Realty Times - Real Estate Outlook: Affordability High

Realty Times - Real Estate Outlook: Affordability High

Good News For New Orleans Property Owners!

N.O. area home prices up 8 percent in January

POSTED: 03:15 PM Wednesday, February 10, 2010
BY: CityBusiness staff reports

The average selling price of homes throughout the New Orleans metro area in January was up 8 percent compared with last year, from $186,681 to $201,659.

Meanwhile, fewer homes were sold over the year, at 363 compared with 440 in 2009, according to statistics from the Gulf South Real Estate Information Network.

All areas except St. Tammany Parish saw the average selling price increase over the year, with the East Bank of Jefferson Parish leading the way with a 27.3 percent increase, followed by the West Bank of Orleans Parish at 26.5 percent, the East Bank of Orleans Parish at 22.6 percent and the West Bank of Jefferson Parish at 15.8 percent. The eastern portion of St. Tammany Parish saw prices tumble 29 percent, while western St. Tammany parish posted a 10.4 percent drop.

On a month-over-month basis, the metro area was almost evenly split. The West Bank of Orleans Parish led the gainers with a 26.1 percent increase over December, followed by St. Bernard Parish at 22.5 percent. Plaquemines Parish, where one home sold in January, posted the largest decrease at 44.3 percent, followed by the East Bank of Jefferson Parish at 8.5 percent and St. Tammany East at 7.9 percent.

Here’s how the average selling price measured up by parish in January:

– Jefferson Parish East Bank: $236,433, down from $258,278 in December but up from $185,720 a year ago;

– Jefferson Parish West Bank: $143,455, up from $140,538 in December and from $123,846 a year ago;

– Orleans Parish East Bank: $241,202, up from $234,998 in December and from $196,695 a year ago;

– Orleans Parish West Bank: $184,339, up from $146,235 in December and from $145,680 a year ago;

– Plaquemines Parish: $263,000 (one home sold), down from $472,150 in December but up from $243,333 a year ago;

– St. Bernard Parish: $103,133, up from $84,159 in December and from $91,169 a year ago;

– St. James, St. John and St. Charles parishes: $178,748, slightly up from $178,576 in December and from $155,238 a year ago;

– Eastern St. Tammany Parish: $163,183, down from $177,237 in December and from $230,317 a year ago; and

– Western St. Tammany Parish: $220,628, down from $237,628 in December and from $246,320 a year ago.

Now is a great time to buy a home, with low interest rates in the 5% range, 1st-time homebuyer tax credit, and a local market on the upswing.

SALE EVENT!! Why Rent When You Can Own a Fabulous NEW Townhome in Madisonville!!

ATTENTION HOME BUYERS! CHECK OUT THIS ROCK BOTTOM SALE!

GRAND OPPORTUNITY FOR AFFORDABLE HOME OWNERSHIP:

Announcing a BIG SALE on the Townhomes located at Guste Island Subdivision in Madisonville. All of the townhomes are located in the "Village" section of Guste Island on White Heron Drive and are in NEW condition. All of the Townhomes are vacant and ready to be lived in!

IN AN EFFORT TO GET THESE HOMES SOLD, THE BUILDER HAS SLASHED PRICES, BUT YOU MUST ACT NOW!

• Contracts Must Be Written By 5/1/09 at 6 PM
• Close Must Take Place On or Before 5/31/09
  

THE BUILDER HAS SLASHED PRICES UP TO 20K ON SOME UNITS ON TOP OF ALREADY REDUCED PRICING. HERE ARE SOME ADDITIONAL PRICING DETAILS:

• Units are Listed Between $84 and $92 per Square Foot NEW Construction!
• The Least Expensive Unit is $139,900!!
• All Qualify for Rural Development loans, 100% Financing 6% in Seller Paid Closing Costs Allowed
• Should Qualify RD Loan, You Could Walk Into Your New Home With NO MONEY DOWN!!!!
• Buy A Home For Cheaper Than Rent!
  

SOME FACTS ABOUT THE TOWNHOMES:

• 15 Townhomes to Choose From
• Great Constuction From KB Homes, Over 50 Years in Building Excellence
• 4 Floorplans, Each Unit Individual to Each Other in Terms of Design
• Both 2 and 3 Bedroom Designs
• All Have Garages
• All Have 2.5 Baths
• Most Have Bonus "Loft" Areas That Offer Additonal Living Space or Could Be Converted o an Additonal Bedroom
• FREE 10 Year Builder's Limited New Home Warranty!

SOME FACTS ABOUT GUSTE ISLAND AND THE COMMUNITY:

• Exterior Insurance is Included in HOA Dues
• Landscaping and Lawn Maintenance Included in HOA Dues
• Community Club House and Pool
• Play Spaces Include Baseball and Soccer Fields Walking/Biking/Jogging Paths and
  Lakes
• TO MAKE AN OFFER ON ONE OF THESE BEST BUY TOWNHOMES, OR FOR MORE INFORMATION ON THIS EXCITING COMMUNITY, RURAL DEVELOPMENT LOANS OR ANYTHING REGARDING REAL ESTATE, PLEASE CONTACT:
  
  
• Jeff Craig, (504) 352-6190
• Alicia Lagarde Craig, (504) 382-3724

CALL THE CRAIGS FOR REAL ESTATE

100% Financing Can Be Yours Through USDA Rural Development Loans

With most loan products offering 100% financing disappearing with the downturn in the housing market, many home buyers with little to no cash for a downpayment or closing costs have had a harder time finding loans that they can afford. For many people in this situation, a USDA Rural Development Loan may be the answer for them that will provide a pathway to home ownership.

The loan program is offered through the United States Department of Agriculture and is intended to foster home ownership in rural areas for families with low to moderate incomes. While both location and income limits exist, the areas covered and the maximum incomes allowed may surprise you.

The loans offered are for 100% financing with buyers being able to accept up to 6% from the seller towards closing costs and prepaid items such as taxes and insurance.

In addition, the program does not require the borrower to purchase PMI (private mortgage insurance) further saving on the costs to the buyer.

Many homes for sale are in eligible areas that are in close proximity to major urban metropolitan areas and corridors, the New Orleans area included. For instance, areas in both St. Bernard Parish and Kenner are eligible, as well as most of St. Tammany and surrounding Parishes.

Income limits are set generously at 115% of median income for the area. Income limits for the New Orleans area are for a family size of: (1)=$49,550; (2)=$56,600; (3)=$63,700; (4)=$70,750; (5)=$76,400; (6)=$82,050; (7)=$$87,750; and (8)=$93,400.

More information about rural development loans may be obtained by visiting the USDA website at: http://www.rurdev.usda.gov/

Now is a Great Time to Buy a House!

With all of the negative news surrounding us these days, from the collapse of the housing market to the latest unemployment figures, many of us assume that now is not the best time to make an investment in real estate. In all actuality, just the opposite is true! Now is the time to buy! And for a variety of reasons.

Reason #1: Pricing is Fantastic! Prices are lowest they have been as New Orleans area housing inventory remains high and home buyers continue to be in the driver’s seat. This is true in many markets, and is especially seen in our St. Tammany/Northshore market where there continuues to be a surplus of subdivisions offering builder-developed new home stock. Considering these housing market trends, will prices go lower? Truth is, nobody's crystal ball works well enough to know, but this next statement you can take to the bank: by the time you know that the prices have bottomed out, they will have already risen significantly. In other words, if you wait, you may miss the boat.

Reason #2: Interest Rates Are Low! Can they get much lower than 4.265%? These 4+% interest rates won't last forever. In these uncertain times, the Federal Reserve can change course on a dime, costing you thousands in interest payments on a home loan!

Reason #3: Enjoy Benefits of Home Ownership! All the advantages of home ownership still exist. It is a forced savings plan as you build equity with each payment on the principal. You pay yourself, not someone else. It will more than likely be your biggest savings vehicle. Interest on your home is still tax deductable by the government, so rather than paying taxes, you are building wealth. It is an investment that increases in value even as you build equity while paying down the note and still increases in value (over time) even after the investment has finished being paid for.

This is called a buyer's market for a reason, not a waiter's market or a lookers market. With home prices down, inventory high and interest rates low, now is a great time to buy a house!

Buyer Beware! Is That Flooded and Renovated Home Eligible For Flood Insurance?

So I've recently had the pleasure of representing a first-time homebuyer here in New Orleans. Once he was prequalified, we narrowed down his search to best fit his wants and needs, settling on certain section of "northwest" Gentilly including the Mirabeau Gardens, Oak Park, and Vista Park neighborhoods. Through the usual process of elimination, we settled on a house that was just nearing completion and after some consideration, made an offer, which was immediately accepted.

As most of us know, these neighborhoods were heavily impacted during Hurricane Katrina from the failure of the London Avenue Canal several blocks away. It's not unlike many blocks in the area. Of the 16 homes that line the street, 2 are renovated and being lived in, 2 are in the process of being renovated, 2 have been torn down, 9 are gutted (including 3 owned by the Road Home) with no signs of activity. And then there is our house.

We immediately scheduled a general home inspection for the next day. The home inspector was not able to check the operation of the central heat or the water heater as the gas supply was not on. Concerned, I called the listing agent to inquire if the home had all the appropriate building permits and subsequent inspections, to which she anwered "yes". Later that evening, I decided to do a quick check of the City of New Orleans' website which indicated that the home was listed with a 51.50% damage assessment from having been flooded. I decided to do a little more investigating.

The next morning, I made a trip down to City Hall to the Department of Safety and Permits. After a short wait, a clerk helped to determine that the damage assessment was indeed correct. And worse yet, that even though the property had undergone 2 mechanical and 2 eclectrical inspections, no building permit had ever been issued.

So here is the problem: since the house was rated as over 50% damaged, to meet FEMA guidelines, it must be elevated. In order for a home to receive a building permit, it must be below the 50% threshold or be elevated according to FEMA rules. In order for this home to be compliant to FEMA, it will need to have its damage assessment lowered and a building permit in place authorizing the renovations. The owner will also have to prove that he did not put in more than 50% of the pre-Katrina value of the home into the renovations, as required by FEMA as well.

What is the penalty to your buyer if these issues are not addressed? FEMA can come back at any time in the future, see that the home is listed as having been over 50% damaged from flooding and ask the owner for all of the documentation relating to its renovation. If the homeowner cannot produce a building permit and documents showing less than 50% damage, FEMA can (and probably will) DENY your client/homewowner flood insurance. And in this city, flood insurance is not a luxury.

FYI to all those realtors who are listing a home in flooded areas that has been renovated. Please be sure to ask for the appropriate documents from the seller including building permits and inspection reports. And to those realtors working with buyers who are thinking of purchasing one of these houses, make sure to ask for these items in your offer as contingencies.
Hopefully, these issues can be resolved to everyones satisfacton and we can move ahead to an Act-of-Sale. But if not, at least I know I will have prevented a client from making a potentially devastating mistake. I wonder how many others have already made this mistake and do not know it?

Calculating Your New Orleans (Orleans Parish) Property Tax Assessment

Property taxes in Orleans Parish are due in advance at the beginning of the tax year. Parish taxes are due January 31 and are delinquent February 1. Residential property is assessed at 10% of its appraised value, less a $7500.00 Homestead Exemption (if applicable). A property owner may only claim a homestead exemption for property that is the domicile of the owner and may not be used for rental or vacation property. From there, the millage rate that is set for the year is used to determine the final amount of property tax that is due.

Here is how to calculate your 2008 Orleans Parish Property Tax using the following example:

$100,000.00 Appraised Value
x 10%
__________
$10,000.00 Assessed Value
-7,500.00 Less Homestead Exemption
__________
$2,500.00 Taxable Value

$2,500.00
x .12844 Orleans Parish Millage Rate (2008)
__________
$ 321.10*

Note: All properties in Orleans Parish (with few exceptions) are subject to the Police and Fire millage, even if they qualify for Homestead Exemption.

To Calculate the Police and Fire Tax:

$7500.00
x .01047 Orleans Parish Police and Fire Millage (2008)
________
$78.52

TOTAL ANNUAL TAX DUE: $321.10 + $78.52 = $399.62