The Louisiana real estate market enjoys some of the most distinct qualities of any state in our nation. It is the only state with political subdivisions called Parishes (local governments that are equivalent to counties). Since many of the state’s lands were formed by Mississippi River sediment washout, Louisiana contains large areas of deltas, swamps, and coastal marshes. Like Florida’s everglades, these ecosystems contain species that are native only to Louisiana. Perhaps what makes Louisiana so unique is that the state’s urban areas are rich with multicultural and multilingual heritage. Driving through the state, one will experience a region that is strongly influenced by 18th century French, Spanish, Native American, and African cultures. Because of these distinctions, tourism is extremely important to the state’s economy, earning an estimated $5.2 Billion annually.
Louisiana also produces agricultural products including seafood and cotton. Roughly 90% of the world’s crawfish supply comes from LA. Offshore drilling continues to help the local economy (although falling oil prices could negatively impact home prices by late 2015 and early 2016). The port of South Louisiana between New Orleans and Baton Rouge serves as one of the largest ports in the Western Hemisphere in terms of shipping volume and the 4th largest in the world. Recently, the state has become a fixture in the film industry. Many experts refer to it as the “Hollywood South” due to state financial incentives and aggressive promotion.
The Louisiana housing market took a major hit following Hurricane Katrina in 2005. But officials are planning the construction of 5,000 homes that are affordable (between $100-$150K) in the next few years, and Louisiana Realtors are expecting continued growth despite the impact of lower oil prices on the state’s economy. Some of the factors they cite for their optimism are low housing inventory, interest rates, and a diversified economy that is driving up demand. Steven Herbert of Coldwell Pelican Banker Real Estate says that new single-family real estate continues to be hot this year. New construction sales totaled $278 Million in 2014, up from $228 million the year before. “We feel confident that the real estate market will continue to improve as it has in 2014 moving into 2015 and beyond,” says Morris. “We believe it’s the right time for individuals to invest in real estate, whether it’s residential or commercial real estate.”
Case in point, the 2015 Housing Market in Louisiana is very healthy, scoring an 8.5 out of 10, according to the Market Health Index. This gauges the current health of the Louisiana real estate market relative to the other markets across the nation. This index uses up to 10 metrics that include capturing past and projected home values, frequency of foreclosures, foreclosure re-sales, mortgage delinquency, negative equity, and the rate of home sales. Click here to compare this year’s market to the 2014 Louisiana housing market.
Influencing Factors for the 2015 Louisiana Housing Market
- The median home value in Louisiana is $143,700. This is a 1.8% increase in just the past year. Housing market predictions have this rising another 2.9% in the next year.
- As of February of this year the median list price for homes in Louisiana is $174,000.
- According to an average taken from rental sites like Zillow, Trulia, and Craigslist Louisiana has a median rent price of $1,200 for all homes. Zillow has the national average at around $1,400. One bedroom apartments list on average for $950 a month, and 2 bedrooms for $980.
- Louisiana has a 4.6% mortgage delinquency while the national average is 6%.
- Homes in the Louisiana real estate market spend an average of 99 days on Zillow as of May 31, 2015. This is down from 125 days back in February 2015. The less time a home is listed on the market is an encouraging sign for the housing market.
- Of all Louisiana listings 10.92% have had a price cut. This is down from 15.16% from a year ago. Sellers are getting closer to their asking price than they were previously. Louisiana is inching towards becoming a sellers market.
- Cost of living in Louisiana is 6.2% lower than the national average. This and the low state taxes are incentives for homebuyers and real estate investors.
Best Places to Live in Louisiana
“What we are seeing, particularly in Lafayette, is that the market is continually growing,” says Norman Morris of the Louisiana Realtors Association. Lafayette LA real estate is seeing an increase despite lowering prices in two of its key industries, oil and gas. This is due to its education, medical, and technology industries. Plus record breaking retail sales in Lafayette show that commercial business is doing well in the city. In 2014 Lafayette had 3.72 months of residential inventory for sale. In 2013 there were 3.93 months, and in 2012 there were 5.16 months of inventory; all encouraging signs that the market continues to improve. The median home value in Lafayette is $157,000, higher than the statewide median of $143,000. One other factor that could impact Lafayette real estate in the near future is the proposed unified development code. This code is a guide for property developers that includes new zoning and construction regulations. CEO of the Realtor Association of Acadiana Susan Holliday thinks that this will ultimately be good for the local market. “The house sales in the long run will maintain their value.”
To the northwest of Lafayette lies the city of Shreveport. According to Zillow Shreveport LA real estate has a median home value of $90,700. This is a 2.3% increase in the past year, and housing market predictions have this number rising 4.5% in the next year. The most expensive neighborhoods in Shreveport are Hyde Park Brookwood and Southern Hills with a median home value of $122,000. More affordable neighborhoods Mooretown and Hollywood Heights both have a median home value of $43,800. Shreveport has a median rent price of $850, and Shreveport Metro has a median rent price of $1,059.
According to Nationwide Senior Vice President and Chief Economist David Berson, Baton Rouge LA real estate is “clearly the best” housing market in the state. He touts the local job growth as being the main reason. The Baton Rouge metro area posted a 2.5% job growth in the first quarter of this year compared to last year. Baton Rouge boasts a large educated population with an incredible 33% of its residents having at least a bachelor’s degree, and the annual income for a family of four at $95,796. Because of this the city has some of the most expensive real estate in Louisiana. Median home values in the city are around $160,000. The median rental prices are more reasonable, at $816, most likely to accommodate the large amount of college students and grads that inhabit the city. Over half of the city’s population is under the age of 35 years old.
Known for amazing architecture, culture, and the annual Mardi Gras celebration New Orleans LA real estate has seen a turnaround in recent years. Thousands once flocked to the “Crescent City” each year to take part in the festivities, but since Hurricane Katrina slammed the city in 2005 city officials have been busy rebuilding New Orleans one structure at a time. Home prices dropped dramatically following the storm. In 2005 New Orleans had an average home price of $143,686. In 2006 that number dropped to $82,620. But since Katrina hit, New Orleans has done a great job of rebuilding.
According to Zillow New Orleans LA currently has a median home value of $163,300. This isn’t much higher than a year ago but forecasts have New Orleans home values rising 2.9% in the next year. If searching on Trulia New Orleans currently has 1,319 resale and new homes. This includes 15 open houses and 1,457 homes in the foreclosure process. Some of the popular neighborhoods in New Orleans are the French Quarter and Little Woods, with average listing prices of $786,100 and $125,164, respectively.
New Orleans boasts a diverse group of ethnic cultures, and since the diaspora following the storm many young, single, and educated people have begun to inhabit the city. New Orleans has both the amenities to entertain its residents and a great public transportation system to accommodate their travel needs. Many of the city’s residents use the bus for daily commutes, thus resulting in a large reduction of pollution and traffic. New Orleans also has an average annual income of $106,000 for a family of four, which is some of the highest in the state. One downfall for having high incomes and a youthful population is that rental prices are on the high side. Young adults tend to rent before purchasing, thus rental units are in high demand.