Metro-area home sale prices grew 10.5% in 2021

Which neighborhoods were the most popular among New Orleans-area homebuyers in in 2021? All of them, according to local realtors who saw sales prices grow by double digits during the second year of the pandemic.

“There wasn’t an area across the entire New Orleans metro area that wasn’t hot,” said Leslie Heindel, an agent with Crescent City Living.

“Inventory went quickly, especially in the markets below the $300,000 price range and in surrounding New Orleans areas where people could still be close to the city,” Heindel said. “Bidding wars for those affordable homes took place throughout the year; I was even in two bidding wars on Christmas Eve. We had a lot of interest in out-of-state people moving here, while people living in the city were interested in moving to suburbs for more living and workspace due to the increased need to work from home.”

Local agents enjoyed a seller’s market of higher prices as residential prices grew 10.5% to an average sales price of $318,885. Days on the market dropped 36.2% to an average of 37 days. The number of homes sold increased 3.3% to 17,234 across the area.

According to New York-based RealtyHop’s year-end report, “2021 U.S. Housing Market in Review,” the 10.5% price increase made New Orleans 27th out of the top 50 largest cities in residential housing sales price growth.

“New Orleans followed the nationwide trend of an incredible year for residential real estate prices with several factors contributing to increased demand,” said Shane Lee, data scientist with RealtyHop. “The cost of financing was drastically reduced, thanks to historically low interest rates. This not only boosted home purchases but made refinancing more attractive. Pandemic-driven remote work led more families to migrate from the city to the suburbs, driving up prices in those areas. Construction material inflation prices and supply chain issues made building homes more costly, leading to lower inventory and more demand than supply.”

Nationwide, home prices went up 14% in 2021. Austin, Texas ($535,000 median price) was the hottest housing market in 2021, with a 27.7% rise in average sales prices. Lee expects the nationwide price growth to continue through 2022, with values to grow a further 6.3%.

“The market will likely cool off as the Federal Reserve starts raising rates, but it will remain strong until supply catches up,” Lee said. “As the pandemic continues with omicron, we expect demand for larger homes will continue in secondary and tertiary markets. Searches for two and three-bedroom homes are projected to outpace studio and one-bedroom properties.”

A factor that local real estate agents will be watching closely this year is flood insurance, particularly the effects from Risk Rating 2.0 and Hurricane Ida. Risk Rating 2.0, the National Flood Insurance Program’s new rating structure for policies, uses different methods of assessing risk. There are currently 495,900 homes in Louisiana with NFIP policies, and according to FEMA.gov, 80% of those will see a flood insurance premium increase of at least $20 per month in the first year. New policies beginning Oct. 1, 2021, and existing policyholders eligible for renewal were subject to the new rating methodology.

“With interest rates on the rise, inflation and supply chain issues, we need to add increased flood insurance and the lack of insurance carriers post-Ida as factors when looking to buy and sell,” said Kate Witry, an agent with Witry Collective. “There were at least 30 homeowner insurance carriers pre-Ida, now we may have six. Homeowners, and now flood premiums, are at all-time highs.”

Highest priced parish: Orleans

With an average sales price of $428,027, an increase of 9.8%  from 2020, Orleans Parish was the top priced metro area parish, according to the New Orleans Metropolitan Association of Realtors (NOMAR) Gulf Shore Real Estate Information Network (GSREIN) market statistics report. There were 4,362 homes sold in Orleans Parish, a 9.1% increase from 2020. Days on market decreased 16.4%, down to 51. Lakeview had the most homes sold at 519.

“Lakeview continues to be the staple,” Witry said. “Lakeview has the most pools in New Orleans, and pools are on people’s wish lists, especially since they have been at home more throughout the pandemic.”

Uptown ranked second in Orleans Parish, at 444 homes sold in 2021.

“Uptown is always a hot area; it’s the quarter mile principle that people want to live in the vicinity of walking to retail, and enjoying the green space, oak trees and architecture that our beautiful city has to offer,” said Bryan Francher of Francher Perrin Group.

Gentilly ranked third in Orleans Parish at 428 homes sold, followed by the Lower Garden District (418) and Bywater (385) rounding out the top five in Orleans Parish.

“Gentilly ($320,723) has price ranges that are attractive and affordable, and we have had some buyer activity there from former renters who have more cash because of the federal injection, combined with low interest rates, and they can purchase now,” Witry said. “Amenities like Ponchartrain Park, additional green spaces, historic districts, larger lots and areas that are accessible to go downtown and be close to schools also make the area attractive.”

Sales in the Central Business District and arts district areas were hurt by the pandemic over the past two years. But recent developments such as The Standard at South Market, Four Seasons Hotel and Private Residences and the return of tourism, events, conferences and Mardi Gras could spike interest in downtown and increase residential sales volume.

“Tourism has been pretty non-existent for the past two years,” Witry added. “But hopefully, the spotlight will be put back on our downtown area through a rise of tourism and major events, and residential sales will improve along the same momentum of the surrounding areas.”

Metairie: ‘Gift that keeps on giving’

Metairie continues to anchor Jefferson Parish residential sales as 1,712 homes were sold in 2021, an increase from 1,658 in 2020. Overall, Jefferson Parish had 4,333 homes sold, a 3.3% increase from last year. Homes sold at an average price of $290,486, a 7.7% price increase; and days on market decreased from 45 to 30, a 33.3% drop.

“Metairie is on fire and is the gift that keeps on giving,” Witry said. “The majority of the housing stock is old-school, post-World War II, and people are buying them, updating them, investing in them, and they want to live near good streets, infrastructure, schools, the interstate and be within 10-15 minutes of their jobs.”

Throughout most of 2021, Craig Mirambell, CEO of Mirambell Realty, said if he did a residential listing property search that included Kenner to New Orleans, there would typically be “big empty pockets of little to no inventory.”

“Even if you saw a listing, it was gone within a week to two weeks; everyone wants proximity to the interstate and shopping,” Mirambell said. “We hit record low inventories in the last five years for the majority of both Orleans and Jefferson Parishes, and with the sale prices increasing in those areas it has forced more people to look in neighboring areas.”

That dynamic opened the door for a residential purchasing increase in places like St. Bernard Parish; Slidell, Mandeville and Madisonville within St. Tammany Parish; and Marrero, Gretna and Harvey on the west bank of Jefferson Parish.

Marrero ranked second in Jefferson Parish with 610 homes sold, surpassing Kenner (566), Gretna (408), and Harvey (311).

“The younger workforce is moving into the Marrero, Kenner and Harvey markets and finding nearby affordable price points where they can live and still be close to where they work,” Witry said. “These areas have also benefited from people displaced from their homes in Ida and looking for non-damaged housing stock.”

St. Bernard Parish experienced a 15.3% increase in the number of homes sold (610), combined with an average sales price increase of 22.7% to $241,006, the highest percentage price increase of any New Orleans metro area parish.

“I have sold a lot of homes in St. Bernard; it’s surprising how many people are heading to Arabi and Old Arabi,” Heindel said. “We have a lot of demand out there.”

St. Tammany Parish leads number of homes sold

St. Tammany Parish had the most homes sold in 2021, at 5,006, a 1.6% increase from 2020. Slidell (1,699 homes sold) led the parish, followed by Covington (1,333), Mandeville (921) and Madisonville (457).

“The Slidell average sales price is considerably lower than some of its neighboring cities. Slidell’s average sale price is about $255,000, while the next closest is Kenner ($270,000), then Covington ($340,000), Mandeville ($360,000), Metairie ($370,000) and New Orleans ($420,000),” Mirambell said. “There aren’t many places a buyer can get into Metro New Orleans for under $300,000. There are a considerable number of buyers in the area looking for homes under $300,000. When you have a city that has inventory under $300,000, one reason buyers are choosing Slidell is because of the great entry price point not found nearby.”

Felicity Kahn of Felicity Kahn & Associates at RE/MAX Alliance, added that within St. Tammany Parish, TerraBella in Covington is in high demand.

“It’s similar to a Seaside, Florida, with the white picket fences, commercial and residential on-site activities with a community that is neighborhood-driven, and people can live, work, play and socialize near where they live,” Kahn said. “Old Mandeville is also incredibly popular – expanding north of Florida Street and Monroe.”

House with an ‘escape room’

Pre-pandemic homes may have had more open spaces, but in pandemic times, the more rooms and isolated spaces in a house, the better.

“We have seen a trend of the escape room – a room of privacy, whether it be for an office, gym, in-home school learning environment for the kids or a place to just get away,” Witry said. “People want that extra room in their new purchase, and that fourth bedroom availability satisfies their privacy needs.”

Additional buyer wish lists include creative and larger outdoor space, pool and proximity to community and retail.

“When the lockdowns placed people at home more, being able to walk to grocery stores, banks, mom-and-pop retail places were all trends that were and still are appealing,” Francher said.

If buyers can’t find their ideal home to buy, Kahn has noticed they will renovate their existing homes to fit their needs.

“It’s another reason why inventory is lower than it has ever been – people have gotten comfy in their homes during COVID and performed renovations to make it suitable and comfortable for themselves,” Kahn said. “They finally got around to getting everything done on their honey-do list and removed limitations they may have had in the past that kept them from living and working in their homes as they are able to do now.”

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