Weekly Recap 5.3.2020
I hope your family and you are safe as we enter into our 8th week of quarantine. Witry Collective is thankful real estate is considered to be an essential business in Louisiana. We have several colleagues, clients, and friends living in various states and their real estate transactions as practitioners, buyers, and sellers are all on hold.
This past week was the first week real estate activity since Mardi Gras felt a sense of normalcy. Showings of homes are on the increase and more homes are being listed for sale on the daily. Also, there is an increasing number of furnished rentals coming on the market that were short-term rentals. At this point, I have not seen any of the short-term rental homes enter the market as furnished houses for sale, just as furnished rentals. Most of the rentals range from $2,500-$5,000/month in the historic neighborhoods. Watching this furnished rental market will be fascinating to track. New Orleans has always had a strong second home market and it will be interesting to see if consumers will want to maintain a second home here post COVID-19. Second homes offer an option to escape to another city while being quarantined. Another buyer trend to track will be remote employees that can maintain employment out of state while living in New Orleans. Fannie Mae has forecasted interest rates will continue to remain low through 2021, even as low as 3%. This stat will be good for buyers that have high employment confidence.
I wanted to share some interesting data from the National Association of Realtors as we have started to witness trends in real estate activity over the last 8 weeks.
44% of homebuyers have put their home search on hold. 50% of sellers have put their plans to sell on hold. 68% of buyers believe home prices will adjust downward. The majority of buyers expect prices to decrease by 5-10% in various markets. Nationally, several economists expect prices to hold steady as there is still a housing shortage in most of the country. In New Orleans, we have enough housing for our population, but we have an affordability issue and many properties are sitting blighted or vacant. If you want to take 15 minutes, this is a good read from Nathan Lott with the Preservation Resource Center about the number of vacant housing units in New Orleans: Click Here to view.
Over the past few weeks, I have witnessed buyers wanting homes where they can co-exist with multiple family members, so developers need to think about designing dynamic spaces to include home offices and larger bedrooms. Outdoor space has also become a very important amenity for people to request in their home search. How homes are being shown has changed overnight. Per the National Association of Realtors, video tours and online marketing of homes has gone up 400% since the middle of March. Open houses are being conducted virtually and online platforms for people to walk through homes with Matterport images are on the rise by 500%. The digital signing of purchase agreements and mortgage documents have become common practice. In Louisiana, closings still must be done in person, but title companies are making the proper adjustments for all signers so that everyone involved stays safe.
This week, Witry Collective organized a list of community resources. Please share this page: click here, make use of the resources, and send any information that you think we should add