Let’s take a closer look at the local real estate market and discuss the impact of the COVID-19 pandemic, both current trends and potential long-term changes. On par with national trends, the New Orleans market has seen new listings, sales and showings all decline considerably in March and April compared to the same period in 2019. That said, January and February were both strong months to start the year off, so overall, year-to-date, by many metrics, the decline isn’t as immediately visible.
The Staying at Home Effect
According to Michael Styles, Real Estate Advisor, “there has been an observable increase in buyers exploring the market and looking at homes, in person and virtually, as people begin to tire of being at home.” While people have remained, mostly, home for the past two months, some of those people have spent time improving their homes, realizing what does or doesn’t work for them, and even exploring what their next move might be when the time is right. Unlike 2008’s great recession, there is not, as a country, the fear of having too much inventory. There will always be micro-economies that will defy the norm, but in general terms, some of the issues that were fundamental to the economic collapse are not present in today’s downturn. As a result, we still see – very selectively – new listings that receive multiple offers within days of being listed. “These two overarching themes will drive sales moving forward,” according to Anne Delery Comarda, Executive Vice President, Partner & Broker Associate with Engel & Völkers New Orleans. Anne believes our market, though changing, will still see demand continue “particularly in the well-priced, renovated, move-in ready home category.”
Shifted, Not Stopped
Business has certainly shifted, but not stopped. From virtual tours, remote viewings via FaceTime, Hangouts or Zoom, to inspections being performed with the client logged in from wherever they are, to industry partners including lenders and closing attorneys who have updated procedures to make sales happen. With the utmost care, Engel & Völkers continues to provide the highest levels of real estate service to our clients. Through new and existing virtual offerings, and more support than ever, our people and unrivaled product suite help our advisors strengthen their business for today and prepare for the future.
Mid-to-Longer Term Considerations
There are several key factors to explore when looking ahead in both the mid- and longer-term. Over the next few months, there will be a relatively low amount of inventory available, as businesses begin to resume operations and as sellers begin to trickle back into the market. The unknown here will be how long and what type of jobs return – this is of particular importance to watch here in the New Orleans area. It is far too early to predict what impact this will have on home prices in our region, if there is one. This is one reason to have a relationship with a professional, expert Real Estate Advisor, who will keep you informed of market conditions such as average days on market and average sales price/sq foot for the area you live in or are considering moving to.
Two longer-term factors stick out to us. First, the rise of the “short-term rental” – which had already been seeing a course correction as STR policies began to limit the number or existence of their presence in certain neighborhoods. The impact of those changes have not yet been fully realized. Second, new condominium or apartment complex developments will certainly see changes to how they are designed and to how their HOA or association is managed in terms of ensuring the health of the owners or tenants in those facilities.
And finally, this is going to further distress the retail industry and commercial leasing – more in the strip developments and projects designed to attract national brands or chains that are all currently reevaluating every part of their business. Here again, this was already an underlying factor in the commercial real estate sector as the retail leasing industry was undergoing a shift in who and what it is attracting – a shift that may be sped up due to the unknown number of bankruptcies and closures that we may see over the next 6, 12, 18 months and beyond.
For more information, give us a call today and speak with one of our team members about market conditions in your neighborhood. +1 504-875-3555 or email firstname.lastname@example.org. You can also find us online and across Facebook, Instagram and LinkedIn. Connect with us, today.
Previous two weeks of market stats provided by NOMAR, New Orleans Metropolitan Association of Realtors and GSREIN, Gulf South Real Estate Information Network.