I’m Joe Gerrity, local businessman, investor and Real Estate Broker. For my “Yo Joe!” column, I’ll be answering your real estate questions as well as providing market information and housing statistics.
I believe the main responsibilities of a Realtor are to add value and facilitate mutually beneficial transactions, and through this column I hope to help the New Orleans community make more informed decisions about their housing future.
Yo Joe! The weather is heating up. How about the Uptown New Orleans housing market?
Similar to the weather: it’s getting hot! When the numbers were finalized, this was actually the busiest April since 2010 — an interesting observation, considering how many people speculate that the local housing market is slowing down. Additionally, April 2019 was the sixth busiest individual month for multifamily home sales in the past 10 years.
You may have noticed the massive disparity in the median sales prices in the infographic above. This is largely due to the relatively small area surveyed when gathering the data. For the most part, Orleans Parish has a less fluctuating median sales price when compared to the Uptown area, and we’ll get into that data next month as well.
The area the data came from can be seen below. We had about five people in the office debating what Uptown should mean for the purposes of this article, so in the end we decided to let our new intern, Matthew, from Loyola University, take the heat from those who disagree.
For single-family homes, the hotter weather tends to lead to a lot of sales as well. The graph below shows the number of sales over the past five years in the Uptown area. Historically, June has been the best month for single-family home sales. Coupled with the fact that June sales prices are often at or just below the median sales price for the year, we’re optimistic that June will be an excellent time to buy a New Orleans home. For homebuyers, summertime in NOLA also means recently lowered prices, less competition, and a more flexible schedule from mid- to late summer.
Yo Joe! Do you always hire a professional inspector to give you a formal report during the inspection process?
The short answer is yes, with a few caveats. I would especially recommend this practice to anyone who is not a real estate professional. I think it’s shortsighted for a home buyer or even a casual investor to save a few bucks by not having it properly inspected by a licensed professional. There are just too many unknowns, and to be honest, too many inexperienced and undertrained Realtors looking out for their own best interests. Having state licensed third-party come in to tell you the good, the bad and the ugly news about the property is a great safeguard.
In addition, lenders usually require that first-time home buyers at least have the house inspected by a licensed pest control specialist. Termites can cause serious damage to a property, which is not covered through homeowner’s insurance but a separate termite contract. Remember: your lender wants to make sure that their investment in you is safe.
Most people in New Orleans also undergo a video pipe inspection to ensure that their underground or under-house sewage pipes are all in good condition. Even experienced investors have this procedure done by professionals, considering the repair costs can be in the tens of thousands of dollars.
There are of course people, particularly contractors and experienced hands-on investors, who may not need a professional to inspect a home and point out every single potential issue. When my partners and I purchase a rundown property that needs a full rehab, we may skip the general inspection since we’ve seen enough houses to accurately estimate repairs, or at least know when we’ll need to bring in a professional to give advice.
Tying it all back together, I want my clients—and all potential home buyers—to have all possible information available when making a housing decision. That’s how you accurately negotiate and make a determination about whether the house is right for you. Even if the inspectors find that nothing is wrong (which has never happened), the client will have learned a lot about their future house. From where the A/C filter and hot water heater is located, to what kind of spray foam insulation is installed — and where the secret safe is hidden — home buyers learn essential information about their home during the inspection process.
Yo Joe! I want to buy a house somewhere, but I’m worried about flooding. What parts of the city generally flood the most and the least?
This map provided by Louisiana State University will help answer your flood-related questions. All you need to do is zoom in on an area or enter an address to access the information about the likelihood of flooding in the next 100 years. Yes, you can search a specific address.
The map color codes risk areas across the city. When you click on a given point in these areas, a pin will be dropped, and a tab will appear. This tab will list important information regarding a home’s elevation and base flood elevation. Base flood elevation, or BFE, measures how high floodwater is expected to rise during a base flood. This information will be incredibly important to determine the relative risk of buying a home in flood zone.
However, the map doesn’t tell the whole story. Some houses have quasi-basements, and some are positioned so high on piers that they look like they belong in the circus. Some are on lots that have been built up off the road, and others sit at roughly the same height as the bottom of the infamous New Orleans potholes.
That said, if you live in a raised house in an area located below sea level that is susceptible to flooding — like Mid-City — you may want to invest in raised parking. If you have off-street parking, you can potentially build a tall concrete pad to park your car so that you are above the water level. It’s not cheap, but neither is losing your car to water damage.
Yo Joe! Do you think New Orleans is a good spot to flip a house?
Yeah, of course. New Orleans, due to various factors including Hurricane Katrina, has a lot of rundown and abandoned properties, and property values have risen substantially over the past decade. That’s a nice mix for a flipper.
Perhaps a victim of its own success to some extent, the house flipping market in New Orleans is becoming more challenging. New Orleans has been named by various publications as one of the best places in the country to flip a house. This has created an influx of demand from not only locals, but also out of state investors who want to sink their teeth into what they assume is an easy market.
The problem is, New Orleans is a unique city and as such it’s easy to misread a neighborhood or a deal. As I alluded to earlier, flipping houses is hard work — even if you know what you’re doing. If you don’t know the particulars of the local market, you can quickly find yourself in some serious trouble. If you’re working with an inexperienced Realtor as an out-of-town investor, you may as well just go to the casino. You’ll probably have better odds of success given the difference even a few blocks can make when running comps.
All in all, though, it’s a tried and tested way to make money and be your own boss, and it can often be done in a less than full-time role. It’s just generally pretty cool, too, especially in a city where people take a lot of pride in historic homes.
You Know Joe?
Joe Gerrity is the Broker and managing partner of Korman Gerrity Real Estate, a full service New Orleans real estate brokerage located at 4505 Magazine St. He is also the managing partner of Big Easy Buyers, and a founding partner of both Crescent City Vape and Simply CBD.