2024 NOMAR Economic and Real Estate Forecast to explore creative solutions and adaptation in New Orleans' residential and commercial real estate markets

Both buyers and sellers in the New Orleans real estate market are highly familiar with disruption. From hurricane damage to rising insurance rates, navigating challenges in order to secure deals can feel daunting. However, local real estate professionals say that amid these obstacles, more people are developing creative solutions that they anticipate will lead to growth and greater stability in the future.

“In 2023, people were a little afraid. But buyers have been sitting on the sidelines a little too long,” said Cameron Lombardo, president of the Commercial Investment Division of New Orleans Metropolitan Association of Realtors ® (NOMAR). “We’re starting to see some sellers get realistic with their expectations. I think that’s really going to open up the market as a whole.”

The new normal in the industry will be a key topic at NOMAR’s 14th Annual Economic and Real Estate Forecast Symposium. This year’s event will take place on October 10 at the Jefferson Performing Arts Center. This year’s theme, “New Orleans: Growth, Stabilization, or Disruption?”, will explore key turning points in the current market, the New Orleans housing crisis and opportunities for growth. Tickets are available at nolaforecast.org.

“The Forecast is the one place where leading experts from multiple industries are gathered together to present and discuss real, unbiased information,” said Guy Williams, President and CEO of Gulf Coast Bank & Trust. “It’s gotten better and better through the years. It’s really a can’t-miss educational event.”

The effect of insurance and interest rates on transactions is emerging as a key topic of disruption within the New Orleans real estate market. High rates on both can limit options for some potential home buyers and investors and may prevent them from qualifying for loans.

“For the next 12 to 18 months, we’re hoping that rates will come down and that more insurance carriers come into the market,” said Lauren Bergeron Griffin, a real estate attorney at Crescent Title. “In the past few months, we’ve seen rates drop a little bit, to right below seven percent. If the rates drop a little bit more and get into the sixes, then we’re hoping to see more buying in the future.”

Williams said some buyers have gotten creative if a property comes on the market that seems too good to pass up. It’s something Williams describes as a “mini refi boom,” with buyers intending to refinance in the future as rates drop.

“The phrase we use is, you should marry the home and date the mortgage,” Williams said. “If your family can enjoy it right now and you can refinance later, we encourage people to go ahead and buy the property.”

Danny Douglass, a real estate attorney at Crescent Title, said he’s noticed more first-time home buyers and investors entering the market and paying cash for properties, a trend that started last year and has continued into 2024. Douglass has also noted additional shifts, with more buyers choosing options like tax-deferred exchanges and installment sales to secure the house or commercial property they want.

“Sellers are not dictating the terms as much and are more willing to offer concessions,” he said. “People are trying to find a way to creatively get to the closing table and have the transaction occur, also knowing that, down the road, there might be some options available in a more conventional lending program.”

On the commercial real estate side, the opportunities are plentiful for savvy buyers and investors. Vacant office space throughout New Orleans is at an all-time high as more companies shift to fully remote or hybrid office operations. Lombardo said he has already noticed more commercial purchases for these spaces, as well as warehouse space, as investors look to the future and develop possible creative uses.

“Office is probably the best deal you can get right now for the future,” he said. “This is a good time for buyers to come in and buy some of these under-leveraged properties. In a couple years, they’ll probably get a good return on their investment.”

Lombardo said the timing for these commercial investments is ideal as New Orleans will soon be propelled back into the national spotlight. Superstar Taylor Swift will perform multiple shows at the Caesars Superdome this fall, while Super Bowl LIX will take place at the stadium on February 9, 2025. In addition, Lombardo said ongoing projects like a revitalized River District near the New Orleans Ernest N. Morial Convention Center are expected to boost both local and visitor traffic to those areas in the coming years.

With so many changes continuing to take place in both the residential and commercial real estate markets, experts said there are many steps that those who work in the field can take to position themselves for success.

“Some of the broad patterns that we see are agents who are having to work harder for their clients,” Douglass said. “Agents need to promote what they do and how their activities, their knowledge and their expertise translates into a more successful closing process. Some are concerned that artificial intelligence may replace real estate agents. I don’t think that’s the case, but perhaps agents who use or take advantage of technology will likely replace agents who don’t.”