Are you living in or considering moving to the Big Easy? Either way, you might be asking yourself if it’s better to rent or buy a home in New Orleans. Learning about the prevalent market conditions is the first step to make an informed decision.
Currently, the New Orleans housing market is a buyer’s market. In these market conditions, sellers have fewer more opportunities buyers can find great deals.
According to Zillow data, the median listing price for homes in the Big Easy is $345,000 while the median sale price is $227,600. If you work hard, you can score great deals on your home purchase.
The New Orleans housing market experienced a decrease in home value of 3.9% last year. However, it’s only forecasted to fall by 0.2% within the next year. While New Orleans’s home value depreciation rates might make you hesitant about buying a home in this market, you can take this opportunity to secure a better deal on a property.
When it comes to renting, the median rent list price in this market is $1,465 which is about equal to the national median of $1,486.
Doing your research can help you find the best home in New Orleans. However, we recommend you consult with a local real estate agent to learn more about the real estate trends in this market. An experienced realtor can provide insight into your housing options and the best neighborhoods in New Orleans.
Learning about the housing market conditions is a start to choosing between renting and buying in the Big Easy. However, it’s vital to learn about the implications of either housing option to make the smartest decision that fits your finances and lifestyle.
Maybe you’re moving to the Big Easy to learn if it’s the right place to put down your roots. Or you’re moving for a job that doesn’t have a guaranteed future. Either way, renting may be your best option if you want to explore the area and find the right neighborhood to live in NOLA.
Renting may also be a great option if you aren’t looking for a long term commitment or can’t cover the typical home buying costs such as closing costs and down payment. Homeownership costs such as mortgage payments, maintenance, and repair costs might make you think twice about choosing to buy a New Orleans home.
While New Orleans rent prices may be more expensive than many areas in Louisiana, renting may be the right housing option for your lifestyle, finances, and priorities.
Pros and Cons of Renting
When you choose to rent, you won’t have to cover typical homeownership costs such as maintenance and repairs. Generally, your landlord will make any necessary repairs and take care of the property.
The initial costs of renting are lower than buying a home since landlords usually only ask for a deposit and the first month’s rent. Leasing a property also allows you to move without penalty after your lease ends. If you buy a property, you will need to lease or sell your home before moving.
Another advantage of renting is knowing how much you’ll spend on housing every month. When you sign a lease, your monthly rent is set and won’t change during your lease term.
Typical monthly costs you should expect are renter’s insurance, monthly rent, and utilities such as electricity, heating, and gas. The average utility costs in New Orleans for a person living in a studio are about $131. However, these costs depend on factors such as the location, size of the property, and utility providers.
The biggest con of renting a home is that you won’t build equity. Another disadvantage of renting is that your landlord may increase your rent each time your lease is up for renewal. When it comes to tax deductions, you won’t have the added benefit of mortgage interest rate deductions.
Renting may be ideal if you aren’t looking for a long term commitment but you should consider the true cost of renting and the fact that you can’t improve or tailor the property to your style if you decide to rent.
When you choose to buy, you’ll have to cover home buying costs such as down payment and closing costs. While Big Easy’s median sale price of $227,600 makes it affordable for many home buyers, home prices vary on a neighborhood basis.
Homes prices may double in neighborhoods such as the French Quarter and the Central Business District. Before taking the leap, it’s important to take a hard look at your finances and make sure you can afford to buy a home in New Orleans.
Pros and Cons of Buying
When you choose to buy a home, you may tailor the property to your style. Another advantage is that you won’t have to wait for your landlord to fix something or make improvements to the property. If you want to get the most out of your investment, you can make whatever improvements you’d like to increase your home value.
This strategy will help you get a better offer for your home if you choose to sell it in the long term.
The biggest con of buying a home is the fact that you’ll have to cover all home buying and homeownership costs. While you will build equity by making your mortgage payments, you’ll also have to cover your utilities, property taxes, repairs, among other homeownership-related costs.
Home depreciation rates in New Orleans aren’t great news for potential buyers since you may end up owning a property that’s worth less than what you paid for. This situation may put you in a tight spot if you have to move unexpectedly or decide another neighborhood is a better option.
Is Renting or Buying in New Orleans Your Best Option?
When it comes to choosing between renting or buying a New Orleans home, there’s no right or wrong answer. It will come down to your finances and lifestyle. Buying is the way to go if you want to build equity and lower your overall monthly payments (depending on your mortgage rates and down payment).
We recommend you consider working with a local real estate agent. An experienced realtor such as one of our Clever Partner Agents can provide insight into the market trends and even help you save through our Home Buyer Rebate program. A local realtor can help you buy the right property in New Orleans that fits your budget and needs.