U.S. Home Builders Beat Expectations for July

 According to data from the Census Bureau home building increased 3.9% in July from June. This stems from the buyers’ interest in new homes since the market is so low on existing home inventory. New home starts bumped up to a seasonally adjusted annual rate of 1.452 million which beat out the expectation from the Census Bureau of 1.448 million.

Single-family homes rose 6.7% in July with a seasonally adjusted annual rate of 983,000. This makes the number of units started up to 5.9% from July of last year.

“Buyers embraced new homes in the first half of this year as a welcome alternative to the massive shortage of existing homes. Homebuilders responded to the rebound in demand by ramping up production in the first five months of 2023 and rolling out incentives. The latest readings show activity skewing noticeably toward the single-family space,” said George Ratiu.

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Is the Housing Market Both a Seller’s and a Buyer’s Market?

 The pandemic hit and the housing market went crazy with buyers. In fact, many potential home buyers felt desperate and defeated due to all cash offers and multi-bidding wars. Those in the industry say that this is not the case anymore as the market is starting to become an even playing field.

“Those moments of…..there are 20 offers coming in are gone now. Buyers can take a bit more time . The buyer has a little bit more power or control on their side, ” says Jay Farner with Rocket Mortgage.

This is the 10th month in a row that home sales have dropped due to the rise in the mortgage rates. This has been the longest decline in home sales since around 1999. The market is not as hot as it was during the pandemic for sellers, but still is not a buyer’s market either due to the still historically low housing inventory.

“I’d say it’s an even market. A few years ago, it was clearly a seller’s market. We were doing verified approvals, people were getting a full underwrite within 24 hours to ensure they could present almost like a cash buyer to make an offer on that home. Now, they have a bit more time. They have more homes they can look at…..We’re not seeing 15 offers on one home,” replies Farner.

Even though the home prices are slowing down, they are not dropping. Since the demand is decreasing a bit, so is the supply. Higher mortgage interest rates have caused a slump in the market due to high inflation. The 30-year fixed at the week ending January 12 was around 6.33% which was down from last fall but up from this time a year ago.

“A recession here is on the horizon. People are changing their spending habits, credit card debt is rising, savings and bank accounts are dropping. All of those things tell me that we’ve set the table for a recession here in 2023,” says Farner.

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Why House Hunters Will Be Ready To Buy In The Next Six Months

 According to a survey done by Realtor.com, 46% of potential house buyers said they were planning on purchasing a home within the next six months. This study looked at those who accessed listings and search results of homes on the site. The survey justifies that although we look like we are in a recession and the 30-year fixed mortgage rate is close to 6%, this is not detouring buyers in the market. This share of buyers reported is actually higher than reported in 2019 even with mortgage rates reaching the highest level since 2008 and home prices increasing.

Many potential home buyers are looking at the market as an advantage. Rising inventory levels are bringing more options for buyers to find a home within their budget. It is reported that two in five buyers feel that the U.S. economy is already in a recession but it will have no effect on their decision to purchase a home in the near future. Close to 27% of home buyers are more likely to purchase while the economy is in a recession. This figure is up 24% from what was reported in 2021 although there are many potential home buyers that are scared of the current market. In fact, the share of buyers who say they are more than likely not going to purchase a home during a recession rose from 5% to 6.5% this year.

The housing market is definitely tipping the scale from a sellers’ market over to a buyers’ market. Those in the industry said there are fewer buyers who are being outbid going from 12.6% to 9.4% from this spring to summer. The share of buyers who report being overbid on a home has decreased as the market has begun to correct itself

Even though there are home buyers who are willing to purchase in an uncertain economic time, it is still a sellers’ market. Twelve percent of first-time homebuyers are still being outbid in today’s market. Two in five first-time home buyers are also having a hard time finding a home within their budget. Currently, the median price of homes in the U.S. was $435,0000 according to Reatlor.com. This summer was at an all-time high of $450,000! Twenty percent of first-time homebuyers also said they are having a hard time buying because of their credit score.

If you are a first-time homebuyer or in the market to purchase a home, you will want to work with a local real estate agent who can help you navigate these uncertain waters. A local agent can help you find a home in your price range in your desired area.

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Plans For A New Subdivision in New Orleans East

 

James Smith of Imperium Estates LLC is a developer which has plans to build a subdivision on 36-acres close to the former Six Flags. The plans include over 116 homes that will be built in several different phases close to the intersection of Interstate 510 and Chef Menteur Highway, just south of the Eastover neighborhood.

“The homes are beautiful,” said Dawn Hebert, chairperson of the East New Orleans Neighborhood Advisory Commission, a group that represents several homeowner and neighborhood associations in the east.

The neighborhood has a few obstacles, including the property's current zoning. The city's master plan has the property zoned for an industrial park. Luckily District E Council member Oliver Thomas is backing the idea of changing the zoning to residential. He feels the master plan does not match the needs of New Orleans East development or the wishes of surrounding residents and landowners.

“I just thought it was appropriate in terms of what they wanted to do to fit to where that community was going,” Thomas said. “I haven’t seen or heard of anyone submitting plans for light industrial development out there.”

Herbert explains that the industrial designation for the area was originally placed in 1970. In five decades there has been zero interest or demand for an industrial park.

“I think it’s outdated zoning because, since Katrina, more homes have been built over there,” said Hebert.

“You don't have a long line of people trying to invest out there,” a neighboring property owner, Robert Charbonnet.

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Riverfront Hotel Planned for New Orleans Convention Center Will Still Happen

The Ernest N. Morial Convention Center has chosen AECOM-Broadmoor to oversee their $557 million project to upgrade the complex. This is the first upgrade project since the convention center was constructed in 1984. The center has already tapped into the budget and spent $115 million on updates through the linear park which runs along the 11 blocks in front of the complex.

"We’re looking forward to digging into this project, collaborating with the entire community of trades and professionals involved to create a highly functional, beautiful, 21st century Morial Convention Center for everyone who visits it," said AECOM-Broadmoor's spokesperson Amy Ferguson.

Now the once cancelled hotel that was part of the project has been restored. Texas-based Matthews Southwest will take on the 500-room hotel. The hotel is just part of the new additions at the upriver end of the Convention Center. The multi-acre area will include retail, residential and an entertainment district.

The new hotel will include 13-stories along with a 28,000 square-foot festival deck that looks out onto the river. The hotel will sit on the South Front Street side and be connected to the Convention Center. The elevated pedestrian walkway that connects the hotel to the center will include restaurants and retailers.

This is great news for the city of New Orleans as its convention center is the only one in the country that does not have an attached hotel. The new project will definitely help New Orleans compete for event business with other convention centers throughout the country.

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Steps To Follow When Buying A Home

 

Purchasing a home is a big life step and with any big life change, it is always best to be prepared and knowledgeable in order to make the right decision. Below are five simple steps to take when buying a home.

1. Organize your finances

The first major task in this step is to save for a downpayment. Most conventional loans require a 5% - 20% downpayment at closing. In fact, a conventional loan will require PMI(private mortgage insurance) if you put less than 20% down. A good incentive is the larger the down payment the better rates a lender will offer. Putting a larger downpayment on a home will allow you to save money over the life of the mortgage loan.

Another factor that will determine your interest rate and the type of loan you qualify for is your credit score. A credit check is required by lenders in order to offer you a mortgage. Remember lenders do perform hard inquiries on your credit report which will impact your credit score. If you are shopping around for mortgage lenders, ask them to do a soft inquiry on your credit check so it will not impact your score.

You will also want to save up for closing costs which will be about 3% of the total home price. These costs include the loan, underwriting, and other fees associated with the purchase.

2. Determine how much house you can afford

When sitting down to determine how much you are able to afford on a house, look at your debt-to-income ratio. A lender looks at your debt-to-income ratio. Basically, this is comparing your income to your debt and usually, it has to fall under 43% to qualify for a mortgage. An example would be if your monthly debt totaled $3,000 and your monthly income is $10,000 your DTI would be 30%.

Not only should you understand your DTI but also how a mortgage payment is calculated. A monthly mortgage payment includes the principal payment (goes toward the amount you borrowed), interest, escrow (property taxes/homeowner's insurance) and if applicable PMI. A mortgage calculator is a great way to become familiar with the cost associated with a mortgage.

3. Understand your mortgage

There are several pieces that lenders use to determine your interest rate. The better your credit score the better your interest rate. Someone with a lower credit score could have a 1% higher interest rate on the same mortgage as someone with a higher credit score. The length of the loan also plays a factor. In some instances choosing a 15-year loan over a 30-year loan will allow you to get a lower interest rate. The Federal fund rate also determines the interest rate. If the federal funds rate is low, it means it does not cost a bank as much to borrow money. Those savings are passed to you from the bank in form of a lower interest rate. Different lenders will offer different rates so shop around for the best rate. A primary residence will also be in favor when it comes to a lower rate. A secondary or vacation home will bump the interest rate up.

Conventional loans have stricter qualifications than an FHA loan. An FHA loan allows for a smaller down payment and less stringent qualifications. This is a great way to go if you are a first-time homebuyer. To compare, a conventional loan minimum credit score is around 620, where an FHA minimum credit score is 500 - 579.

As mentioned before, PMI can increase your monthly payments. If you want to avoid PMI you have to put at least 20% down. If you cannot put 20% down, PMI can be removed off a conventional loan once you have a built-up 20% equity. On an FHA you will either have to pay PMI for 11 years or the life of the loan. This depends on the loan amount, length of the loan and the loan-to-value ratio (LTV). If you do decide to go with an FHA, you will also be required to have Up Front Mortgage Insurance (UFMI). This will be 1.75% of the base loan amount and can be paid at closing or rolled into your monthly mortgage payments.

4. Get pre-qualified or pre-approved for a mortgage

There is a difference between getting pre-approved vs pre-qualified for a mortgage. Sellers like to see a pre-approval letter from a mortgage lender. This means the buyer is serious and can afford the home.

• Pre-qualification is a quick process that tells you roughly how much you can afford to spend on a home, based on your self-reported income, debts and assets.
• To obtain pre-approval, you’ll have to provide verifiable financial documents to the lender. The lender will review your credit report, financial history, income statements and more to determine how much they would be willing to lend you.

5. Look for a property and make an offer

In today's market, there are more buyers than sellers making it hard for a buyer to sit and think on it overnight. If you like the home and it fits all your criteria, submit an offer.

A Realtor can help you with the process and help you navigate this hot market. They can negotiate your price and terms as well as recommend mortgage brokers, title companies and inspectors. A Realtor will be with you from your search to the closing.

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Land on the West Bank, Close to New Orleans

Sometimes, the southern region of the crescent in the Crescent City of New Orleans gets overlooked for its potential to offer benefits for those home buyers who are interested in being near New Orleans but not necessarily living in the city of New Orleans.  Land on the West Bank is still available in an established, master planned community just over the Intercoastal Waterway in Plaquemines Parish.  Plaquemines Parish is an odd-shaped piece of land that extends from the “base” of New Orleans all the way down to where the land seems to disappear into the marsh.  Because of this, the parish gets a reputation for being flood prone or “too far south” to be livable for those looking to commute to work everyday in the Central Business District (CBD).

At The Parks of Plaquemines in Belle Chasse, Louisiana, we offer the best of both worlds.  You can live in a parish that has significantly lower bills (taxes, city rents, utilities), in a gated community, in a safe environment (only one way in or out of the parish from our location with low crime), only 10.2 miles from downtown New Orleans.  Also, a HUGE perk of choosing to live just outside of the city limits is the fact that Plaquemines Parish has one of the best rated school districts in the state of Louisiana, so if you are moving with your family, there is a guaranteed quality school district to send your children.

The subdivision itself also has a lot to offer.  In addition to being able to buy your own lot and custom build your new home (if you wish); you can also enjoy walking and hiking trails carved out around the community.  Inside the community we have built a community swimming pool, tot lot / playground, and tennis courts as amenities for our new home buyers.  New Homes are available now at The Parks of Plaquemines, and we are slowly building out the community with both traditional housing as well as new construction garden homes in our Villas Neighborhood.

Our master planned neighborhood is located near everything the West Bank in Jefferson Parish has to offer with shopping, dining, and entertainment locations, the day-to-day office visits that are “life necessary” such as doctor’s and dentist’s visits, veterinarian appointments, and even home business visits such as accountants and lawyers.   There are two ways to access New Orleans – across the Crescent City Connection bridge or by ferry at Algiers Point.  New ferry boats are in the works because of a bill signed recently by the governor to get them operational as well.

Real estate in New Orleans is scarce, and prices are higher because of supply and demand.  If you are interested in living in an established neighborhood, you may want to consider living a little bit farther away in the comfort of a beautifully maintained and quality built subdivision such as The Parks of Plaquemines.  Contact Us at 504-364-2350 or E-mail Info@TheParksLifestyle.com for more information.

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Single-Family Homes in the Greater New Orleans Area

New home starts for single-family homes in the Greater New Orleans area are on the rise, according to Jon Luther with The Home Builders Association of Greater New Orleans.  New construction starts were at 1.21 million last month, and that included single-family home starts of 600,000 – 700,000.  Between commercial building conversions and new construction, apartments are leading the race on new construction in New Orleans simply because the opportunity to build new homes is more limited within the city limits because of the lack of land to build.  However, even if builders cannot start and build out full-scale, new home developments, there is plenty of new construction going on in the city

in the form of tearing down blighted housing and even taking an existing home “back to the studs” and starting over again as a complete rebuild.

“Anytime you see 600,000 to 700,000 new (single-family) starts, home builders are going to be pretty damn happy,” Luther said. “They’re the best numbers we’ve seen in about 10 years.”
According to Luther, the best chance that New Orleans has of starting and building a large scale development would be to utilize the 5,000 acres of land near the Avondale shipyard.  Officials in Jefferson Parish have had several meetings about rezoning this property which is owned by several different owners.  If they were to release the land for building purposes, New Orleans would be able to develop and build either a Traditional Neighborhood Development (TND) or similar master planned community on this property.

Another obstacle for providing new homes for home buyers on the Southshore in New Orleans is that it is difficult for builders to provide housing for first-time home buyers.  According to Luther, the appraisal system in New Orleans recently went through an overhaul to ensure that appraisers knew how to appraise a new home for sale in New Orleans because the values given during appraisals were losing local builders a lot out of their profit margins.  Also, with the recent concessions by the

Department of Housing and Urban  Development in lowering the down payments on FHA loans for first time home buyers, there is now a possibility of Millenials being able to move out of apartment living in owning their own home – as long as affordable housing can be built in New Orleans.

If you are interested in living close to New Orleans but not having to “pay for it” with higher taxes, higher utilities, and city rents, you should consider moving to The Parks of Plaquemines, a masterplanned subdivision located just 10 miles from the Central Business District in New Orleans, across the Intercoastal Bridge.  With a convenient location, safer neighborhood proximity, and a little bit more lot space on which to play, The Parks of Plaquemines offers lots for sale and homes for sale at competitive new home pricing.  Contact Us at 504-364-2350 or E-mail Info@TheParksLifestyle.comInfo@TheParksLifestyle.com for more information.

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