New Orleans Condos After Katrina
It was questionable at one point after Katrina hit, whether the city would be what it once was. But, since many attempts have been made to bring the Mardi Gras famous city back, developers are looking to profit in the land of Mardi Gras by focusing on rehab and condo conversion. Taking after parts of the city that were not nearly as devastated as other parts of the city, New Orleans is taking to building new condos to recover the city. Most of the multifamily activity here is coming from out-of-state investors looking for condo conversion opportunities in urban infill areas.
These New Orleans condos conversions will diminish the supply of apartments, so owners can expect multifamily prices to stay high and rents to increase by as much as 5% this year.
Within the past year, nearly a quarter of the apartments in the New Orleans historic center has been or began being converted into new condos. Apartment buildings are selling for condo conversions at more than $100,000 per unit. It is hoped that more apartments will become more compliant with the necessity to make the apartments into condo conversions. If this is done, the cost of living will soon go down.
As it is now, condo conversions and rehabilitation continue to be the main development activity. In eastern New Orleans, there are more than 50,000 units in the pipeline. Residents that were forced out of their homes are being called back, and they have the option of being the first to choose among the new condos, once they have been built. Most of the construction is being done in the least damaged areas of the city, but soon enough the city will be recovered enough to save the rest of it. Most new multifamily construction taking place is of high-end luxury projects, to justify the costs.
The overall occupancy rate remains relatively high, although it hit a three-year low in 2004, at 92.2%. That should improve to between 93% and 94%, many hopes. No new condo units were completed in the city in the first three quarters of 2004. But in the last quarter, 280 condo units opened, and 174 additional units are expected to open in the coming years.
The region experienced fewer job losses compared to other markets because it didn't depend on the high-tech sector. Most of the jobs here are in education, health and social services, and entertainment and food services. The city is slowly returning back to normal, many say. Soon enough, Mardi gras will in full bloom, and the city will once again reign in celebration, but not flood. Last year, six new condos projects entered the northeastern submarket of the greater New Orleans area, which will increase the apartment and condo inventory there by more than 50%. It will take time, but there are hopes of these high cost condos and apartments to be filled shortly after being built.
The condos and housing market is becoming more stable in New Orleans, and in time, there are hopes that the city will be at its full potential. As it is now, condo owners are just trying to break even and to get some bread on the table.
