New Orleans Real Estate News

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Many things happen when a named tropical system enters the Gulf of Mexico during hurricane season. Evacuation plans are drafted, city and state officials are placed on alert, and crucially, insurance companies stop writing new policies until the storm has dissipated.

The reasoning behind the temporary halt is straightforward: no one can predict with absolute certainty what a named system will do and what specific area the storm will affect. But, with the state of Louisiana’s insurance market already in disarray, a series of temporary halts to new insurance plans could be extremely damaging this hurricane season.

Mirambell Realty CEO Craig Mirambell said all realtors in South Louisiana have to be prepared for delays and cancellations during hurricane season every year.

“We’ve definitely had it happen where you’re about to close at the end of the month, and you’re booked out a month in advance, and then all of the sudden a hurricane pops up in the Gulf, and we have to delay everything a day or two until the named storm is done,” Mirambell said. “That has happened more often than not, and then on rare instances, we’ve had situations where we didn’t close because of a named storm in the Gulf, and then after the storm passed, the property took on damage and was not in the same or better condition than when the client wrote the offer, so we had to deal with that. It’ll either be a repair or the cancellation of a contract.”

Mirambell said contracts signed during hurricane season feature an addendum stipulating that the buyer can get out of the contract if the status of the property changes due to a storm. The contracts are also automatically extended if a named storm happens to form during the final days of negotiations.

While those potential delays are seen as the price of doing business in South Louisiana, Mirambell said any extra delays during this hurricane season, which begins on June 1 and runs through November 30, could cause major disruptions if the limited number of insurance carriers active in the state is impacted.

“We’re just still dealing with the insurance struggle as a whole,” he said. “With regards to closings and sort of normal delays, it will be just another headache that we deal with.”

Louisiana Insurance Commissioner Jim Donelon said the insurance market has evolved since 2005 in such a way that Louisiana insurance rates are more at the mercy of global catastrophes than ever before. Before Hurricane Katrina made landfall, causing an estimated $23 billion in damage, most Louisiana insurance carriers were based in the state.

Now, with Louisiana’s insurance covered mostly by companies based outside of the United States, international insurance market fluctuations can have strong impacts on the local market. Donelon said the impacts of Hurricane Ian, wildfires across Australia, and floods in Germany last year were felt in Louisiana insurance markets.

During the relative lull after Hurricanes Katrina and Rita in 2005, Donelon said the number of Louisiana residents on Citizens Insurance, the state’s insurer of last resort, plummeted. That freed up the market, resulting in lower insurance premiums across the board. Coming off a slow hurricane season in 2022, the absence of named systems in the Gulf this year could be similarly beneficial.

“What we had last year was a blessing, and we need, as is being predicted, a below average hurricane season to back that up with the benefit of last year,” Donelon said. “If we had another 2020-2021 season, with four hurricanes in 13 months, totaling $23 billion in damage, there’s no question it would devastate our capacity and the availability of insurance.”

As residents across the Gulf South region prepare for a possibly active season in 2023, Donelon said he’s hoping the early predictions are true, and the area will be blessed with a quiet Gulf. If that is the case, Donelon said he will jump into action to maximize the benefits and leverage as many Louisiana residents as possible off of Citizens.

“We’ve done this once before, after Katrina and Rita, we know how to do it, and we are confident it will be successful again, as it was 15 years ago,” he said.

Head over to https://neworleanscitybusiness.com/ for more

The current state of the New Orleans-area residential real estate market isn’t a typical one, according to local realtors, but it can still be viable for sellers.

The most recent numbers from the New Orleans Metropolitan Association of Realtors show new listings in August were up nearly 8% from August 2021, while closed sales were down 8.1%. Homes spent an average of 30 days on the market, compared to 29 last August. The average sales price rose 3.7% to $324,125. The data includes Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. John, St. James, St. Tammany, Tangipahoa and Washington parishes.

Craig Mirambell, NOMAR board secretary/treasurer and president/broker of Mirambell Realty, said the local market shows no signs of consistency, with some homes lasting 90 days and others in the same neighborhood selling quickly.

“It’s the strangest market I’ve ever seen in my 20 years of being a broker in real estate,” he said. “Typically, when the market turns south and goes bad, everything kind of turns bad; every house doesn’t sell and every house’s days on market rises.”

These days, it’s not necessarily a seller’s market. But a desirable home that’s updated, renovated and priced appropriately in a high-demand area is more likely to find a buyer, he said.

Kelli Walker Starrett, who was recently named the new CEO of NOMAR following the retirement of longtime leader Missy Whittington, agreed that the current market is “weird.”

“It’s not something we’ve usually seen when you have sort of the peak that we had, with as high as we were seeing sales prices for properties and multiple offers and multiple cash offers, and it was a very strange spot for us,” she said. “I think we naturally are hitting where things cool a little bit and they steady out.”

Nationwide, rising mortgage rates and declining home sales have signaled the end of a hot housing market. The New Orleans-Metairie area ranks No. 11 among markets that have cooled off the most, according to a new report from SmartAsset that looks at price reductions and decreased demand.

As of Tuesday, current rates in Louisiana stood at 6.95% for a 30-year fixed mortgage, and 6.24% for a 15-year fixed, according to Bankrate.

But the local market can still be friendly to sellers, Starrett said.

“There are still going to be people that want to buy a house,” she said. “There are going to be people that want to sell a house, and I encourage them to still do that. You don’t want somebody locked into something when they might need to make a change just because they feel like the market isn’t right for them. There’s always going to be a buyer out there.”

NOMAR numbers show that in Orleans Parish, there were 503 new listings in August, a 13% jump from 445 in August 2021. Closed sales were down 6.5%, and the average sales prices dropped 3.3% to $413,194. Days on the market dropped from 49 to 37.

There were 518 new listings in Jefferson Parish in August, up 5.3% from August 2021. Closed sales were up 2%, with the average sales price increasing to $300,142 – a 4.7% jump. Days on the market increased from 22 to 27.

St. Tammany Parish reported 431 new listings in August compared to 427 in August 2021. Closed sales were at 352, a 12.2% jump. The average sales prices also increased to $331,211, a 9.9% jump. Days on the market rose from 20 to 32.

To view all parishes in this month’s NOMAR “Local Market Update,” visit www.nomar.org.

See full article here.

For the past six months, Dennis Zaffuto has been trying to buy a shotgun double or a duplex in Mid City with no luck.

It’s hard enough finding a desirable house in his price range of $400,000 to $450,000, he said. The few times he has, he’s been outbid.

“There is not a lot of property on the market that is viable and when they do come up, they sell within a matter of days,” said Zaffuto, who is currently renting. “I even offered all cash, full asking price recently and it got bought out from under me.”

In high-demand neighborhoods like Mid-City where Zaffuto is looking, real-estate agents say that the quick sales and high bids that have defined New Orleans real estate in recent years remain in place. The same thing can be said of even pricier homes in the luxury market.

But real estate experts are casting a wary eye at several factors — and a few pieces of recent data — that suggest changes ahead.

Rates are averaging about 6.3% for a 30-year mortgage compared to less than 3% in 2021, which can make monthly payments that were affordable a year ago less so now. Also, U.S. inflation has climbed above 8%, compared to slightly more than 5% a year ago, keeping a floor on prices and further reducing buying power.

Meanwhile, the number of home sales in the nine-parish New Orleans metro area is down 10% this year compared to same period a year ago, according to the Gulf South Real Estate Information Network.

And perhaps more telling, the number of homes on the market was up 14% in August compared to last year, increasing the months’ supply of inventory from about 2 months to nearly 3 months.

Taken together, it’s clear the market is no longer a “seller’s market,” according to residential brokers. But as Zaffuto and other buyers are finding, that doesn't mean fire sales.

There is still a lot of demand in some neighborhoods, particularly in Mid-City, Uptown, parts of the Bywater and Old Metairie, brokers say.

“It’s probably the strangest housing market I’ve seen in 20 years,” said Craig Mirambell, a broker who specializes in the Metairie area. “Some houses now are sitting for 30 to 60 days, and others fly off the market overnight with multiple offers. It’s house by house, block by block, and it doesn’t make a lot of sense.”

A 'neutral' market

While it may be hard to make sense of what is going on in one respect, the factors influencing the seemingly contradictory market forces are clear.

In addition to rising mortgage rates and surging inflation, there’s also a growing insurance crisis in the state. Eight insurers have gone under in the past year. As a result, the state’s insurer of last resort is expected to increase rates 63% beginning in January. Additionally, FEMA’s new risk-based rating system for flood insurance is expected to double what half the state’s residents pay for that protection.

To be sure, home prices — the primary marker of how frothy a market is — are still rising. The average sale price in the New Orleans metro area was up 8% this year to $343,257, compared to $317,791 last year, while the median sale price was up 9.4% to $279,000 compared to $255,000. But those increases were mostly on paper once inflation is factored in.

Meanwhile, the months’ supply of inventory has increased 33% to nearly 3 months from 2.1 months last year at this time. A supply of less than three months is generally considered a seller’s market, while a supply of six months or more is a buyer’s market.

“We’re moving toward the middle of those two extremes, which is a neutral market,” said David Favret, a realtor with Latter and Blum, who currently serves as president of the New Orleans Metropolitan Association of Realtors.

Inventory is not evenly spread around though, and affordable housing stock, which brokers say is currently considered anything below $350,000, is limited.

For first-time homebuyers trying to build equity with a home purchase, it’s a real problem.

“We have first-time buyers who have been looking for a year,” Mirambell said. “They wanted Metairie. Now, they’re looking in Slidell or Luling because it’s more affordable.”

Realistic pricing

The high-end segment of the market is still going strong as well. Luxury homes priced at $1 million or more are hot, according to realtor Chris Dorion of Berkshire Hathaway Preferred Realtors, who says those buyers are less likely to need a mortgage and aren’t as hard hit by insurance rate hikes, even though they feel them.

“The true luxury market is still really strong,” he said. “There is still really this cachet about New Orleans and there are a lot of buyers who can afford it.”

But even in the mid- and high-end segment of the market, brokers say they’re noticing that sellers are becoming more realistic about their asking price.

“Anything that is well priced, realistically priced, goes fast,” said realtor Bron Hebert with the Francher Perrin Group. “Some of the frenzy has died down. But anything well priced will sell.”

View the full article on Nola.com

Mirambell Realty is excited to announce that Lyndsay Paiz has joined the MBell Family! We are so excited to see what is in store for you!

New Orleans realtor Delisha Boyd advises her clients they will be approved for home purchase prices approximately two and a half times their annual gross income.

The average price of a home in the New Orleans metro area is $354,880, according to a May report from the New Orleans Metropolitan Association of Realtors. Meanwhile the average wage in the metro area is $24.05 an hour, or $50,024 annually, according to the U.S. Bureau of Labor Statistics. A two-person income at those wages would only be able to mortgage a home for $240,000 – still $100,000 below the average sales price.

“You find a decent, move-in ready home below $250,000 in this market? Put your offer in site unseen,” said Boyd, realtor and owner of Delisha Boyd LLC. “Unfortunately, we have gotten to a price point where New Orleanians, particularly your first-time homebuyers and average wage earners such as your teachers or police officers, are being priced out of the New Orleans metro area and having to look at outlying areas to be able to afford a home.”

Slidell, Laplace, Prairieville, Gonzales and Madisonville have been several of the areas that Boyd has had to take clients looking for homes under $300,000. “But then you run into the problem of people driving 30-45 minutes to work and having to afford high gas prices,” Boyd said.

Craig Mirambell has a client who found a home in Luling for $250,000 and is driving 30 minutes to work.

“She tried to find a home in Metairie/Kenner, but it’s $300,000 minimum in our metro area to find a 2-3 bedroom, 1,600-square-foot house, and those either fly off the shelf or need updates and repairs that you need to be willing to do,” said Mirambell, realtor and owner of Mirambell Realty and NOMAR board secretary-treasurer.

Mirambell has another client whose principal and interest on a $300,000 home was $1,265 in December. Now, it’s $1,800.

Mortgage buyer Freddie Mac reported July 7 that the 30-year rate is 5.30%. One year ago, the average 30-year rate was 2.90%. The increase translates to a new homebuyer paying a mortgage note $240 higher each month than compared to last year.

“We enjoyed low interest rates and a high pace of buying activity for so long, but we have hit a wall, need to hit the reset button, so to speak,” Mirambell said. “There will be about a 3-6 month adjustment period for the market to restabilize. It will be interesting to see how home affordability improves and how the market reacts to all the varying factors. The best advice is keep having conversations with your realtor who has the best pulse on market availability.”

Homes unaffordable across the nation

New Orleans is mirroring a national trend of increasing home unaffordability amid high home prices, low inventory, rising mortgage rates and growing inflation.

National real estate data firm ATTOM has released its 2Q 2022 U.S. Home Affordability Report, showing that historic affordability has plummeted to a 15-year low as median home prices hit $349,000, with average wages sitting at $67,587. Nearly one-third of a person’s average wages is required for homeownership expenses. The percentage of average wages consumed by those expenses has risen at the fastest quarterly and annual pace since 2000.

ATTOM analyzed 575 counties nationwide, and 97% showed a home affordability lower than the historic average index of 100. ATTOM also analyzed 14 parishes in Louisiana, and all of them scored under the historic affordability index. Orleans Parish was the lowest at 62. Calcasieu was the highest at 93. Jefferson Parish scored an 81, while St. Tammany had a 72, the same as the current national affordability index.

Purchasing a home in St. Tammany, with all the expenses, requires 32.9% of the buyer’s annual income, the highest of any Louisiana parish. The average sales price in St. Tammany is $358,588, up 12% from last year (NOMAR May 2022). The median household income is $70,730 (U.S. Census).

“If you can spend about 20-25% of your income on mortgage, that’s generally where you need to be, so these current high expense numbers are definitely a good chunk of your money and pricing some people out of the market,” said Wayne Turner, realtor and broker/owner of Turner Real Estate Group. “Rates were raised so fast, and inflation happened so quickly that it’s a pinch on people and their buying decisions, especially first-time homebuyers.”

Turner said anything under $300,000 in St. Tammany is selling within three weeks; homes priced between $300,000 to $700,000 last about a month.

But when prices begin creeping toward $1 million, transactions may take longer, as much as three months. Low inventory factors into those stats. In 2019 before COVID, there were 1,850 homes available on the market in St. Tammany. Currently, there are 691, a 63% decrease.

“Our low supply has helped push up our prices,” Turner said. “One thing I’m hearing more of is, ‘If I sell, where I am going to go?’ But as in any market, you have to have a plan. You can’t wait for the market to come you, and you have to work with your realtor to adjust to the current climate.”

Mirambell Realty is excited to announce that Amanda Tranchant has joined the MBell Family! We are thrilled to have her here in the office with us!

Mirambell Realty is excited to announce Stefanie Zeledon has joined the MBell Family! We are excited for the experience you bring to our office and look forward to the growth as part of our team.

Mirambell Realty is excited to announce Stefanie Zeledon has joined the Mirambell Realty Family! We are are so excited to have her on our team and to see how she grows with us. 

Risk Map 2.0, FEMA’s new attempt to solve the national flood insurance problem in the United States, hasn’t started off on the right foot for many on the Guif Coast of Louisiana and Mississippi. Many homeowners are finding out their flood insurance rates are going to be rising and it’s not just nickels and dimes. Some renewals in Metro New Orleans are going from $700/a year premiums to $11,000.  FEMA has capped the amount a premium can increase to 18% a year, but with compounding increases these premiums could put some homeowners under water and unable to pay such exorbitant costs.

Craig Mirambell Jr., CEO of Mirambell Realty, says, “The problem I see is that many homeowners aren’t even aware of what’s to come because the increases won’t happen until their renewals hit starting in April. Many homes without policies that are being sold now are facing the immediate increase as there is no incremental increase if the property did not carry flood insurance previously.”.  The rate hikes will surely affect many Metro New Orleanians as the new Risk Map 2.0 heavily relies on data such as proximity to bodies of water but doesn't take into account as largely if your home is built inside the flood protection of the levees.  “A lot of the characteristics we are used to with flood insurance are no longer as big of factors in reducing premiums. For example, flood zones, height above base flood elevation, and if your home has ever flooded previously are no longer what FEMA considers a priority in their new pricing determination.”, Craig added. 

Another reason many homeowners aren’t aware of these potential increases is possibly an inattention to the new Risk Map 2.0. This could be attested to New Orleanians still recovering from Hurricane Ida. There are still blue roofs around the city and many are still in debate with their homeowners carriers. Flood Insurance just sent at the top of the minds right now for those renovating still.”  We can’t forget that homeowners insurance prices are going through the roof on the heels of Ida and its aftermath. Many are seeing their carriers leave the state or are being faced with hurricane deductibles up to 5%, reminiscent of post-Katrina. The one-two-punch of both rising premiums will not be warmly welcomed, but just like hurricanes, we seem to resiliently get through them each time.

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