As reported in The Wall Street Journal article, “Big on the Big Easy,” (see below) “In New Orleans, the luxury real-estate market is bouncing back, boosted by homeowners who want to stay in the city; historic homes, prime locations for Mardi Gras.”

This is no surprise to partner Randy Opotowsky, who heads the residential real estate practice at Steeg Law. “McDonald’s recently resurrected the prize game of Monopoly for its patrons. However, New Orleanians have been playing the game in earnest since the mini-meltdown in 2008.

In the past twenty-four (24) months and even more recently, in the past twelve (12) months, buyers, to their chagrin, and sellers, to their glee, have seen prices shoot up in both the residential and commercial areas. And it’s not just the Boardwalks and Park Places (Uptown, French Quarter, Warehouse District and the sliver on the River), but all over the city- Mid-City, Gentilly, Bywater, Holy Cross, Westbank, and Metairie.

Demand is high; interest rates continue to stay at historic lows giving buyers greater buying/borrowing power.

Commercial developers/sellers are flush with 1031 tax deferred exchange funds that need to find a replacement, otherwise taxes will be due.

The market in the Greater New Orleans area is strong, stable and marching to its own beat – that is a steady beat – we will take St. Charles Avenue (the purple ones) over Boardwalk any day.”

Please contact Randy Opotowsky for more information about this practice area.

“Big on the Big Easy”
By Alina Dizik

Francine Segal heard about a luxury condo development being built among the mansions of New Orleans’s historic Uptown and immediately went to investigate. Aware the property was not yet listed and unable to track down the selling agent’s info, she went straight to the developer’s door.

“I took my dog and walked over to [the developer’s] house,” says Ms. Segal, a dialect coach for the film industry, who bought the condo for $1.5 million after seeing just the floor plan. “Everybody wants to be here.”

Ms. Segal, who has lived in the neighborhood for more than 30 years, is among the buyers fueling New Orleans’s real-estate market. For her, the big draw was being able to stay in the Uptown area, where new-construction luxury homes are difficult to find, she says.

As New Orleans prepares for next week’s Mardi Gras festivities, there are signs of steady growth from homeowners who have returned to the city since it was largely abandoned in the wake of Hurricane Katrina. More than eight years after the storm left the area in shambles, the population is edging toward pre-hurricane levels of 400,000, fueling the housing boom.

“This is not a frothy real-estate market” that will fizzle out, says Christopher Calott, director of the Sustainable Real Estate Development program at Tulane University. “This had been a declining economy, and it’s gotten a bounce after Katrina.”

The real-estate recovery has been uneven. Neighborhoods that sustained some of the worst damage from Katrina, including the Lower Ninth Ward, have been among the slowest to come back, and continue to face challenges, Mr. Calott says. Newcomers to the city, looking to take advantage of lower housing prices, are attracted to the Bywater and Irish Channel neighborhoods, both of which were on the verge of gentrification pre-Katrina. Those areas “are seeing your pioneer buyers moving in around the margins,” he says.

At the high end, buyers, including long-time residents, are now updating New Orleans’s historic housing stock and scouting out new luxury developments, hoping investments will pay off as prices rise.

Developer Jim MacPhaille says he didn’t do any marketing before selling all 12 units in the 33,000-square-foot abandoned schoolhouse where Ms. Segal bought her condo, at prices up to $3 million. Ms. Segal and her husband will be moving to a 2,100-square-foot condo with coffered ceilings, terraces and a shared pool, from their three-story house a few blocks away.

“Prices have started to go up exponentially” on luxury homes, says real-estate agent Cynthia Sciortino. “People clamor to get them.”

The average home price in New Orleans increased by 15% this January compared to a year ago, according to the New Orleans Metropolitan Association of Realtors.

Luxury homes can start as low as $500,000 and go to more than $3 million, Ms. Sciortino says. Some can require hundreds of thousands in renovations. In the past few years, many luxury homes stayed on the market for less than a week, she says.

Word-of-mouth helped move hundreds of homes in areas such as the Uptown neighborhood beside the 340-acre Audubon Park and the Garden District, where visitors can ride the St. Charles Avenue streetcar. For young professionals moving to the city, condo developments in the Warehouse district, bordering the French Quarter, and the Marigny neighborhood are popular, says Mr. Calott.

As of 2012, 8% of New Orleans’s population had moved there during the previous year, while as of 2004, only 3% of the population had moved to the city in the previous year, according to the Greater New Orleans Community Data Center.

This year, New Orleans is adding two new hospitals and General Electric Co.GE +0.10% recently opened a technology center here. The city is also luring entrepreneurs eager for affordable housing, says Tim Williamson, a co-founder of Idea Village, a New Orleans-based nonprofit that supports local entrepreneurs. “We’re seeing a [return] to the core of the city,” says Mr. Williamson, who, with his wife and two sons, purchased his childhood home in Uptown from his mother.

Updating aging homes presents challenges. Many 100-year-old homes have been only lightly renovated over the years and require plenty of rejiggering to fit in laundry hookups, sprinkler systems and central air conditioning, says New York-based interior designer Alexa Hampton, who works with clients in New Orleans.

“The exteriors are so rich that often people want the decorating to be a little cleaner,” she says. Furniture tends to be bigger because of high ceilings and plenty of large spaces.

When purchasing their 5,000-square-foot, 19th-century home two years ago, Gordon and Holt Kolb decided to modernize by adding a bathroom to each of the four bedrooms, along with a traditional powder room under the staircase. The kitchen now seats 10 and has a dining banquette to allow the couples’ two sets of twins to do art projects or home work.

“Our kitchen was the main reason we wanted to renovate,” says Ms. Kolb, 38. “You live in your kitchen.” A smaller dining room has dark walls and is used for more formal occasions.

After a 10-year renovation of his 10,000-square-foot Garden District historical home, Hal Williamson (no relation to Tim) is still making small tweaks. Mr. Williamson, a decorator, purchased the home in 1994 with his partner Dale LeBlanc, an oncologist. After Katrina, the couple spent time dealing with exterior damage to their property caused by high winds, but didn’t consider moving. “It’s the most European city in America,” he says. “It’s extremely neighborly and friendly.”

Mr. Williamson’s house is a block from one of the biggest Mardi Gras parade routes, and he enjoys having his home on display. This Sunday—as he does every year—he expects about 200 guests to gather in the common areas and gardens for cocktails, gumbo and jambalaya, then stroll to see pre-Mardi Gras festivities. He says that his home is an attraction for tourists doing city tours year-round and that, this year, more people than ever have been coming to look at the exterior, including its cast-iron fence with a cornstalk motif.

Ricky and Mamie Favor renovated the 1859 home of a former steamboat captain located in what he calls “the edge of the Garden District” and moved in with their family 18 months later in 2011. Nearby, an empty building will become a food and beverage museum this year and rundown homes are being renovated.

The 6,700-square-foot home, bought for $972,000, needed almost $500,000 in renovations, Mr. Favor says. To create a roomier main floor, the couple relocated the kitchen from the back of the home toward the front, knocked down a wall and got rid of the dining room.

Some wood discovered during the renovation was re-milled to create new floors. Mr. Favor, a metal-distributor manager, says the rewired chandeliers likely date back to the first owner. “We wanted to maintain [the home’s] originality but make it functional,” he says. Visitors can rent the 2,000-square-foot brick carriage house on the property, converted from the original stable.

Six months after Katrina, Machelle Payne and her family relocated to Atlantic City, N.J., for her husband’s job. But they moved back to New Orleans six months later, after realizing they wanted to raise their family there, she says.

In 2011, the family of five upgraded to a home in Uptown complete with a basketball court and swimming pool created during a renovation by previous owners, says Ms. Payne, who owns the house with her husband John, a casino executive. The couple bought the home for more than $2 million before it went on the market because their agent knew the previous owners. “We jumped at it,” she says.

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