As we’re now nearing the end of the third quarter of 2022, I thought it was time to revisit local market data and offer an update on where things stand in the New Orleans housing market. Circumstances have changed considerably since my last post, as interest rates have gone from around 3.2% at the start of the year to nearly 6% as I write this, and we are seeing challenges in our local homeowners insurance market – increased premiums, carrier bankruptcies or carriers exiting the market – plus an increase in flood insurance costs for many arising from the implementation of FEMA’s new Risk Rating 2.0 methodology. As all of the aforementioned would suggest, we are in the midst of a slowdown and a shift from what was for many months a strong sellers’ market to a more neutral market.
Orleans Parish Single-Family Homes
Looking at single-family homes in all of Orleans Parish, you can see in the chart below that the number of homes for sale is up 52% year over year for the month of August and the number of homes sold in August was down 4.2% year over year (June to August 2022 shows a more marked sales decline relative to 2021 of 16.6%). Interestingly, pending sales for August shows an increase of 7.2% over August of 2021 (however the June to August 2022 numbers show a decline in pending sales of 13.4%).
But despite the slowdown, we are not yet in a buyers’ market as measured by months of inventory (how long it would take to sell through all available inventory at the current pace of sales). You can see in the chart below that based upon closed sales, there was still only 4.2 months of inventory in August – less than three months of inventory is a sellers’ market, between three to six months of inventory is a neutral market and more than six months of inventory is a buyers’ market.
And interestingly, days on market for single-family homes in Orleans Parish have actually decreased 12.1% year over year for the month of August (and 20% year over year from June to August).
And finally the median price per square foot for single-family homes in Orleans Parish has increased 10.6% versus August of 2021 to $208 a foot.
Downtown New Orleans Condos
During the worst days of the pandemic, the downtown condo market was effectively the inverse of the single-family market – inventory was high (particularly in the French Quarter) and sales were slow – but sales began to pick up last year and inventory levels have come down. As shown in the chart below, the number of condos for sale in August was down 31.2% relative to August of 2021 in the zip codes encompassing the French Quarter, Warehouse District and the CBD . Yet sales of condos in August were down 36.4% relative to August of 2021 (the June to August numbers show a smaller drop in condo sales of 28.9% relative to June to August 2021), suggesting we may begin to see another uptick in inventory.
There were 6.1 months of condo inventory in August, versus 5.7 months of inventory in August of 2021. The June to August months of inventory was 5.3 months, versus 11 months in June to August of 2020.
In the French Quarter, the median sold price per square foot in August – $487 a foot – has risen 8.5% relative to August of 2021.
In the Warehouse District and CBD, the median sold price per square foot in August – $405 a foot- has declined half a percent relative to August of 2021, which is on top of a 10.2% decline from August of 2020 to August of 2021.
Now let’s take a look at the single-family market in a couple of individual neighborhoods.
Uptown was a very hot market over the last couple of years, yet the latest data for the 70115 and 70118 zip codes encompassing much of Uptown, show the market in the area is beginning to cool off. Single-family inventory was up 46.3% in August relative to August of last year but sales in August declined only 2%. However, the June to August 2022 sales figures show a more substantial 17. 8% decline in sales from the same period in 2021.
As with city-wide months of inventory, Uptown, despite the slowdown, is still a neutral market with four months of inventory in August.
Uptown also shows the same counter-intuitive trend we saw city-wide of days on market actually decreasing from 6.2% from August of 2022 versus 2021, despite the slowdown evident in increasing inventory and decreasing sales numbers.
The median sold price per square foot Uptown was $339 a foot in August, which is 7.6% higher than August of 2021.
Marigny-Bywater, St. Roch and St. Claude Single-Family
The 70117 zip code, encompassing Marigny, Bywater, St Roch and St Claude, also saw strong demand and low supply over the last two years. Yet as with Uptown, supply is increasing and sales are decreasing. Single-family inventory is up 41.2% in August relative to August of 2021 and sales are down 45% for the same period (the June to August numbers show a smaller 30.5% decline in sales and the same inventory increase percentage).
The area had 7.4 months of inventory in August (a buyers’ market), but only 4.6 months of inventory June to August (a neutral market).
The median sold price per square foot in the Marigny was $358 in August, a 15.5% increase over August of 2021.
And finally the median sold price per square foot in the Bywater was $305 a foot in August, an 8.2% increase over August 2021.