Report: Pandemic Drives Demand for Higher-Priced Homes

NEW ORLEANS – The annual report from the Gulf South Real Estate Information Network released Monday by the New Orleans Metropolitan Association of Realtors underscored what New Orleans homeowners and home buyers have known for most the year: the COVID-19 pandemic has ignited the residential real estate market.

It didn’t start out that way, however.

“The 2020 housing market was unexpectedly turbulent towards the end of the first quarter,” said the report’s authors. “As the first wave of COVID-19 hit in the spring, housing market activity slowed substantially before staging a dramatic comeback just a couple months later.”

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Ultimately, though, the two factors that led to the sellers’ market are record-low mortgage interest rates combined with a “strong drive by many buyers to secure a better housing situation – in part due to the new realities brought on by COVID-19,” according to the report. “Many segments of the market experienced a multiple-offer frenzy not seen in the last 15 years or more.”

NOMAR said pending sales in the 10-parish greater New Orleans region increased 10.5 percent, closing 2019 at 16,268. Closed sales were up 7.1 percent to finish the year at 15,537. And home prices were up compared to last year. The overall median sales price increased 7.1 percent to $235,000 for the year. Single Family home prices were up 8.6 percent compared to last year, while Townhouse-Condo home prices were down 8.8 percent.

Notably, the demand for homes in the high price range was greater than more affordable options. The number of homes sold in the $345,000 or more price range grew 20.3 percent to 4,171 homes. Homes sold in the $148,999 or less price range were down 17.1 percent to 2,689 homes.

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Sellers received, on average, 97.5 percent of their original list price at sale, a year-over-year improvement of 0.3 percent.

Looking deeper into 2021, the report suggests “buyer demand will remain elevated and tight inventory will continue to invite multiple offers and higher prices across much of the housing inventory. Mortgage rates are expected to remain low, helping buyers manage some of the increases in home prices and keep them motivated to lock in their housing costs for the long term.”

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