New Orleans has a mixed portfolio of real estate accomplishments. On one hand, Realtor.com rated the city as the sixth-hottest housing market in the United States in 2016, following San Diego and Atlanta. In that same year, however, Make Room, a campaign by nonprofit affordable housing developer Enterprise Community Partners, ranked the city as the second-worst metro area for cash-strapped renters. Both sources are correct. Houses in New Orleans run the gamut of size and architecture, as the city is flourishing and real estate prices have been rising too.

Market Insights

In 2015, a panel of Realtors discussed the underpinnings of the New Orleans realty market. Andrew Warren, Director of Real Estate Research at PricewaterhouseCoopers noted that millennials seem to be driving trends.

Most millennials who want to stay in Louisiana’s larger urban cities want housing flexibility, so they choose to rent rather than buy. This results in a declining housing market and in soaring property costs. Realtor.com reported that during the first six months of 2015, the average home sold for about $339,743, up 10% from six months before — and 45% from pre-Katrina days. The average abandoned home went for the lower price of $62,972 during the last half of 2014. Moveto.com found that during the first six months of 2015, buyers paid 14% more. Exorbitant prices cause fewer people to buy and more people to rent. Builders built 10,000 apartments in 2010, and they built more than 45,000 apartments at the start of 2016. In turn, New Orleans has become notorious for its soaring and almost out-of-reach rental costs. Harvard's housing report shows that 35% of renters in the New Orleans-Metairie-Kenner drive 50% or more of their income to cover their living expenses. Nonprofit housing organizations are pushing affordable housing sections and elite locals resist.

Millennials also love the sharing economy, known otherwise as the Collaborative Economy or Gig Economy, where singles share, rather than buy, housing. So for instance, companies such as Airbnb promote economy lodging, which helps its clients cut rental costs. At the same time, the sharing economy has also led to changes in the commercial office market, where more office workers decide to co-share, too, in order to slash costs. Office property prices and commercial rents rose as a result.

The 2005 catastrophe of Hurricane Katrina kicked the city into high gear and stimulated it to a spate of frenetic construction and redevelopment. Millennials are in the forefront of redevelopment, with ideas for new and rejuvenating projects. There are new jobs for residents and modern buildings, and there is an uptick in entrepreneurship. The Louisianan government offers incentives to attract startups and business ventures. Outside developers and investors flock to the region in order to buy commercial and residential lots. The result is a depleted housing inventory for lower- to middle-class families, and villas or mansions for those who can afford them, which means that buyers have little bargain power, especially in the more popular areas.

There are plenty of houses for those who can afford them. The main buying segments remain older millennials, aged 25 to 34, the previous generation, aged 35 to 44, and retirees, aged 65 to 74.

Property and Transfer Taxes

Louisiana has the third-lowest effective property tax rate of any U.S. state, at just 0.46%, which means that the average homeowner pays approximately $1,000 a year in real estate taxes. Prices vary according to region. New Orleans, which belongs to Orleans Parish, has the second-highest property tax rates at 0.70%, though these still precede the national average. Louisianians calculate property tax value according to property value and local tax rate.

Property transfer tax depends on the property's sale price and refers to tax paid by buyer, seller or both parties when property transfers from one party to another. Each state determines its own party that pays. In Chicago, for instance, the buyer and seller share costs. In New Orleans, the seller deals with the cost.

Most Expensive Neighborhoods

New Orleans is a fascinating city with housing prospects picking up everywhere. According to Trulia, its five most expensive areas in 2016 were the French Quarter, which has an average listing price of $803,472; Little Woods, where property ran for a mean cost of $137,398; Seventh Ward, which contained homes that averaged $153,542; Lower Garden District, which had an average tag of $539,258; and Uptown, where houses sold for approximately $940,075.

Top Real Estate Websites

NOLA Real Estate Search brings readers up to date on New Orleans and community news. This website helps readers sell, buy and estimate the current values of their properties. The Multiple Listing Service of Louisiana provides a reduced rate for Realtor members to post their listings. As a result, MLS remains a popular go-to site for prospective homeowners and renters. Nick Galiano, real estate broker and owner of Nick Galiano Realty, blogs and provides readable market reports on ongoing trends in the New Orleans, Louisiana, real estate sector.

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