February 2021 Market Update – Doubles and Singles

2020’s record-setting market continues.

January market data for 2-family dwellings reflected two significant trends in the Historic New Orleans market:

• First, unlike the single-family markets, inventory has been steadily increasing. The number of doubles offered for sale have increased almost 9% in the past two years, and over 30% in the past 12 months! We have been expecting mom-and-pop landlords to divest in rental properties as renters struggle paying rent in this challenging economy. Perhaps that is an underlying cause of the strong increase in inventory.
• Second, like the single-family market, buyer demand remains strong. Buyers made acceptable offers on over twice as many houses in January than the average month in 2020. We are now at just 1.5 months on inventory for historic Uptown and Mid City doubles – less than any time in the past 2 years.

The New Orleans double remains an irrational value for owner-occupants – they sell for less per square foot and offer income to offset the owner’s mortgage.

Doubles coming on the market and selling quickly likely reflect the challenges and opportunities in this challenging economy: where some landlords want to divest, savvy buyers are eager for the opportunity, especially in light of the difficult single-family market.

In our single-family market (3 beds, 2+ baths in 70115, 70118, 70119 and 70130), multiple offers abound, and we now have less than 2 months of inventory, a steady decrease of over 36% in the past 2 years. In the same time, the median price has increased almost 14% to $465,000.

• A fellow McEnery agent had over 100 visitors at an open house last week, with 8 offers.
• Another team at McEnery recently set a record in the Bywater at over $400 / sqft for a renovated single in mint condition.

What’s driving this trend has been primarily mortgage rates, which have steadily declined from upper 4% range to upper 2% range in the past 2 years.

• This means buyers purchasing power has increased. Today buyers have 20% more purchasing power than 2 years ago!
• In the meantime, more focus on the home during COVID, people seeking in more space, and a bit of the pent-up demand still left over from last spring’s shutdown mean that growing families and new households delayed buying, and are now out in force.

This is similar to our national trend, where home sales in December were the highest in 14 years.

Should sellers list now?

In short, yes. Inventory is declining, so you have less competition. Buyer demand and mortgage rates are showing up in prices: big increases in median sale prices this year!

We had many sellers considering waiting until after Mardi Gras to list, and based on our inquiries from sellers, expect more inventory in the next few months.

For those sellers who do want or need to sell, they should start getting ready to sell if they haven’t already done so. Work on the deferred maintenance, and let’s meet soon so I can explain how we are saving our sellers thousands of dollars by avoiding inspection surprises.

Should Buyers buy now?

While inventory has been tight, mortgage rates, and thus, affordability, are still at record lows. We expect inventory to increase in the new couple of months, which should help ease the imbalance of supply and demand.

Interested in making a move? Get familiar with the market (open houses are a great way to see what’s out there with low pressure) and get pre-approved so your finances are set. Call us and we will show you our top stress-reducing strategies for any market!