NEW ORLEANS (WVUE) - The real estate market in Southeast Louisiana is grappling with high interest and insurance rates, leading to a decrease in buyers heading towards the year’s end.
“The time to buy is when nobody wants it. The time to sell is when everybody wants it and this is the time when there are few buyers in the market and there’s some, I hate to say it, desperate sellers but there are,” said real estate analyst Arthur Sterbcow.
Sterbcow says the current market dynamics, with fewer buyers and desperate sellers, present a unique opportunity for investors.
Angela Davis says her Uptown rental has been on the market the entire year she’s lived there.
“With (rates) being so high right now it’s not a surprise that people are not really looking,” she said.
The driving force behind the sluggish market is the tandem effect of soaring interest and insurance rates.
Louis Faust, president of the Southern Insurance Agency, says high insurance rates - driven by recent storms - could stabilize as more carriers enter the region.
“No matter if the storms hit the Florida or New Orleans area, it’s the same insurance carriers that are writing in the same geographic areas,” Faust said. “When we have more carriers in the local area, those prices start driving down. We won’t see those prices decreasing anytime soon on the residential market front.”
Faust says proactive measures can mitigate risks and potentially result in insurance credits.
“With the fortified roofs, we are looking at some of the carriers giving some credits to those individuals who are participating in that,” he said.
Sellers are “frozen” in the market, Sterbcow says, reluctant to get out of a fixed 3% mortgage while interest rates remain around 7%. He estimates those rates may drop to 6% by the end of 2024.
Inflation and slowed new construction have further contributed to a decline in property transactions.
“You can look at the mortgage companies, the title companies, and their volumes are down by 30, 40, 50% in terms of closings,” Sterbcow said.
As some landlords respond to the climate by raising rental rates, the appeal of renting becomes increasingly attractive in a market dominated by uncertainties and rising costs.
See a spelling or grammar error in our story? Click Here to report it. Please include the headline.
Subscribe to the Fox 8 YouTube channel.
Copyright 2023 WVUE. All rights reserved.
ncG1vNJzZmivp6x7p7vXcaOirpVjsLC5jmtna2tfZn9wfpZoq6KllWKvtsWMpaauoaOerq%2BtjKGmrquZo7RuucCrop6sXai5sMPEnWSbsV2dtqi0jKKlrZ2imsC1ecinqq6qkaOwpnnRmqueq18%3D