The New Orleans-area housing market is operating at a peak level, with the number of homes sold and sale prices rising and the inventory of properties dwindling.
“A peak market is not a market that is topped out; there’s lots of room to grow,” said Richard Haase, president of NAI/Latter & Blum. Haase presented his figures and forecast Friday during a panel discussion at the UNO/Latter & Blum Economic Outlook & Real Estate Forecast Seminar for the Northshore Region, which was held at the Clarion Inn & Suites Conference Center in Covington.
The number of homes sold annually in metro New Orleans has increased from 21,954 in 2010 to 30,322 in 2014. During that same time, the average sale price increased by 7.8 percent from $197,300 to $212,610 and the inventory dropped in half, from a 10-month supply to a five-month supply.
Haase said what has driven the housing market has been the strength of the employment market in metro New Orleans. Since 2014, 20 percent of all the new jobs created in the state have been in the area. That job growth has led to increased home sales on the north shore and the south shore.
“The north shore, East St. Tammany and West St. Tammany, they have been burning off excess inventory,” he said.
The biggest impediment in the housing market has been a shortage of homes in the $190,000 to $300,000 price range.
“The lack of inventory is curtailing sales,” Haase said. “We see many houses getting multiple offers. There are often bidding wars for property.”
The inventory problem is starting to correct itself, with more people putting houses on the market.
“People are starting to realize that it’s a profitable time to sell,” Haase said.
There are several factors that Haase is watching carefully, such as the decline in the energy sector caused by low crude oil prices and the potential for interest rate hikes. But overall, consumer confidence is high and the cost of home ownership remains low in metro New Orleans.
“There’s a lot of pent-up demand,” he said, because tight lending standards have kept potential buyers out of the homebuying market, even as the economy recovered.
“For the next one or two years, I’m extremely optimistic about housing prices and housing affordability,” Haase said. “We’re in a very healthy supply-and-demand market.”
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