When you’re trying to project the cost of relocating to a new area, or buying your first time in a city you’ve lived in your whole life, there are a lot of factors you need to consider. Not just housing prices but taxes, repairs, insurance, and more.
It can be hard for someone who’s never owned a home before predicting those costs. An experienced, local real estate agent can be an invaluable resource to set realistic expectations. Not just in terms of the direct cost to buying a home but other related expenses you might not have put on your list.
Typical Home Prices in New Orleans in 2019
The New Orleans market is one in transition out of a peak phase. Previously, sales and prices were increasing while inventory decreased, but now the market is neutral and shifting to less price appreciation and more affordability.
Median home values in New Orleans are $178,700, a dip from 2018. It’s taking about three and a half months, on average, for homes to sell and much longer for luxury properties. There have been new condos built in the Central Business District but most of the new construction is at the higher price point.
Throughout Louisiana home sale prices drop in late summer and early fall, making it a good time of year to start shopping.
How Much Are New Orleans Property Taxes?
Property taxes in New Orleans are calculated using your property’s assessed value and the local tax rate. Louisiana has the third lowest effective property tax rate in the country, which is great news if you want to buy a luxury condo. The median rate paid is just $750 a year.
State law mandates that all property values be reassessed once every four years. County assessors use the sale prices of comparable properties in your neighborhood to determine your home’s value and then apply an assessment percentage. In Louisiana, it’s 10% for residential property.
As assessment percentage takes a percent of your home’s value, so 10% of the median home value of $178,700 would be $17,870, to calculate your home’s value. From that number you can deduct a homestead exemption of $7,500 for primary residences, so your total assessed tax value would be $10,370.
Note that the homestead exemption doesn’t apply to city taxes. Ask your realtor what the local and city taxes are in your neighborhood and for any potential home’s full assessed value before building property taxes into your home buying budget. Also, inquire about any recent assessments or levies that might have been passed which could impact your future taxes.
Average Homeowners Insurance in New Orleans
Homeowners insurance is another annual expense you should factor into your overall cost of homeownership. Most homeowners don’t pay it all at once, however, rather your mortgage company amortizes it over the year and collects it as part of your mortgage payment.
The average cost of homeowners insurance in Louisiana is $2,979, or 143% higher than the national average rate. Your home’s age will influence your insurance rate, if it sits in a flood zone, and if it’s been flooded at all in the past few years. Local crime rates, related to property crime, can also raise rates.
If you want to pay less in homeowners insurance you can always sign up for a plan with a higher deductible. But make sure you have money set aside just in case. Many insurance companies will also give discounts for bundling policies, such as auto, home, and life.
When shopping for home insurance, be sure to compare different companies and ask your realtor for their input.
Common Home Maintenance and Repair Costs in New Orleans
The housing stock in New Orleans is older, unless you buy new construction, and has been through hurricanes and floods.
Trees are great for providing shade in a subtropical climate but plan on keeping them trimmed so they don’t touch or hang above your roof. That can prematurely age the shingles and cost you thousands to have them replaced.
Look at trees on nearby properties, too, whose roots could crack patios and driveways. The average cost of tree trimming is around $700 but can go up depending on the tree’s size.
A functioning and efficient air conditioning system is a must in New Orleans’ summers, but make sure you clean the filters and have the system serviced every year. Replacing or fixing it can be expensive.
New Orleans has a termite problem which costs the city $300 million in damage annually, so put preventative treatments in your yearly homeownership budget and being careful about trimming back shrubs near your home’s foundation. A termite control service will be $500 and up for the year.
Any signs of past flooding will be an issue when it’s time to sell the house, so should your home experience a flood situation stay on top of fixing cracked concrete, stains, and soft drywall. Repairing floors could be over $800, sealing a basement’s foundation over $4,000, and repairing drywall anywhere from $500 to $1,700.
It’s hard to make a budget for home repairs and maintenance when many things, such as a flood, are outside of your control. Experts advise setting aside 1% of the home’s value for annual repairs. For flood concerns, talk to your homeowner’s insurance company and make sure that your deductible if affordable.
Other Costs of Living in New Orleans to Consider
The cost of living in New Orleans is higher than the national average, primarily because of transportation costs. The city has buses and streetcars for public transportation options but most of the city’s residents commute by car. Poorly maintained infrastructure also often causes needed car repairs.
Plan on paying roughly $117 a month for electricity, which is the city average, and prices that are at or higher than the national average for food and health care.
One study determined that you’d need an annual income of $60,782 to live comfortably in the city, assuming you planned on only spending 50% of your income on necessities which included housing.
Find a Top New Orleans Real Estate Agent
An experienced, local real estate agent provides a lot of value when you’re moving to a new place. Their familiarity with local neighborhoods means they can listen to your needs and wants and know where you’d be happy living. Within their network, they might have access to off-market listings or information on listings about to go live which could help you swoop in and get a great deal.
Agents know that cost is always a factor for home buyers, and if you have questions about the affordability of living in New Orleans, they can set realistic expectations. Because they offer showings on-demand, you can see a potential property at any time.
Clever helps buyers connect with top agents in New Orleans. Our agents offer home buyer’s rebates to qualified buyers, which can save you money. Reach out to connect with a Clever Partner Agent today.