Grounds for Optimism...
Good investors tend to be cautious souls. For those who prior to 2007 had never ventured into the realm of New Orleans real estate investments, the ensuing downturn might have been enough to discourage any curiosity about that direction (even if their other investments had also suffered during the global financial crisis).
Nonetheless, at this juncture those same cautious
investors might well assume that the value of real estate investments in New
Orleans have rebounded so substantially that it’s now too late to bother looking
into them. But as National Public Radio has pointed out, there's an excellent
argument to be made that conditions are now highly conducive for real estate—with
real estate investments in New Orleans being no exception. NPR points to four reasons:
1. Employment.
Employers are hiring anew, and “when companies are hiring, would-be homebuyers
feel more confident about taking on mortgage debt.” Unemployment rates have
(finally!) come down to 5.6%, and with employers having added 252,000 jobs in December,
consumer confidence is up nearly 20% over a year ago.
2. Prices seem more rational. NPR points out that from
January to October, prices rose 4.5% nationally; a “subdued” gain compared with
the 11% burst of the year before. They project that the slower price
appreciation may have set the stage for a “buying surge in 2015.” From a New
Orleans real estate investments standpoint, too, gains from last year’s run-up
in equities markets combined with mortgage rates still holding below 4% would
seem to create the key elements many investors would consider favorably.
3. Demand for rentals is high. There is a healthy demand for
rental accommodation across the country due to a tight supply of quality
accommodations. USA Today tells us
that between 2009 and 2013, the national vacancy rate for apartments dropped
from 8% to 4.1%. Over the same period, the effective rent increased by 12% to
$1,083. As one potential consequence vis-à-vis
New Orleans real estate investments, new landlords might expect to be more
selective about the tenants that they choose. That would mean fewer headaches
for landlords with troublesome and slow paying tenants. It is might also
portend that investment properties will stand vacant for briefer periods.
4. Millennials
are sick of Mom’s basement. NPR points to a Census Bureau report that says
only 36% of Americans under age 35 own a home, down from 42% just seven years
ago. The recovering employment picture might not enable young people to save up
for a down payment for a while yet, but renting quality digs should soon be
more doable than was previously the case. That could set the table for a
continuing robust rental environment, with New Orleans real estate investments
benefitting proportionately.
NPR’s four reasons for optimism in 2015 are actually
only the tip of the iceberg. If you have ever had the thought that it could be
worthwhile to take a look at New Orleans real estate investments, this is a
great time of year to give me a call!
Terez B. Harris 504-297-2619
Terez B. Harris
Terez Harris NOLA Realtor Group
Terez Harris NOLA Realtor Group
(504)297-2619
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Terez B. Harris Terez Harris NOLA Realtor Group 504-297-2619 www.TerezHarris.com
Keller Williams Realty New Orleans 8601 Leake Ave. New Orleans, LA 70118 504-862-0100
Keller Williams Realty New Orleans 8601 Leake Ave. New Orleans, LA 70118 504-862-0100
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