We all know that in the latter part of 2022, the New Orleans real estate market shifted from a frenzy of buyers to a more stable market. You’ve seen the news, but how does this play out when selling New Orleans homes after the shift?
Insurance costs have increased
Home insurance rates continue to rise due to higher premiums for areas prone to natural disasters and other hazards (which is basically the entire metro area). If you’ve received a renewal notice since October 2022, then your current premiums likely increased, probably by a fairly significant amount. This extra cost can add up quickly, making it difficult for some buyers to afford to buy a home. We are seeing buyers cancel contracts once they get their insurance quote, so it’s a good idea to have your agent get one when listing your property, so you can avoid sticker shock and deals that fall apart before the deposit check even clears.
Increased mortgage rates
Increasing mortgage rates have also had an impact on the buying power of prospective homeowners. As mortgage rates rise, the amount of money someone can borrow for their home decreases and so does their ability to purchase a more expensive property. This decrease in buying power may mean that individuals cannot purchase the same property they were able to at lower rates, or may even prevent them from purchasing at all. Sellers in lower price ranges are the beneficiaries of smaller buyer budgets, while those in the middle seem to be taking the biggest hit right now.
Having an increased inventory of houses on the market can lead to a longer wait for sellers, as there are more homes to compete with. With more homes available, buyers can take their time in making decisions and may not feel rushed when it comes to purchasing a home. While we are still seeing the occasional bidding war, sellers may have to work harder in order to stand out from the competition. This can mean investing in renovations or offering incentives such as closing cost assistance to entice buyers. It is important to know the current market conditions before putting your house up for sale so that you can plan accordingly. Getting the right information ahead of time can make all the difference in selling your home quickly.
Buyers are more demanding
Because of the increase in mortgage rates, insurance premiums, and inventory, home buyers are increasingly becoming more selective with their purchases. As the cost of owning a home continues to rise, buyers have become more financially aware, often taking into consideration various aspects such as energy efficiency and long-term maintenance costs. In addition, buyers also tend to prioritize locations that offer access to nearby amenities. Home buyers are also focusing more on the quality of construction materials and whether a property has been built or renovated with durability in mind – something that can determine how long the property will last, as well as its potential resale value. It’s clear that buyers are taking more factors into consideration when making their next move and it’s no longer “stick a sign in the front yard and get it sold”.
What’s the takeaway when selling New Orleans homes in 2023?
Sellers need to follow the advice of their agent. Your agent is the one out there day in and day out, hearing what buyers are saying, listening to what buyers want and need, and coping with canceled contracts because of the market changes.
No one wants you to successfully sell your home more than we do, If you have questions about your specific property, give us a call at 504.327.5303.