With many market soothsayers predicting the end times, it can certainly rob one of enthusiasm for home buying at this murky juncture. While the doomsayers are more prevalent in recent months, this cacophony of negativity is not necessarily accurate, particularly in regards to specific markets, so it is always worth your while to do some research to find out the truth of the situation. To this purpose, respected Business journalist Kate Moran recently wrote an interesting article concerning condominium values in New Orleans: http://www.nola.com/business/t-p/index.ssf?/base/money-1/1227083470157010.xml&coll=1
In case you don’t want to take the time to read Ms Moran’s piece, I will point out the highlights as well as throw in my own insights on her major points.
1). “Condominium prices in greater New Orleans defied national trends with a robust performance in the third quarter of the year, rising 7.7 percent even as most major markets remained in the vise grip of the real estate downturn.” Wow. This is good news for New Orleans and more evidence that New Orleans’ is a different kind of city that marches to the beat of its own zydeco band, and whose economic outlook does not always reflect the national picture.
2). “…sales of second homes have helped buoy the condo market in greater New Orleans.” This second home issue is important. The affordability of New Orleans condos does make them a worthwhile investment. Particularly for parents of students who may be sending their children off to Tulane, Loyola, Xavier, UNO, or LSU post grad. New Orleans is a college town and the large number of esteemed universities here means that this cycle of parents sending their kids here will continue, and that there will be future buyers for your investment.
Imagine the scenario of a parent whose daughter is coming to New Orleans from out of state to attend 4 years at Tulane. Instead of renting a perhaps dodgy apartment or a temporary stay in a shotgun home, a smart condo purchase would result in top accommodations for daughter during her college years and then could be used afterwards as a winter or vacation home, or sold off at a profit!
3). Home prices have held aloft in this region partly because New Orleans has not suffered from the foreclosure epidemic afflicting states such as California, where formerly sky-high real estate prices helped drive a wave of speculation and risky investing.“ In fact, New Orleans condos have seen an overall appreciation of 5% to 10% in non-flooded areas after Katrina, again, showing them to be a solid investment.
Now although there is much that is positive about the real estate (and specifically condo) situation in New Orleans, there is also the reality that we are in for a stretch of tougher economic times at the national level, which will have to eventually trickle down in some way to our fair Crescent City. This bleak national outlook has manifested itself in the prediction that in the 1st and 2nd quarter of 2009, that some NOLA condos will lose 2% to 5% of their value. Oh no! But, wait, oh yes! Because of New Orleans otherwise very stable condo economy, this 1st and 2nd quarter loss will really be creating great buying opportunities for the 2nd and 3rd quarter of 2009. So be alert, do your research and be on the lookout at this time, for there are sure to be some great buys out there, and as Ms Moran has stated, condos in New Orleans can be solid, stable, and fruitful investments.