There were several factors with an effect on 2022 New Orleans home sales. Overall, high demand from buyers continued to prop up median sold prices for the first 6 months of the year. But, when interest rates started to rise rapidly, we clearly saw a change in prices as a result of the reduced purchasing power of home buyers.
Median prices of 2022 New Orleans home sales
Median sold prices for single-family homes peaked in June 2022 at $425,000. By the end of the year, the median sold price was down to $334,000. In addition to rising interest rates, the cost of insurance began to skyrocket as several insurers went out of business or pulled out of the state of Louisiana. Higher monthly insurance costs also reduce purchasing power and push buyers into lower price ranges in order to keep their monthly mortgage payments manageable.
Number of closed single-family home sales
June of 2022 was the peak this year for the number of homes sold (329). The number of sales dropped off at the same time as prices did, ending December with 178 sales.
Days to sell
It doesn’t take a rocket scientist to predict that when demand softens it will take longer for homes to sell. In January 2022 the median days on market was 20. It peaked in October at 34 and ended the year at 26. While the graph may look very dramatic, homes that are priced correctly are still being sold within a few weeks.
Months supply of inventory
Despite that steep incline in the months of inventory, the market is still tipped towards sellers right now, ending the year at 4.1 months of homes available. It’s not the low of 1.9 months in January, but it’s also not a clear indicator that the market favors either buyers or sellers.
Who has the upper hand?
Right now, it’s not buyers OR sellers. It’s the insurance companies that have the most significant effect on market activity. We’ve seen too many potential sales get canceled during the due diligence period when buyers find out the cost of homeowners coverage is escalating their monthly payment above what they can qualify for or feel comfortable paying. Interest rates have settled down to about what they were in 2021, but that has been totally offset by insurance rates.
With so few options for coverage in the metro area, we will probably continue to see this as the biggest stumbling block for sales, forcing sellers to be a little more flexible and open to negotiation. The days of sticking a sign in the yard and getting multiple offers on day 1 have passed. Now it’s time to make sure that homes are priced and prepared properly so they stand out to the buyers that are still in the market.
Is a move in 2023 on your list? Give us a call at 504-327-5303 today to connect with one of our local market authorities who can guide you through the buying or selling process.
