September 2020 Market Update – Doubles and Single-Family
Dear friends and clients,
Thanks again for the referrals. As busy as we have been this summer, we are always grateful for your referrals and promise to always provide great service. We are extremely blessed to be in a business that did not completely shut down, and are grateful for the opportunities to help you all!
August sales data show that our market continues to boom. Between pent-up demand from shelter-in-place to all-time historic low interest rates, buyers are ready to buy. Realtor.com announced in July that last month that New Orleans has the 5th highest increase in real estate data in the country! Our economy continues to diversify, and Amazon RanksLouisiana #5 in USA for Growth in Digital Entrepreneurs
Whiles sales are up, the amount of inventory continues to decline, making it harder for buyers to find homes. Our mortgage rates remain at all-time lows, helping both buyers and sellers: Buyers have much more purchasing power, enabling them to move to higher price points at the same or lower monthly payment. With houses easier-to-afford, Sellers have larger buyer pools.
This is finally showing up in median sale prices. For Single Family homes, the trend shows over 20% increase since January.
3 bed, 2+ bath homes in Uptown and Mid City (zips 70115,70118,70119 & 70130)
– We are still in a strong Seller’s market with 2.2 months of inventory. Month’s supply has declined almost 50% in the past two years. In that time, we have never been in a true Buyer’s market for more than a month, if that.
– Inventory continues its decline: number of homes coming on the market has declined about 22%
– Closings continue their long term trend, up about 20% over 2 years, August closings were down over June and July, exactly the same number closed last month as in August 2018 and 2019.
– With inventory declining and sales increasing, the seller’s market remains very strong.
– Mortgage rates now provide buyers with about 17% more purchasing power than they had just 18 months ago. This is finally affecting closing prices, which are trending up over 20% from January.
Conclusion: We experienced a strong spring real estate season; it is just a couple of months behind. Lack of inventory and low interest rates are keeping buyers in the market even as prices are now increasing.
In the market for doubles, activity is also strong with about 2.6 months of inventory, a seller’s market that is strengthening by over 20% in the past 2 years.
– August prices for closed sales were up, and the 24-month trend is up 10.8%!
– Sale Price : List Price ratio is 99%, few discounts in our current market.
Doubles remain an irrational value, they sell for less per square foot than singles (in similar condition and location) and with the income from renting the other unit, they are the most affordable housing in Historic New Orleans. Our prices are higher than surrounding areas, so doubles remain extremely popular for modest income and first-time home buyers.
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 get similar questions in the late fall and early winter each year: should sellers wait until after the holidays or even after Mardi Gras? There are definitely more buyers after the holidays, but also more competition from other sellers who also waited for the holidays to end. I always urge sellers to consider that buyers looking during the Holidays are usually VERY serious, and if they are not on the market, those sellers will miss those serious buyers.
Obviously, safety issues need to be carefully considered, and allowing buyers into some families’ homes may be all but impossible now. Sellers who can allow showings can find those serious buyers who are looking right now.
For those sellers who do want or need to sell should start getting ready to sell if they haven’t already done so. Open houses are starting again, and that pent-up demand from the spring is arriving now. Consider having your house pre-inspected, take care of deferred maintenance or other inspection surprises, get staging bids and get the photos taken.
Conclusion
These are of course uncertain times, but the market data proves that our real estate market remains strong. Low interest rates can compensate for overall economic decline, which will help buyers and sellers. Inventory is still declining, and buyers are back.
If you or anyone you know has more questions about today’s real estate market, we are here, working and ready to answer any questions or concerns that you may have!
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