In the world of real estate, when it comes down to brass tacks, the future lessee or buyer and their expectations of market value often meet incongruously. The New Orleans area has experienced significant activity and attention over the past 7 years and not just through our own hurricanes, oil spills, or fantastic football (next year, y’all – when the city again hosts the Super Bowl – ka-blammy!), but the collapse of the lending world delivered a mighty wollop, as has the recession overall. A vertiable rollercoaster, very much unpredictable. Yes, hurricane season is a season. But even each year’s forecast can be so ridiculous, and as my grandfather used to yell at the evening news more as a taunt and less of a command “Scare the hell out of ’em.” Honestly, he would have made a great Wal-Mart greeter.
The reality is, we make the marketplace, our simple actions and decisions. When area universities consistently exceed incoming freshman classes, paired with returnees, paired with those called and add to it a housing stock largely compromised by floodwater, wind, and rain, the math is done for you. Supply and demand, while ever fluctual, has been mostly on slant here for demand. But the demand has criteria: Of neighborhood. Of dimension. Of proximity to public transit. Whatever is important to those in the market. So on the one hand, the price of a rental or dwelling derives from its uniqueness, but the underlying foundation of any transaction remains ultimately determined by what any given lessee or buyer is willing to pay for it. Therefore and again, we effectively create the market.
The trouble arrives in perception. Newcomers to the Crescent City way more often than not have their expectations capsized for what their dollar will garner – in either rental or purchase. Because back where they’re moving from be it Chicago, Philly, Dallas, where have you, they pay a lot less, for arguably a lot more. And to that I can only offer apples and oranges, and if New Orleans weren’t transforming the way it is, hell yes, you just might even pay less here to live than most other mainstream American cities. Because see, the average American metropolis is not surrounded by water thereby corralling urban sprawl. They are not fresh off the one-two recovery punch of Mother Nature’s summertime extravaganza nor foreign-captained corporate pollution courtesy lax safety standards. They simply are. They subsist. Chicago might have a heat wave, and Dallas may see a twister or two, but these events usually embody the ephemeral.
Numbers. Once a transaction takes place it sets the bar. And then the market follows ordinarily with some slow and decided fashion. When two homes in my neighborhood recently sold for $219 and $254 a foot and on “the other side of St Charles,” I frankly get dizzy. Those numbers can’t be right, can they? But they are. And I would argue more of the same is on the way. No matter the outcome of this year’s presidential election, and no matter if this recession decides to triple dip. Our market – the orange to [insert American city name here]’s apple – will continue to chug along. Why? Those subsequent freshman classes have to live somewhere. True, many leave, but keep this mind and never forget: people are still returning. Still. And that’ll only maybe end but for over a generation.
Let’s be clear though, our market while something of a circus has oodles of opportunity. Yes, million dollar homes in the French Quarter, Garden District, and Uptown are all selling, but in the same breath there exists inventory to say $20,000-35,000 homes of decent housing stock in emerging neighborhoods like Treme, Central City, and Pigeontown. Theses homes may never have even flooded. Ever. They’re likely careworn, some more termitic than others. Investors will flip you a renovation here and there, or you yourself can risk and dig in to the raw canvas. And again, the market grows. So when we as consumers have something to say over pricing and prices, and fingers may go wagging, I would argue there is no bad guy here and the market has become what we have all made it. Or, if you prefer and after a fashion, as Pogo is known for, “We have met the enemy, and he is us.”
Jean-Paul Villere is the owner of Villere Realty and the Du Mois gallery on Freret Street and father of four girls. In addition to his Wednesday column at UptownMessenger.com, he also writes an occasional real-estate blog at villererealty.com and shares his family’s adventures via pedicab on Facebook and Twitter.