Housing prices in fell slightly in the first half of 2024 across most of Orleans Parish, as insurance costs and high mortgage rates kept a damper on home sales. But two neighborhoods in the heart of the city — areas in and around the French Quarter and Central City — saw much bigger price swings than in most other areas, drawing the attention of close watchers of the local market.
In Central City, the median home price per square foot jumped to $301 from $203 a year ago, an increase of more than 48%. While not far away, in the two ZIP codes that largely comprise the French Quarter and a few blocks nearby, prices per square foot fell 23% and 13%, respectively, according to data from the New Orleans Metropolitan Association of Realtors.?
Brokers and other?real estate professionals said that the diverging activity in the two neighborhoods over the past six months offered a peek at the local forces that often underlie broader real estate market moves.
The Central City ZIP code of 70113 is an area bounded roughly by Carondelet Street, Washington Avenue, Claiborne Avenue and the West Bank Expressway, and includes a handful of blocks in the Warehouse District and also the South Market District. For years, much of that area saw little investment and property changed hands for much less than nearby neighborhoods.
But in recent years, investors have moved into the area and converted vacant properties into short term rentals or single-family and two-family homes. The former Brown's Dairy site, now an entire city block of short-term rental houses, is a prominent example of the neighborhood's transformation.?
“I think some of what you’re seeing is that this area has a lower entry point and people are fixing up these properties so it’s creating an upward spiral,” said local real estate broker Craig Mirambelle.
Another big factor is that there were only a smattering of sales in the ZIP code —? only 16 transactions took place from January-July — and several were of high-end condos in those few blocks of 70113 that comprise the Warehouse District and the South Market District, not Central City.
Three condos sold in The Standard at 1001 Julia St., the priciest of the three residential buildings in the South Market District. One of those, a nearly 1,900-square-foot, two-bedroom unit, sold for $1.2 million, or $631 per square foot.
Another slightly smaller condo, also with two bedrooms, sold for $721,000, or more than $570 per square foot.
"People with new or newly renovated homes in pristine condition are still able to demand top dollar," Mirambelle said.
A pause around the Quarter
In the French Quarter and some nearby blocks, which have often led the market in price gains in recent years, the transaction values were lower than a year ago and properties spent longer on the market on average than elsewhere in the city.
In 70112, which includes several blocks in the upper end of the Quarter, the median price per square foot fell to $344 from $444 last year. In 70116, which includes the lower Quarter and Faubourg Marigny, the median price fell to $403 per square foot from $461.
In those areas, homes were listed for an average of 75 days compared to 60 in the metro area overall. More days on the market typically suggests sellers are having more trouble finding willing buyers.
Still, a look at the 39 properties that changed hands in 70112 and 70116 from January-July shows that buyers paid, on average, 96% of sellers’ asking price, with more than a dozen properties selling for at least $550 per square foot.??
That's considerably higher than anywhere else in the metro area, where the median price per square foot was $275.
Longtime broker Michael Wilkinson of French Quarter Realty said he attributes the slowdown to an inevitable market correction after years of price growth in the French Quarter and Faubourg Marigny.
"I really think it was a cooling off period after two of the hottest years we've ever seen," he said. "It was really not a surprise."
Also, one factor that real estate professionals and affordable housing advocates have pointed to in the past — the explosive growth of short-term rentals across tourist-heavy areas, may have played a role. In the French Quarter, the City Council has banned short-term rentals, while in the Marigny and other parts of the city, a new law limits the number of residential short-term rentals to one-per-square block.
Like other brokers around the city, Wilkinson said he has been encouraging sellers who have to want to list their properties to price aggressively; otherwise, to wait until interest rates come down, when market activity is expected to pick up, at least somewhat.
"I'm telling people if you’re anxious to move you house, let’s price it accordingly," he said. "If not, let’s price it based on what we hope to see later this fall."