New Orleans Ranks As One Of The Most Unaffordable Cities In America
Turns out the Big Easy’s not so easy if you’re looking for a place to live.
Turns out the Big Easy’s not so easy if you’re looking for a place to live. In fact, according to a study conducted by Apartment List, which evaluated data between 2005 and 2015, New Orleans ranks alongside New York, Los Angeles and San Diego as being one of the least affordable cities in America. N’Orleans, the new Brooklyn, Who knew?
Nearly 57 percent of renters in the New Orleans Metro area reported they were burdened by rent cost with various factors contributing to the dramatic increase. Firstly, since Hurricane Katrina, the average price of a house in New Orleans has climbed a stunning 46 percent. Demand in the older parts of the city like Uptown, Bywater and Magrini have skyrocketed, meaning that many buyers wanting to live there have been priced out and have been forced to rent.
Wages haven’t kept parity with the house prices and rents. The latter increased by 18.6 percent in the decade after Katrina while renter income only increased 14.6 percent. Also, post millennials are delaying getting married or having fewer children which has meant they have also delayed the home buying process and increased the number of rental properties needed. Lastly, more than 7 million homeowners went into foreclosure during the financial crash of 2008. If only half of those who went into foreclosure went on to become renters, the demand for rental housing would have increased by 10 percent in a short period, pushing up prices.
Nola.com conducted its own survey and discovered that the average New Orleans family spends around a third of their income on rent which is also true for a third of the major metro areas in the US. However, New Orleans has been particularly hard hit because of the downturn in the oil and gas industry and the capping of the film tax credit has caused jobs to move elsewhere.
“We’ve only been up for a few years – we’re due to flatten out and go down a little,” real estate appraiser Wade Ragas said. “That’s a little oversupply condition and that will put downward pressure on price, downward pressure on rents and things will stay on the market a little bit longer in some of the neighborhoods.”
With the federal reserve raising interest rates, a trend which may continue, the cumulative effect has been a continued cooling of house buying. If jobs aren’t there for people to pay rent then a correction could look to be on the cards. The kind that New Orleans will need to make it affordable, though is still a long way off.
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