Northshore Living: Understanding the Current Local Housing Market 
by Betsy Mattox Tarkington
The sluggish national housing market continues to be one of the hottest topics in the financial media, with each new article offering a theory, supporting statistics and a projection for the future. While national indicators can never define local realities, no other area of the country is as uniquely, definitively and ambiguously alone as Southeastern Louisiana. From New Orleans to the northshore, from parish to parish and community to community, generalities simply do not serve.
While the national housing market has slowed down over the past three or so years, the northshore has been on the upswing. Post-Katrina, ours was an artificially stimulated real estate market, where supply could not possibly accommodate demand, and pricing rose to nosebleed highs. Only in the last quarter of 2006 did the housing market begin to quiet, appearing to mimic national trends, yet in many ways responding to unique local circumstances, as usual.
Pre-Katrina, the northshore’s robust real estate market followed a somewhat predictable yearly schedule, with inventory peaking in late spring and most buyers situated in new homes by fall. From late August until late February, the market remained relatively stable.
On August 31, 2005, the model for our typical selling season was literally cast to the wind. Buyers with a tentative five-year plan for moving escalated their timing instantly. St. Bernard Parish emptied in a period of days. Everyone who might eventually have come north of the lake, and those with little other choice, rushed to the northshore. The selling seasons that might have come and gone over a five-year period all happened in a single year. Where have buyers for the 2007 season gone? Many of them arrived in September of 2005, way off the typical yearly timeline and years ahead of schedule.
When Katrina hit, she destroyed all paradigms, and the northshore market was stimulated beyond its capabilities. Developers and builders saw an opportunity for great profit—if they could increase production quickly enough to capture the demand. Because construction is not an overnight process, they were some months behind the curve. The astounding number of new northshore homes and developments are largely the result of builders’ efforts to get additional housing on the market in time to catch the wave of need.
According to statistics recently provided at the St. Tammany/Washington Parishes Home Builders Association “State of the Local Housing Market” seminar, current northshore market conditions seem to be more the result of increased inventory than of fewer buyers.
Residential sales averaged a consistent 500 to 550 units in the final quarters of 2004, 2006 and 2007, yet the number of listings in the same quarters rose from 600 to 1700. (An understandable exception occurred post-Katrina in the final quarter of 2005 when sales averaged 1100.) Stated simply, except for the final quarter of post-Katrina 2005, the number of buyers has remained somewhat consistent, but our sellers are facing almost three times the competition.
Phoebe Whealdon, Louisiana Realtors Board member, expresses an optimistic view of our market. She says, “The local outlook is promising. While Katrina may have distorted the real estate picture, there are some great things on the horizon. Interest rates are dropping. Because we are not a sub-prime market, we are seeing few foreclosures. We have excellent schools and hospitals, virtually no crime, an exceptional quality of life and our placement along the I-10/I-12 corridor is a huge plus. Additionally, the insurance industry is starting to recover.”
While market positives will ultimately serve both buyers and sellers, the current market clearly favors buyers. High home inventory has forced pricing back to pre-storm levels, and many sellers are willing to negotiate and/or contribute to closing costs, insurance premiums and homeowners’ fees. Rarely seen in previous markets, predicated offers have begun to enjoy a degree of acceptability.
With so many options, it has become increasingly difficult for buyers to get off the fence, and many fear leaving money on the table if pricing should drop further. Yet market analysis shows that inventory is beginning to be absorbed, and industry observers like Clifton Sivard, St. Tammany/Washington Parishes Home Builders Association president, are predicting price stabilization or uptrending by early spring. Sivard believes that buyers who wait too long into 2008 may be faced with lowered inventory and sellers who are less amenable to negotiation.
For the present, sellers are caught in a waiting game, hoping that inventory absorption will soon lessen the competition. Yet good selling advice is readily available. Industry gurus advise that it is very important for local sellers to stop thinking in terms of post-Katrina pricing and profits. That time and those prices are gone, most probably forever. Today’s wisdom is that the best-looking and best-priced homes will sell the fastest and at the greatest profit.
Serious sellers understand that a home on the market is no longer a personal possession; it is a commodity, and it must be showcased and positioned to outshine the competition.
Updating and upkeep are absolutely critical, and there are inexpensive tricks for doing both. Also important is a willingness to make the home available for all showings. The goal is to know your competition, to position your property in order to outshine all others in its price range and to be willing to negotiate for a win-win deal.
For most of us, our homes are both symbolically and economically meaningful, and news about home values and the stability of the real estate market can be a source of pleasure or dismay. As is true for the stock market, there will always be upswings, downturns and everything in between. The most valuable use we can make of market information is to apply it sensibly to individual circumstances. Anyone able to buy right now is in a position to make a favorable investment. Anyone needing to sell should be smart in pricing, staging and negotiating. And anyone who intends to observe the market from the sidelines is sure to be well entertained.
Betsy Mattox Tarkington, a northshore native, is a REALTOR® with Coldwell Banker TEC. For more information, contact her at (985) 373-6186.
