Cody Mills spent months browsing listings and walking through open houses in Metairie and on the West Bank last year. With bank approval to borrow as much as $500,000, he and his fiance had plenty of homes to choose from in their price range.


But when he tallied up the soaring cost of insurance and the monthly payments on a mortgage note at current interest rates, Mills decided that for now, it made more sense to stay in the four bedroom house he rents in Old Gretna.


"I looked at buying, building, all those things," said Mills, 31, a regional manager of several area car dealerships. "Anything I would have been able to afford would have been a downgrade from where I'm living now.


Many potential home buyers like Mills are sitting on the sidelines in the New Orleans area these days, according to brokers and other market watchers. And their decision to try and wait out sky-high interest rates is a key reason that the white-hot local real estate market of a few years ago has chilled.


Home sale prices across metro New Orleans fell in three out of every four ZIP codes last year, according to data compiled by the New Orleans Metropolitan Association of Realtors, with median home sale prices down 4% compared to 2022.


Homes are taking longer to sell once they're listed, too, with the average time on the market rising to 51 days compared to 33 days a year earlier. The number of completed sales tumbled 20%.


Even some of the area's typically high-dollar neighborhoods - Old Metairie, Lakeview and parts of Uptown - saw home prices decline at a time when inflation, though down from its 2022 highs, is still chipping away at the amount of house a dollar will buy.


"It's not like people were ditching houses and going into foreclosure," said Craig Mirambell, of Mirambell Realty. "But activity definitely slowed."


The real estate trends in New Orleans echo what’s happening across the U.S. On Friday, the National Association of Realtors reported that in 2023, sales of existing homes fell to the lowest level in nearly three decades as high interest rates made buyers reluctant to jump into the market and homeowners unwilling to list their properties.


In the New Orleans area, there are still pockets of activity, of course.

Prices were up across much of western St. Tammany Parish and, as usual, in the French Quarter and parts of the Marigny, which remain popular with out-of-town investors.


St. Charles Parish also saw prices increase as the area continued to rebound from Huricane Ida. And the heart of the Central Business District saw a double-digit percentage increase in median sale prices, due largely to investor activity in a single building at 1111 Tulane, where condos are being aggressively marketed as short 


By comparison, median sale prices were up in parts of St. John the Baptist and St. Charles parishes by 4% and 7% respectively. Those increases were driven by the recovery of housing stock in areas that were hard hit by Hurricane Ida two years ago, brokers say.


St. Tammany Parish sale prices remained flat, but several areas on the western side of the parish - Mandeville, Madisonville, north Covington and Folsom - saw single-digit price increases. Those gains were offset, however, by modest decreases on the eastern side of the parish in Slidell, Pearl River and Lacombe.


Long-term growth


While home prices slipped in 2023, veteran brokers note that prices are still higher than before the pandemic-era buying frenzy that set off bidding wars and sent prices skyward. Orleans Parish homeowners felt that impact of that surge when they received sharply higher property assessments this year.


The median sale price of a home in Orleans Parish, $337,500, was 18% higher in 2023 than in 2019. In Jefferson Parish, it was 21% higher than four years ago. In St. Tammany Parish it was up 26% to nearly $287,000.

Other regional parishes have experienced similar long-term growth.


Waiting to jump


Local brokers are optimistic 2024 will be better than 2023. Part of that optimism is based on the seasonal uptick in listings and showings that always follows the holiday season.


"I've already had more activity in the first two weeks of the year that I did from October through December," King said.


Meanwhile, the Federal Reserve has signaled it may look to cut interest rates later this year. Even just a quarter of a percentage drop in the lending rate will nudge a lot of potential buyers off the sidelines, Humphrey predicted.


"These market changes happen quickly," he said. "We went from this boom to suddenly slamming on the brakes. It could switch back that fast again."


Mills is among those waiting to jump back in.

"I'm content in this place until I see rates drop," he said. "Once they drop back to around five percent, I'll make a move."


Editor's note: The story has been updated to correct Mike Humphrey's name.