New Orleans Real Estate Market Update – Mid-Year 2023

Dear readers, as you know, we are now halfway through 2023. So, as is tradition, I wanted to provide you with this update on where things stand in the New Orleans real estate market.

We have been in an environment of rising interest rates and increasing insurance costs for over a year now. During this time the level of housing supply has increased and valuations have come down from the peak levels we saw in 2022.

And while inflation readings are steadily trending downward, we are still not at the Fed’s two percent inflation target. Further, economic data continue to show there is surprising resilience in the economy – employment, consumer spending, stock valuations, etc – despite the Federal Reserve’s attempts to induce a slowdown. So while the Fed paused rate hikes at their last meeting, most believe they will raise rates at least two more times in 2023 and hold rates at an elevated level into 2024.

With this posture from the Fed, it is likely mortgage rates will also remain at or above current levels into 2024, which would suggest our real estate market may not improve substantially for several months. One bright spot for home prices, however, has been inventory levels. Despite the aforementioned increase, the supply of single-family properties is still at a neutral level, i.e., we are not yet in a buyer’s market. The prevailing view on this is that millions of homeowners bought or refinanced at historically low rates during the pandemic and they are not going anywhere in the current rate environment unless they have to sell. This is good news for local property owners, as current inventory levels are keeping valuations relatively stable despite the headwinds we are facing, and there seems to be a seasonal uptick in the market that could further support property values over the next several months.

To start with our market stats, let’s take a look at single-family homes in all of Orleans Parish.

ORLEANS PARISH SINGLE-FAMILY

The median price of a single-family home in Orleans Parish was $385,000 in June of 2023. This is up 3.5% from the prior month but down 9.4% from June of 2022, which was when the median price peaked at $425,000. Looking at the second quarter of 2022 versus the second quarter of 2023, the median sale price is down 6.4%, from $389,000 in Q2 2022 to $364,000 in Q2 2023. However, comparing June of 2020 to June of 2023, the median sale price of a single-family home in Orleans Parish is still up 28.8%, from $299,000 in June of 2020 to, as previously mentioned, $385,000 in June of 2023.

The average sold price per square foot for a single-family home in Orleans Parish was $240 in June of 2023, up 3.4% from May of 2023. But the average sold price per square foot is down 5.9% from June of 2023 relative to June of 2022, when the average sold price per square foot for single-family homes in Orleans Parish was $255. Comparing Q2 2022 to Q2 2023, the average sold price per square foot is down 4.5% from $244 to $233 per square foot. However, going back to June of 2020, the average sold price per square foot is still up 32.6%, from $181 psf to $240 psf.

Months of inventory measures how long it would take to sell through all inventory on the market at the current pace of sales. A seller’s market is present when there is less than three months of inventory, between three and six months of inventory is considered a neutral market and more than six months of inventory is considered a buyer’s market. In June, there was 5.3 months of single-family home inventory in Orleans Parish. This is a 128% increase in single-family inventory from June of 2022, when there was 2.3 months of single-family inventory.

Average days on market have risen from nineteen days in June of 2022 to fifty-two days in June of 2023, a 173% increase, while average days on market have gone from twenty-five days in Q2 2022 to fifty-two days in 2023, a 108% increase. And in June of 2023 parish-wide, homes are selling for an average of 93% of their list price, versus 97% in June of 2022, a 4.1 decrease.

245 single-family homes sold in Orleans Parish in June of 2023, a 27% drop from June of 2022, when 336 single-family homes sold. However, 248 single-family homes were pending sales in June of 2023, which is only a 6.4% decline from June of 2022, when 262 homes were pending in Orleans Parish. This suggest there is still demand in the market despite interest and insurance rates and that we will see seasonal improvement in sales numbers. The 3.5% median sale price increase from May to June of this year noted above also suggests there may be enough seasonal activity in the market currently to potentially bring prices back up this quarter.

Now let’s take a look at French Quarter condos.

FRENCH QUARTER CONDOS

The median sales price of a French Quarter condo was $346,000 in June of 2023. This is down 5.2% from June of 2022, when the median sales price was $362,500. The most recent median sales price peak for French Quarter condos was reached in September of 2022, when it hit $397,000 (the last peak was in January of 2017 when it reached $395,000).

The average sold price per square foot for French Quarter condos was $504 in June of 2023, which was up 0.8% from June of 2022, when it was at $500 a square foot. The peak price per square foot for French Quarter condos of $535 was reached in October of 2022.

Condo supply in the French Quarter reached a several years low of 6.1 months from April to June of 2022 (inventory had not been that low since June of 2015), but it has since begun to climb back up. And in June of 2023 there was 9.9 months of condo inventory in the French Quarter, a 62% increase from June of 2022 and a level of inventory that places the French Quarter solidly in buyer’s market territory.

French Quarter condos were on the market for an average of eighty-two days in June of 2023, which is a 32% decrease in days on market from June of 2022, when the average days on market stood at one hundred twenty-one days.

In June of 2023, condos in the French Quarter sold for an average of 96.8% of their list price. This is a .6% increase from June of 2022, when condos sold for 96.2% of their list price.

There were forty-six condo sales in the French Quarter in June of 2023, which is a 24.6% reduction in sales from June of 2022, when there were sixty-one sales.

Finally, forty-eight condo sales were pending in June of 2023, which is a 22% reduction in pending sales from June of 2022 when there were sixty-two pending sales.

Let’s now take a look at condos in the Warehouse District and Central Business District.

WAREHOUSE DISTRICT AND CBD CONDOS

The median sales price for Warehouse District and CBD condos in June of 2023 was $347,474, which is 18% below the June 2022 median sales price of $424,500.

The average price per square foot for Warehouse District and CBD condos in June of 2023 was $468, which is 0.6% above the average price per square foot of $465 in June of 2022.

Condo supply in the Warehouse and CBD was at seven months in June of 2023, which is the outset of a buyer’s market. Similar to French Quarter condo supply levels noted above, Warehouse and CBD supply levels hit a several year low of 4.3 months in mid-2022. Also similar to the French Quarter, inventory levels had not been that low since mid-2015.

Warehouse and CBD condos were on the market for an average of thirty-three days in June of 2023, down 67% from June of 2022 when condos were on the market for an average of 100 days.

Condos in the Warehouse and CBD were selling on average for 98.3% of their list price in June of 2023, which was up 1.3% from June of 2022 when they were selling on average for 97% of list price.

Ninety-eight condos sold in the Warehouse District and CBD in June of 2023, which is the exact same number of condos sold in June of 2022.

There were one hundred and eleven condo sales pending in June of 2023, which is a 20.7% increase over June of 2022, when there were ninety-two condo sales pending.

Now let’s turn our attention to the Uptown single-family market.

UPTOWN SINGLE-FAMILY

This data is taken from the 70115 and 70118 zip codes that encompass much of Uptown. The median price of a single-family home in these Uptown zip codes was $541,000 in June of 2023. This is down 14% from the prior month and down 26.8% from June of 2022, when the median price was $739,000 (the peak median sale price for Uptown of $765,000 was reached in February of 2022). Looking at the second quarter of 2022 versus the second quarter of 2023, the median sale price is down 6%, from $680,000 in Q2 2022 to $639,000 in Q2 2023. However, comparing June of 2020 to June of 2023, the median sale price of a single-family home in Uptown is still up 12.7%, from $480,000 in June of 2020 to, as previously mentioned, $541,000 in June of 2023.

The average sold price per square foot in Uptown was $323 in June of 2023, which is a 9.8% decrease from the average sold price per square foot of $358 in June of 2022. The average sold price per square foot for Q2 2023 is $332 versus $344 for Q2 2022, a 3.5% decrease. Finally, comparing June of 2020, when the average sold price per square foot was $259, to the June 2023 figure of $323 a foot, the price per square foot has increased 24.7%.

At 4.5 months, Uptown single-family inventory remains neutral, i.e., neither a buyer nor a seller’s market. Yet, relative to June of 2022, inventory has increased 112% from a low of 2.1 months.

Uptown single-family properties were on the market an average of forty-four days in June of 2023, which was a 175% increase from June of 2022, when properties were on the market an average of sixteen days. Looking at Q2 2023 relative to Q2 2022, average days on market increased in 2023 by 76%, from 25 to 44 days. And properties sold for an average of 94% of their list price in June of 2023 versus an average of 97% of their list price in June of 2022.

In June of 2023, fifty-four single-family homes sold Uptown versus eighty-two single-family homes in June of 2022, a 34% decrease in monthly sales. Forty-six homes were pending in June of 2023, which is only 4.2% below June of 2022, when forty-eight homes were pending Uptown.

Now let’s take a look at single-family in Marigny-Bywater.

MARIGNY/BYWATER SINGLE-FAMILY

The median sales price for a single-family home in Marigny-Bywater was $582,500 in June of 2023. This is a 5.9% increase from June of 2022, when the median sales price was $550,000.

The average sold price per square foot for single-family homes in Marigny-Bywater was $332 in June of 2023, a 1.5% increase from June of 2022, when the average sold price per square foot was $327.

In June of 2023, there was a 4.3 month supply of homes for sale in Marigny-Bywater, a 48% increase from June of 2022, when there was 2.9 months of supply.

Homes were on the market for an average of fifty days in June of 2023, a 4.2% increase from June of 2022, when homes were on the market for an average of forty-eight days.

Homes in Marigny-Bywater were sold on average for 95.7% of their list price in June of 2023, which was 2.6% below the average of 98.3% in June of 2022.

Forty homes sold in Marigny-Bywater in June of 2023, a 7% reduction from June of 2022, when forty-three homes sold.

Thirty-nine homes were pending in Marginy-Bywater in June of 2023, a 7% reduction from June of 2022, when forty-two homes were pending.

As always, I hope you’ve found this information informative. If you have any questions, or would like information on any areas I didn’t address, please contact me by email, or by phone at 504-407-9012. And please keep me in mind if you or anyone you know needs assistance with real estate in metro New Orleans.

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