orleans Medical Students and residents often chose condos as a home.

     A New Orleans Condo is often the choice of many students going to the local Medical schools of Tulane and LSU.  This is often true of residents and fellows of the local hospitials.  The most popular locations for most are in the Warehouse District and in the uptown area. The New Olreans area is very compact and little commute time is needed to the schools.

    The nature of a condo fits the students lifestyle.  There is little to take care of except the inside of the condo.  You can come and go as you want.  Many of the New Orleans Warehouse Units have security at night and some on duty during the day for packages, guests and deliveries.  Many of the units will have common areas and workout facilities.  

     The Warehouse District is one of the more popular areas as its less than 2 miles to the medical schools.  The area is very safe and a car is not needed to get around in.  You are around a lot of other students and young professionals that live in the area.  The condos are not that large but are large enough for busy people. Shut the door and leave.

      The Garden District and Uptown New Orleans are also popular.  If living a more historic building is what you desire then Uptown may be a good place. The area has historic homes and apratments that have been converted into condos in the Garden District and along St. Charles Ave.

      Resale values have been good have been good in all the locations. With the rents increasing and the interest rates decreasing this will make sense to many.  If you move into Metairie the prices will drop in half and you commute will be 20-25 minutes.  Moving to Lakeview will give you a 15 minute commute and you can live near the lake.  Chcck out related articles…Metroview Condos in Metairie below 110k.,   Buying a New Orleans condo can be cheaper than renting for four years…  Cotton Mill Condos a good buy for under 200k.

Federal Fibre Mills Courtyards, New Orleans Warehouse District, 1107 South Peters

Magazine Street Condo, New Orleans Garden District Condos

Metro View Condos Pool, Metairie Condos

Related Articles- Buy or Rent ?  Warehouse District under 200k Condo, Cotton Mills Condos

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The New Orleans Neighborhood Condo Versus the Condo Complex

     One of the first decisionsa purchaser will have to make is what type of condo they desire and what type of life style does that bring.  Both are good choices.  Both have their positives and negatives.  Lets talk about the New Orleans neighborhood condos which are primarly homes turned into condos.

    They come in all shapes and sizes.  Many of these style condos were once homes, doubles, four plexes and apartments  that were converted into condos in the last 10-12 years.  The neighborhood condo has become more popular in the last couple of years. 

    The doubles that have been converted into several condos generally have the features of a shotgun double.  Two condo side by side with maybe a third in the rear.  These are going to be in residential neighborhoods where you can walk to a lot of places. We see a lot of this style along Magazine Street and the side streets.  Many times coffee shops, antiques stores, dress shops, restaurants and bars are close by.

Neighborhood Condos in the New orleans Condo Market

       One common conversion is old historic homes that were apartments that had been home and then apartments were later turned  into condos.  These have anywhere for four to six units.  Some of the condos are going to have a porch or balcony.  You may pay more for this but in the long run its a great investment to get the premium condo in the complex. 

      You will find this segment to have varying degrees of updating.  Some condos will have almost everything new and the prices are higher especially when the developer tries to duplicate the time period of the home.  These are the premium condos. 

     The next condo is where the developer did the necessary updates for the building and did all the cosmetic touches to give it a salable look.  The third category is where the developer did very little but divided the home into condos.  We find less than you would think of this type of condo.

New Orleans Homes and Porches, Magazine Street

       If you want the high ceilings, wood floors, large windows, natural light then the neighborhood condo may be more for you.  You will have more responsibility as there are fewer owners and each has to take an active part in the upkeep and  manitaince of the building and the grounds.  Some condo associations do a great job and some do not keep up the property as they should.  In the end this decreases the value of the real estate.

       Almost all will like the life style of walking the neighborhoods.  We find this condos mostly in the Garden District, Uptown New Orleans, French Quarter and even Lakeview where the cost of homes prices many people out of the single family homes.  But with a condo you can live and walk in the areas.  Riding the street cars, biking and walking to places is the norm…

      Both styles are easy to rent if that is in your plans.  The neighborhood style is not going to have the amenities that a complex will.  There will seldom be a pool, gym, guard, on site manager, or large courtyard.  The condo fees will generally be less as there is less to take care of.  The residents do have to take an active role to make sure things are maintained on a regular basis.  These are not carefree but can be a very enjoyable lifestyle…..  

Neighborhood Condos, The historic feel in New Orleans

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New Orleans Condo Market begins to shine…..as Summer begins..

     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….. 

909 lafayette windows view 1

    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.  

909 lafayette Condos, windows den1

909 lafayette street

 909 Layayette Building

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Often Asked Questions about New Orleans Condos……

     In real estate we get asked a lot of questions and many of them are asked over and over again. So let me answer some of the questions that I am asked or should be asked when purchasing a condo in the New Orleans Market.

1. What do condo fees cover….They will differ to some degree in complex to complex but it will always cover Insurance on the building, Upkeep of the building and grounds and management fees.  Water and garbage is covered in many condo fees.  Always good to know what they cover so you can gage your expenses.

2. Have the condos ever flooded….The vast majority of condos that I sell or see have not flooded.  Most just happen to be in old areas that are on higher ground.  If the condo is in a flood zone the building is required to carry flood insurance and those are in the fees.

3. How much can I expect to get off the asking price….This depends on what the condo is worth and not what they are asking. The overall aver is 2-3% of the last asking price.  When a condo sells quickly you know they got close to the asking price.  Generally the ones asking too much will just not sell.

4. How much can I get off for a cash sale….About 2 % more unless the condos are having a hard time being financed which is the case with many new ones where the units have not yet been turned over to the condo association.

5.  Are the condo I am purchasing going to go up in price…. We do not know the answer to this one.  It it has location , condition, views, and things people want then the chances are better.  The premium condos that have all the pluses will always do better.  

6. Can we rent the condo out as a rental….The answer is to be found in the condo documents and it will always say no short term rentals or weekly rentals. Minimum of 60 days is the starting point.  Many want 6 months rentals only.  You will see condos advertised but it is illegal to rent weekly in the City of New Orleans.

7. Financing is always an issue and should be asked about….20% down for a second home. 10% down for a conventional loan if you live there. 3.5% for an FHA loan but these are very hard to find.  I do know lenders for a lot of situations.  Doctor Loans ect. 

8. Who lives in the condos…. As an agent we can give you a general idea as to the ages and how many people actually live there  full time.  We will not know many more specifics.  Best to just sit and watch people come and go.  Most are friendly and you can and should ask questions to people already living or renting there.  How safe is the area tends to go along with this question. Most agents doing this full time can give you their thoughts on this subject…..

9. You should ask about using a local lender that will match up with your needs…Dealing with out of town lenders can be a nightmare.  They just do not understand the area or proctices in this market.  Avoid the large out of state banks that have branches here, they too often fail to deliver on time.  The listing agents know this and will frown on these offers when they can get one from a local.  The locals have to do well or their business dries up.

10. Can we but the buy the furniture…… Always keep that deal separate and put it in a separate offer later.  Sellers often think their furniture is worth what the paid for it.  You do not want it effecting the value of your offer.  The appliances, blinds and curtains generally stay with the condos in the New Orleans market.   

Warehouse District Collage 1

         The one that I did not answer is about square footage prices. So many variables, I will have to save that for a later blog…..
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French Quarter Condos, Sales are up and Inventory is down

     The French Quarter Condo market is doing very well.  Sales may slowed down somewhat as there are not that many things for sale as compared to last year.  The inventory is 50% of what it was last year this time. I would say the best deals were to be had last August and September as the Summer was ending.  Sellers are now more likely pricing the condos better and the buyers just have to make decisions quicker or the condos will be gone.

     The French Quarter has been crowded almost every weekend this year. Many people have been thinking about a second home and many are deciding now is the time.  Many are local people which does come as a somewhat surprise.  They are looking for a get away place for themselves and friends.  Others are thinking about retiring and spending more time in New Orleans. Others have always wanted a place here and feel this is the time to make the jump. 

     Pricing has always been tough in the French Quarter since you have a lot of variables.  Many sellers think there condos are worth more than they paid regardless of the market condition.  Some may not really want to sell.  Others however need to sell.  The conditions will vary greatly from one unit to the next.  The location within the quarter is big,  the location within the complex is also large, second floor units tend to get more, balconies to the street get much more, balconies to a courtyard get more than those that have none.

     This makes the square footage method of valuing a lot harder for people to decifer.  Most will not have parking so that is not a huge issue.  If one does have parking its worth at least 30k-40k .  The area is too old  for most things to have parking. 

 

French Quarter Balcony 2012, New Orleans

       Right now there are 85 units for sale.  There are 21 condos under contract.  Most close in 45 days so you can see the recent activity.  The ultra small units tend to be out of favor.  There are 22 units below 200k and many of these have been sitting.  Its the nice things that have been selling that have what people want in all price ranges.  Light and airy tops with windows and amenities in the complex.  Most want things fixed up and done nicely and will pay for it.  Few buyers want a project. 

        However some properties that need fixing can be great if they have all the other things that people want.  Great views, balconies, high ceilings, open spaces and in a nice complex.  I end up selling a couple of these per year and the buyers end up with some nice buys.  The common thread is that they all tend to put a lot of effort and quality in the upgrade.  These are all second home people that know what they want and have time and want to do it their way.

       It does always surprise people when you can get the best units down to 4 or 5 units before showing them.  Just not that many more to show in any given category.  The other tip is to keep an eye in those that are overpriced as many will end up selling at good prices over time.   As an agent we have our best picks and they do tend to sell.  Recently I showed a client 6 properties and the four top units sold within 3 weeks after I showed her.  The fourth took 3 more weeks and she has had but one new thing to consider in the last 8 weeks. 

French Quarter Home-Color Award

       Last week the French Quarter Tour only had two new properties to look at.  The agents view the new listings every Tuesday so they can look at the inventory to see what looks good and what their clients may like.  This saves us time, gets us a free lunch, and the sellers gets a lot of looks quickly as it comes on the market.  If it looks good the agent will get in touch with his or her client to let them know if its for them.

New Orleans French Quarter Bar

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Cotton Mills Condos, A New Listing and Update on Positive Trends of The Complex

    This is a new listing in the Cotton Mill Condos in the New Orleans Warehouse District.  It is a large complex where I have sold over 30 condos.  It remains one of the best places to purchase a condo for under $200,000.  The problem now is that there are very few condos listed for sale and the ones that do come on the market sell rather quickly in 2012.

    There are several reason for the sales trending up.  The Cotton Mills is easy to get financing as it has been approved for FHA loans.  One of the few complexes in New Orleans.  This means if you are an owner occupied owner you can put down 3.5% as a down payment.  The condo fees remain very moderate for all that you get.

   The featured amenties are a large courtyard, large pool, large party room and grilling area, a large gym, secure entrance, on site management and 24 hour security.  None of the units have parking but you can park across the street for $125  per month.  There are several other lots also available and you can still park on the street.

Cotton Mills Condos, 272 Courtyard Views, New Orleans Warehouse District

       The condo is listed at $189,272 and is in very good condition in a great location on the second floor over looking the large courtyard.  The features include an open floor plan with lots of natural light, courtyard views, very quiet area , wood floors throughout, excellent exposed brick, two large windows and has recently been painted.  Has a storage area above the bath and laundry room.  Lots of beams  and has an open feel.  The condo is 726 sq. ft. which is a nice size for a warehouse condo with 18 foot ceiling.

      The condo has been recently painted and looks great. The kitchen is nice but has not been upgraded but could easily be.  The floor plan is a open feel with the original hard wood floors.  Its an easy walk to the elevator but an easier walk to an exit about 20 feet away from the unit to the sidewalk below. 

Cotton Mill Condos, 272, High Ceilings and Exposed Brick

Cotton Mill Condos,272, Wood Floors, New Orleans Condos

Cotton Mill Condos, 272 Exposed Brick walls, Warehouse District New Orleans

Cotton Mill Condos,272 Kitchen , Warehouse District Condos

Cotton Mill Condos Scupture

    Once  agan this is a hard complex to beat for that Warehouse District feel for under 200k.  It now gets looked at by a lot more second homers as its a nice place to hang out.  The World War II Museum is a block away and the new Rouses Supermarket is a few blocks away.  The trnes for the area are looking up and so is the Cotton Mill Condos.   More Photos at New Orleans Condos under featured condos. 

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Real Estate Sales are looking up across the board in homes and condos… Its a positive feeling

     Real Estate in New Orleans is doing much, much better  in 2012 than it did in 2011.  The numbers are there to tell us this but working with clients everyday you can feel it getting better.  The buyers and sellers are making decisions faster, the supply is down, the interest rates are still very good at 4% and even below.  The positive feel is back in all the areas that I work.

   Real Estate Sales tend to be seasonal but this is more than a seasonal response to buying.  In almost all areas you can get your better choices down to 4-5 places.  In the condo market I can generally get it down to the 3-4 best places rather quickly.  There is not a large supply for people to look at.  In this case you review what is on the market and then wait for the new listings to come on the market so you can compare.  

    It is much harder to find that great deal but there are some very fair deals to be had.  I expect the supply to be up after Mardi Gras and more buyers will come into the market.  The early birds get the worm weather you are a seller or a buyer.  You are just more educated than those wanting to start later.

     The lenders I talk to on a weekly basis are busy as well. People still want to refinance but the new business is up for them as well.  I have several clients to want to move in the Spring and will need to sell their house before moving.  This did not happen a lot last year.  The move up buyer was in short supply last year but the feeling is positive for people to think about making a big move. 

     There are areas of weakness but it is those areas that really tend to be more seasonal.  The further you move away from town the business tends to be more seasonal.  The biggest factor for those areas are kids in school this time of year.

New Orleans Condo Sales are Seasonal

Real Estate Seasonal

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