We have officially entered into the last quarter of the year. Not only is it the last quarter of the year it is also the last quarter of this decade. This revelation has prompted us to take the time to look back over this past decade and see how the housing market of the New Orleans Metro has grown and changed from 2010 to now.
When this decade began as a nation we were crawling out of the greatest recession of our time, and here in Louisiana we were still rebuilding from the devastation of Katrina. Throughout this last decade there has been talk of the rising home prices and booming real estate market. But let's take a deep look at how this market has changed and where it is likely to go.
Economically speaking the nation has seen the longest period of GDP expansion in recent history. From June 2009 to September of 2019 the GDP has grown continually, however it should be noted that growth is not continuing to grow as rapidly, it peaked in 2018 with 2.9% growth rate. Consumer confidence in the markets remains high and is continuing to grow. Job growth as well , has continued to increase, adding 21 million jobs since 2010. Also, it should be noted, unemployment is reaching all time lows at 3.7%. In Louisiana we have seen a 3% job growth over this past two decades, while it is significantly lower than the national average of 13% it is still positive growth and statewide we have seen a continual increase in average weekly earnings since 2000. The positive economic growth coupled with the mortgage rates hitting all time lows has created for a strongly positive housing market throughout Louisiana. Specially for the regions and areas represented by New Orleans Metropolitan Association of Realtors (NOMAR) agents.
Each month at Mirambell Realty we release via our social media outlets the monthly statistics from the housing market’s data from the past month. These statistics are gathered from public record data supplied by the Gulf South Real Estate Information Network (GSREIN). We present the average number of days a home was on the market (DOM), the average sold price of homes, and the number of homes sold. This information is complied of data from the ten parishes which agents in the New Orleans Metropolitan Association of Realtors (NOMAR) represent, which includes Jefferson Parish, Orleans Parish, St. Charles Parish, St. Bernard Parish, St. Tammany Parish, Plaquemines Parish, Tangipahoa Parish, St. James Parish, St. John Parish, and Washington Parish. We have taken this information and complied the data of the last ten years to present a detailed look at the past decade’s changes to the housing markets.
Looking at the ten parishes as a whole we can see that there was a steady increase in average price over the decade. Currently this year is projected to end with that increase continuing and it is projected to continue going into the foreseeable future. Adjusting for inflation, at a 1.82% average inflation rate, the average price of homes sold rose just over $30,000 in ten years. The number of homes sold has seen a large increase in the early part of the decade and steading out of the number of homes sold in the latter half of the decade. This year is projected to be on par with last years number of homes sold, if not just slightly under it. The average DOM has decreased by half in the last decade. The early part of the decade held strong around 90+ range for average DOM but began a steady decline in 2013/2014. This year is projected to have a very minimal drop in average DOM from the previous year.
In Jefferson Parish the average DOM has been cut in half since 2010 and adjusting for inflation the average price homes have sold for has risen over $35,000 in the last ten years and is projected to continue to rise. In Orleans Parish the average DOM has had a more steady decline currently averaging at 61 days on the market, but is projected to take a further decline in the foreseeable future. The average price that homes sold for has had the most significant increase, when adjusted for inflation the average price homes sold for has risen just short of $70,000 since 2010 and is projected to continue to grow but not as rapidly. St. Charles Parish has seen the most dramatic decrease in average DOM, the current average days on the market is running at only 34 days which is only 1/3 of the average DOM in 2010. Also, to be noted is that given an adjustment for inflation, the average sale price only rose $7,000 in 10 years, with that modest increase in average sale price only being during this most recent year. If you combine that with the recent rapid decline in DOM and the previous year’s spike in number of homes sold it shows a market ripe for expansion.
St. Bernard Parish has also seen a large decrease in average DOM, cutting almost in half since 2010 and when adjusted for inflation the average sale price has increased just short of $60,000. The average home sale price is also significantly lower than the surrounding parishes making this a great market for first time home buyers. St. Tammany Parish has had only a small decrease in average DOM since 2010 and home prices have only risen $12,000, given inflation, since 2010. The number of homes sold has risen significantly over the last ten years but peaked in 2018 and will level out going forward.
Taking inflation into account the average sale price in Plaquemines Parish has increased $28,000 in the last ten years, it is expected to only show minimal increases in sale price going forward. In Tangipahoa Parish, the quantity of homes sold is rapidly increasing, but the average price has held extremely steadily over the last decade, only rising, if inflation is taken into account, a modest $6,000 since 2010. In St. James Parish the average sold price of homes has only risen just shy of $8,000, given inflation, since 2010. St. John Parish is the only parish that if taking inflation into account saw a loss in average sold prices. During the last decade St. John Parish’s average sold prices fell around $8,000, but the average DOM is showing signs of a strong decline, currently at almost half of the average DOM in 2010 and the number of homes sold has risen greatly. The number of homes sold peaked in 2015 but is still significantly higher than 2010. Lastly, in Washington Parish the average sold price of homes increased, given inflation, by almost $14,000 since 2010.
This positive trends of the housing market in our area coupled with the decreases in the foreclosures and delinquencies of mortgages, the decreases in mortgage rates, the increase in mortgage applications, and the rising wages shows that the New Orleans Metro housing market has been strong for the last ten years, it will continue to be strong going into the next decade.
*Data supplied by Gulf South Real Estate Information Network (GSREIN)
*Economic Data, Graphs, and Information form “Economic & Real Estate Market Outlook” by Lawrence Yun, Ph.D., 10/2/2019
*Analytic work done by Mirambell Realty Office Manger, Christine Sim; University of Louisiana, MBA Candidate