New Orleans CBD and Warehouse District Real Estate
The times they are a’changing in the downtown and Warehouse District real estate markets. Just a couple of years ago, prices and demand for real estate were off the charts in our urban center. We warned that the bubble would burst, and we were right.
Both the rental and sales markets have softened over the last year, with average prices dropping in both categories.
CBD/Warehouse District Rental Market
Supply and demand
The average supply of available rentals in 2016 was 5.83 months. That’s a healthy market that leans towards landlords, but take a look at prices. While the demand for rental units is stronger than ever, the average rental price dropped by 11% in 2016.
CBD/Warehouse District Residential Real Estate Market
Supply and demand
The number of properties for sale is exponentially higher than the number of buyers looking to jump into the market right now. Our advice to owners in the area? If you don’t have to sell, don’t add to the noise. Competition is stiff and buyers will walk away from a deal, knowing there are plenty of other properties to choose from right now. It’s a strong, strong, buyer’s market.
With so many options for buyers to choose from, downward pressure on prices was inevitable. After peaking in 2015, the average sale price dropped by 6.2% in 2016. At the same time, buyer interest slowed as more people choose to rent rather than buy.
What’s on the horizon for these neighborhoods?
There is so much competition from newly developed luxury rentals, that owners in older buildings will be forced to either reduce their rents or throw in some extras to sweeten the pot (paid parking, anyone?).
Need to sell? Normally, we would look back at 6 months worth of sales to assist in setting a listing price. With prices in such flux, we wouldn’t recommend going back more than 90 days right now.