Five Ways to Think About the Rising Interest Rates

For those home buyers who have purchased a home before, navigating through the mortgage approval process once you have found your home for sale is a little bit easier than for someone who has never purchased a home before.  However, figuring out what the real estate market will do and when and how to buy a home at the right time, the right price, with the best interest rate has been a little like spinning the roulette wheel at the casino over the past 4.5 years.  Home buyers and refinancing homeowners have enjoyed phenomenal interest rates since the interest rate for a 30-year fixed mortgage dropped to 3.3% early in 2013.  This also pushed 10 and 15-year mortgages to as low as 2.5%.  Now there is fear because interest rates have risen by over a percentage point in 3 short months.  So, in order to give you all of the information you will need to make the best choice for you and your family in the home buying or refinancing process, below are 5 practical facts about interest rates, where they’re headed over the next year, and how to optimize your experience in today’s real estate market if you have not already had a chance to capitalize on these interest rates.

1. The Fed bond-buying program, especially the buying of mortgage securities, has kept interest rates at 100-year lows over the past 1.5 years.  Because of the stabilizing economy and the federal deficit, “all good things must come to an end.”  In other words, the Fed cannot continue to keep purchasing these bonds.  The buying must stop, and the economy must learn to survive on its own.  So, the 3.3% on a 30-year fixed will most likely be a thing of the past with perhaps, maybe a drop back down to this rate here and there in certain market conditions.  However, you, as a home buyer, must mentally allow yourself to still enjoy the current interest rate.  Right now, the interest rate for a 30-year fixed mortgage is around 4.5%.  Predictions state that it is not expected to rise above 5% at least until the end of 2014.  So, interest rates are still historically low, and they will make a home payment affordable.

2. If you purchased your home even in 2005, you may have enjoyed an interest rate of approximately 5.75%, so refinancing your home and incurring closing costs may not be the right move as interest rates go up.  However, if you are a homeowner who had a home which lost its value in the crash, you should definitely talk to your Realtor as to the current value of your home.  Home values have been on a steady rise, and most markets are reporting home pricing gains each month.  At least 850,000 homes gained back their value because of a stabilizing real estate market in the first quarter of this year.  So, refinancing this type of loan at these interest rates would still be a good idea.

3. Don’t panic just yet that rising interest rates will bring the housing recovery to a screeching halt.  While not ideal for either home buyers or builders, interest rates have to rise in order for the Fed to “stop the bleeding” of the government theoretically “bailing out” the housing industry by buying bonds.  It would take a rise of about 3% to see the housing market negatively impacted by rising interest rates.  Refinances and purchases may slow down slightly as the rate climbs, but once it stabilizes over a period of months, then people interested in buying a new or previously-owned home will have the confidence needed to do so.  At best, home buyers should take advantage of the rates now and go ahead and “take the plunge” to buy a home before rates go back up.

4. If you don’t know anything about financing a home, then you will want to make sure to ask your banker or lender about locking in your interest rate.  Typically, there is no charge to lock in at 45 or 60 days.  Refinancing a home used to take 6 – 12 weeks because of all of the new government regulations on loans, but that time period has been drastically reduced as banks and lenders have grown comfortable with the new system.  If the institution you are using to get your mortgage takes a long time to process loans, you should find out what the charge would be to lock in for a longer period of time – 90 – 120 days.  Have your loan officer crunch the numbers to see if it is in your best interest to pay for a rate lock to save money in interest over the life of the loan.  This is a service they should provide you.

5. Loan packages since the Recession have been greatly simplified because the interest free / pay later type of loans no longer exist.  However, there are still fixed-rate loans and the ARM (Adjustable Rate Mortgage) out there you will need to choose between.  If you have never had an ARM, or if this is the first time you are buying a home, the main thing to think about when it comes to getting the lower interest rate which an ARM offers is how long you are planning to own the home.  If your purchase is temporary because of your job or because you know you will be “upgrading” in a few years, then the shorter time period you plan on owning your home, the better idea it is to get an ARM.  ARM’s typically have a much lower interest rate and only allow an increase of 1% each year, while not letting the rate go higher than a stated high interest rate or “cap.”  Also, if rates go down, then so does your interest rate in some cases.  However, when you reach your “cap,” and you are still in your home at a higher interest rate, that is how you lose money and pay more interest with an ARM.  So, when choosing the loan which is right for you, consider the amount of time you will be staying.  If you plan on staying “forever,” you will want to go with a fixed-rate loan.

Be smart about interest rates, don’t panic; the housing market will still thrive at current market rates for quite some time.

 Click Here to View This Blog on Our Website.

Click Here for the Source of the Information.

Thriving West Bank Community for New Home Construction

One of the many perks of living on the “high ground” of the Mississippi River is that the space to build new construction homes or business is very condensed and highly valued.  This is particularly seen by the inexhaustible amount of homes that have been built in the Greater New Orleans area.  Through a rich cultural history, New Orleans has seen its streetscapes and new home construction defined by German, Spanish, and French influences.  In a reflection of this construction development, neighborhoods in this productive city in Southeast Louisiana were also developed based on race, culture, income, and status.  The term French Creole architecture stems directly from the Creoles who established, occupied, and thrived in their own sector of the city of New Orleans on the East Bank of the Mississippi.

New Home Community
Not to be outdone, the West Bank of New Orleans also established an unprecedented and condensed development of new home construction as well as commercial and industrial construction in and around cities such as Terrytown, Gretna, Harvey, Marrero, and Westwego.  All of these productive cities seem to “hug” the crescent in the Mississippi River because the ground right next to the river is considered high ground.  This is the same reason that the French Quarter has never flooded after levees were installed on the Mississippi River – it is the highest ground in the city.  Another new home construction community on the West Bank of New Orleans, just outside of Gretna, Terrytown, and Algiers that has never flooded is the Parks of Plaquemines.  This master planned development features new, custom home construction with community amenities such as private streets, gated entrance, a park & trail system, a swimming pool, tennis court, and tot lot / playground.

Lower Cost to Live Close to New Orleans
In fact, this subdivision is a thriving west bank community for new home construction, and it only gets better.  New Orleans is known for having a high cost of livability.  In other words, being able to afford to buy a new home in New Orleans is challenging because of the high cost of land taxes, utility and sewer rents, and the cost of living in general.  The good news about the neighborhood Parks of Plaquemines is that this community is located a mere 10.2 miles from the Central Business District (CBD) in New Orleans, LA. This means that if you are working in a corporate location in downtown New Orleans, you only have to commute approximately 20 total miles to and from work while saving a huge amount of money on your cost of living expenses.

Lower to No Flood Risk
The subdivision itself just happens to sit on high ground near the river as well.  And, don’t just take our word for it,  once the new FEMA flood maps are adopted, the entire neighborhood will be taken completely out of the flood zone.  Plus, as mentioned earlier, the Parks of Plaquemines has never flooded, not even during Hurricane Katrina.  In addition to its amazing location and flood zone benefits, our community also is located in a parish which has a school district which was just ranked 8th highest in the entire state of Louisiana.  The parish achieved a enough points to move it from a B grade last year to an A grade this year.  The school’s 2014 annual district performance score was 104.8 overall out of 150 compared to a 95 last year.

So, if you are interested in owning your own little piece of high ground along the Mississippi River in New Orleans, Louisiana, you should definitely check out the Parks of Plaquemines, just minutes from all the city has to offer without the cost, flood risk, or expense of private education instead of utilizing the public school system for your kids. To take a tour of the new home construction continually being done at our subdivision, Visit the Parks of Plaquemines Today!  Call 504-364-2350 or E-mail Info@TheParksLifestyle.com.

Click Here to View This Blog on Our Website.

Construction and Development for Commercial and Retail Shops in New Orleans East

Residents of the West Bank may soon have something new to do on a summer afternoon in New Orleans, Louisiana, if Tipitina’s owner Roland von Kurnatowski and his business partner, Eric George have anything to say about it.  They are currently in negotiations to develop and construct a new water park and outdoor music venue on the 4.5-acre plot of land on Lake Pontchartrain in eastern New Orleans.  This acreage is where the Bally’s Riverboat Casino stood for many years before Hurricane Katrina forced it to close and move out of the state. The venue will not only sport the water park and outdoor amphitheater – designed to seat a 5,000 capacity – but there will also be construction and development for commercial and retail shops and venues on the west side of the proposed site.  At the south end of the lakefront development, there could be a two-story building with room for a community market downstairs and a restaurant on the second floor.



The construction project has been the brainchild of Studio Network-Lakefront LLC, which is the company created by Tipitina’s owner and Dr. Eric George, a prominent New Orleans orthopedic surgeon.  These men have a vested interest in the culture and heritage of New Orleans because they also purchased the Orpheum Theater last year and immediately began renovations on the structure to bring it back to its former glory.  They pledged to put a total of $13 million into that project.  Since construction on this building in New Orleans is moving along as scheduled, the Louisiana Philharmonic Orchestra has agreed to start performing there when the theater is completed later in the year.  So, complete renovations and seemingly impossible construction projects seems to be this pair’s forte, and New Orleans East’s lakeshore are will benefit from their expertise.

The history behind this 4.5-acre plot of lakefront land is that nothing was done to restore it once Hurricane Katrina destroyed it.  With the “separation of powers,” in 2010 which created an actual Levee Authority which would oversee all properties along the levees, the land was assessed as hopeless because of the cost of the taxes and the deterioration of the property.  Once this was realized, this and other properties were offered to the public for bids.  The only bid on this property was from Studio Network-Lakefront, LLC.  Their proposed project would be named Tipitina’s Festival Park and would include the following:

• An outdoor amphitheater with a 5,000 capacity
• A lazy river and splash park
• Water slides and zip lines
• A two-story, covered boardwalk with shops
• The conversion of the old riverboat terminal into an open-air market

Development and construction in New Orleans is always welcome especially after Hurricane Katrina, but it is enlightening and encouraging to have such an innovative concept introduced by Tipitina’s owner and his business partner who seem to have a soul-reaching interest in rebuilding and renovating New Orleans East on the lakefront of Lake Pontchartrain.

 Click Here to View This Blog on Our Website.

Click Here for the Source of the Information.

Strengthening in the Suburbs Is Good News for New Orleans Metro Communities

Wade Ragas, real estate consultant and owner of Real Property Associates continually analyzes sales reports for new homes and previously-owned homes, as well as new home starts, new home trends, the monthly supply of homes for sale on the market, and many other real estate related information in order to present his findings to local Realtor and Builder Associations.  These types of informative seminars aid in the strategic planning of builders and Realtors for their quarterly planning.  Ragas recently gave a talk to the New Orleans Metropolitan Association of Realtors for his twice-yearly report and announced the median home prices have pretty much stayed the same in the Greater New Orleans area from 2013 – 2014.

Regular home sales in the Greater New Orleans area showed a cost of $153/square foot with an average cost of $309,533 which is actually down from the major price increases during 2012 – 2013 where the average price rose to $325,348. A 3.1% increase in price year-over-year was reported compared to an 8% increase from 2012 – 2013.  Another reason the cost was so much lower were that the homes sold reported lower living square footage, so homes sold overall were smaller.
The most drastic change in statistics that Ragas reported was that the cost to purchase a home to renovate or “flip” it has increased on average 40% year-over-year for the same time period.  The average price jumped from $52,669 to $71,845 to purchase a home in need of a renovation.

The most important aspect of his study of real estate statistics for the Parks of Plaquemines, located just 10.2 miles from the Central Business District, showed that strengthening in the suburbs is good news for New Orleans Metro communities.  Home sales in the 8 parishes around New Orleans increased by 7.5% from 11,160 – 12,000 with home sales in Jefferson Parish, the parish adjacent to the Parks of Plaquemines up by 2.3%.  The cost per square foot to buy a home in Jefferson Parish was approximately $104 / square foot which is only slightly off the $105 / square foot to buy a home pre-Katrina. Ragas also reported that most of the high volume of home sales in Jefferson Parish was on the West Bank, which is a sign that real estate on the West Bank may finally be taking a turn upwards from the real estate slump during the Recession.

Prices going up are not necessarily a bad thing, and recovery in the suburb, West Bank areas of the Greater New Orleans area means that people are moving back into our communities and may be interested in purchasing a new home for sale in the Parks of Plaquemines, right next to Jefferson Parish on the West Bank and an easy commute to New Orleans for work.  To learn more about our homes for sale and lots for sale, Contact Us at 504-364-2350 or E-mail Info@TheParksLifestyle.com.

 Click Here to View This Blog on Our Website.

Click Here for the Source of the Information.