This year in real estate has proven to be anything but predictable. What to expect from the Summer 2023 real estate market is to expect the unexpected. There is no rhyme or reason for any of it, and then some things make absolute sense.
Interest Rates
Interest rates change weekly and daily, and it sometimes feels like hourly. What’s the current interest rate? As of 6/20/23, the average interest rate is 6.875%. (To be fair, the average in 2005 was 6.5%)
Many lenders are having homebuyers ask sellers for closing costs so they can do temporary rate buy-downs. Most of these are only good for two years. The hope is that interest rates will have decreased by then, and the homebuyer can refinance and get a lower interest rate.
Insurance
Honestly, insurance prices in the New Orleans metro area are what we are calling “deal killers.” You and your real estate agent should get insurance quotes BEFORE making an offer!
And, FFS, stay off the Zillow calculators. They are way off on the predicted insurance costs, and it’s a massive surprise to many people. (Those online calculators typically do not factor property taxes correctly, either!)
Days on Market
The average days on the market for a home in New Orleans are getting longer and longer. We have fewer people shopping for homes right now due to the insurance rates making the monthly payments largely unaffordable. Due to this, your home may take longer to sell.
Overpricing
There seems to be a huge trend of sellers deciding to overprice their homes for “wiggle room” to negotiate. We have seen many houses priced where they should be and get offers immediately. Do not underestimate the power of pricing your home correctly.
If you got an appraisal before listing, please quit deciding that the “value” Zillow gave your home is more accurate than a local appraiser.
Upgrades
Because of the insurance rates, buyers will ask for a new roof and other “upgrades.” Seller frustration is very high right now with the idea of replacing a roof that isn’t leaking. However, we have seen it kill quite a few deals recently. Buyers are struggling to get into the market, so large ticket repairs are not something they can take on.
Buyers
Buyers are sleeping on this market. Yes, insurance is crazy high. But if you can afford the payment – there are deals on houses out there! Some sellers HAVE to sell. And when they get desperate, you have a chance to get a home at a cheaper price. This will not be the case on every house – but we have seen some great deals this summer.
The moment insurance comes down (Lawd! We hope we have a calm hurricane season and get some new providers back in the market!), you will be competing with every other buyer that has been waiting. Same for interest rates.
Please note though, many sellers can afford not to sell and will rent their property out or hang on to it longer. Don’t assume every seller is looking to dump their property.
The 2023 summer real estate market in New Orleans is everywhere. Some homes get scooped up in a few days, while others sit for months. For our home sellers, put on your patience pants. For our homebuyers, talk to a lender about that monthly payment before you ever step foot in a home. We are here to help you navigate this strange time, though! It will have its challenges, but buying and selling are possible!
Want to talk about buying or selling in the New Orleans area? Start here!