Find out about the latest news in Madisonville, Louisiana as well as St. Tammany Parish. We will keep you “tuned in” to all of the information about Southeast Louisiana as well as the real estate industry in general. Many new home buyers are concerned about the market, mortgage information, and builder trends. We plan on keeping you as up to date as possible on these and many more topics. There is a lot going on in the Greater New Orleans area, so you will have plenty to read!

Single-Family Built-for-Rent Construction Sees Significant Growth in Early 2024

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Single-family built-for-rent (SFBFR) construction saw substantial year-over-year gains in the first quarter of 2024, as builders aimed to increase rental housing options in a market burdened by high mortgage interest rates.

According to the National Association of Home Builders (NAHB), which analyzed data from the Census Bureau’s Quarterly Starts and Completions by Purpose and Design, there were approximately 18,000 SFBFR starts in the first quarter of 2024. This figure represents a 20% increase compared to the first quarter of 2023, though it’s worth noting that the comparison benefits from a particularly weak start in 2023. Over the past four quarters, 80,000 such homes began construction, marking a nearly 16% rise from the 69,000 SFBFR starts in the previous four quarters.

The SFBFR market provides much-needed inventory amid ongoing challenges related to housing affordability and down payment requirements in the for-sale market. This is particularly relevant as more people seek additional space and prefer single-family structures. SFBFR homes often have different structural characteristics compared to other newly built single-family homes, especially regarding size.

Despite a cooling investor demand for both existing and new single-family homes due to higher interest rates, builders continue to pursue smaller SFBFR projects for their own operations. Given the affordability issues in the for-sale market, the SFBFR sector is expected to maintain a significant market share, even if the sector experiences some cooling in the upcoming quarters.

 

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Key Insights and Tips to Navigating the Spring Home Buying Season

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The spring home buying season, typically the most active time of year for home shopping, is about to begin in earnest. This year, the market promises to be relatively calmer, offering more options for buyers compared to last year. Although the boost in newly listed homes is expected to be modest, it should translate to increased choices for home shoppers. Those prepared to move quickly may even find some relief in price reductions in their market.

“Affordability is still a major challenge, but those shopping now should see early-season price cuts on leftover or mispriced inventory,” says Zillow® Chief Economist Skylar Olsen. “However, that may dry up fast as the weather and housing market warms with the season.”

Key Factors in the 2024 Spring Housing Market

1. When Does the Spring Home-Buying Season Begin?

The spring home shopping season generally runs from April through June in most of the country. Warmer climates tend to start earlier, while colder regions may have shorter seasons starting later. Warmer weather and school schedules, especially for families planning to move during summer break, drive the seasonal shopping boost.

The busyness of any given market depends on various factors, including the economy, local wages, and the availability of homes for sale. Despite a persistent shortage of listings and high home prices, sellers are expected to list homes in greater numbers this spring, as buyers and sellers adjust to the higher interest rate environment.

2. A Seller’s Market with Buyer Leverage

Nationally, it’s still a seller’s market due to competition for the limited number of listings. However, sellers must price their homes appropriately to meet buyers’ affordability constraints. Buyers are stretched thin, and sellers need to be realistic about pricing to sell quickly and at the desired price.

Keep an eye on mortgage interest rates, which can significantly impact home affordability. If rates rise sharply, as they did in October 2023, it could push homes further out of buyers’ reach and lead to more price cuts.

3. Inventory Trends

January listings show a slight improvement from last year, with new listings up nearly 6% and total listings rising more than 3%. Although there are more homes for sale than last year, the increase is not yet enough to shift the market in buyers’ favor. Sellers remain in a strong position, holding a record amount of home equity that they may look to cash in.

4. Home Price Stability

Home values are finally leveling off after significant increases during the pandemic. Nationally, U.S. home values rose 3.6% last year, and about 26% of homes sold above their list price in January, three percentage points less than the previous month.

Most of the largest metros showed slight declines in home values in January, with New Orleans, Minneapolis, Buffalo, Cleveland, and Pittsburgh experiencing the largest month-over-month dips. Year-over-year, however, home values have increased in 47 of the 50 largest metro areas.

Zillow economists predict that homes nationally will appreciate by 3.5% in 2024, maintaining a similar pace to last year.

5. Volatile Interest Rates

Interest rates remain volatile as the Federal Reserve continues its efforts to control inflation. Mortgage rates can significantly affect monthly payments, so it’s crucial to stay informed about rate changes and consider locking in rates or buying down the rate to lower monthly payments.

6. Fast-Moving Market

The typical time for a home to go from listing to under contract was 29 days in January, slightly less than a month earlier and two days shorter than a year ago. Competitively priced homes are selling in about two weeks.

Tips to Prepare for the Spring Home Buying Season

1. Get Pre-Approved

Getting pre-approved for a mortgage helps you understand what you can afford and positions you as a serious buyer. It also allows you to move quickly when you find the right home.

2. Talk to a Local Agent

Discuss your wants and needs with a local agent to understand market conditions in your desired neighborhoods. An experienced agent can provide valuable insights and help you navigate the buying process.

3. Use Zillow’s Search Filters

Zillow’s search filters can help you find homes that have been on the market for more than a month, potentially leading to deals or concessions. Filtering by monthly payment ensures you focus on homes within your budget.

4. Monitor Mortgage Rates

Stay informed about mortgage rates and explore options for locking in rates or buying down the rate to reduce your monthly payments.

The market continues to evolve, and, as it does, we’ll share the latest information and analysis at our Learning Center. Remember, there is no universally “good” time to buy a home; the best time is when it aligns with your personal circumstances and financial readiness. Hang in there and stay prepared!

New Home Sales Flat in February Due to Slight Rise in Mortgage Rates

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A slight increase in mortgage rates in February led to a stagnant reading for new home sales.

Sales of newly built, single-family homes in February edged 0.3% lower to a seasonally adjusted annual rate of 662,000, according to data released by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Despite the monthly dip, the pace of new home sales in February is up 5.9% from the same period last year.

“While new home sales remained flat in February, our latest home builder surveys show increased levels of confidence driven by the ongoing lean levels of existing home inventory,” said Carl Harris, chairman of the National Association of Home Builders (NAHB) and a custom home builder from Wichita, Kansas. “As interest rates subside over the course of 2024, additional home buyers will be priced into the market and new construction will be needed to meet this demand.”

NAHB Chief Economist Robert Dietz added, “A slight uptick in mortgage rates held back the pace of new home sales in February. Our latest builder surveys show that roughly one-quarter of builders reported cutting home prices in March. The price cuts, in combination with building slightly smaller homes, can be seen in today’s data that show a 7.6% year-over-year decline for median new home prices.”

Mortgage rates averaged 6.78% in February, up from 6.64% in January, according to Freddie Mac.

A new home sale is recorded when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction, or completed. The February reading of 662,000 units represents the number of homes that would sell if this pace continued for the next 12 months, adjusted for seasonal effects.

The inventory of new single-family homes in February remained elevated at 463,000 units, up 1.3% from January. This represents an 8.4 months’ supply at the current building pace. A 6 months’ supply is typically considered balanced. However, with only a 2.9 months’ supply of existing homes for sale, new home inventory can remain above this balanced measure.

The median new home sale price in February was $400,500, down 3.5% from January and 7.6% lower compared to a year ago.

Regionally, on a year-to-date basis, new home sales have seen significant increases in the Northeast (up 47.0%), the Midwest (up 29.7%), and the West (up 41.0%). In contrast, new home sales in the South have decreased by 13.4%.

As the housing market continues to adapt to fluctuating interest rates and inventory levels, builders and buyers alike are navigating a complex landscape. However, with the potential for interest rates to decrease over the course of 2024, there is optimism that more buyers will enter the market, necessitating further new home construction to meet demand.

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Agile Cold Storage to Build $46 Million Facility in Pearl River, Creating 100 Jobs

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A storage and logistics company, Agile Cold Storage, is set to build a $46 million, 150,000-square-foot cold storage facility in Pearl River. This development will create 100 new jobs and aligns with St. Tammany Parish’s economic development strategy of attracting logistics and distribution companies, economic development officials announced on Tuesday.

Agile Cold Storage, which serves food manufacturers, processors, and growers across the U.S., will construct the facility on 10 acres at the St. Joe Brick Works site, according to Chris Masingill, head of St. Tammany Corporation, the parish’s economic development agency.

Strategic Location

The new Agile warehouse will be strategically located near the Associated Wholesale Grocers distribution facility and Rooms To Go Outlet, just off Interstate 59. This location is expected to enhance logistical efficiency for the company.

Job Creation and Economic Impact

The 100 new direct jobs created by the facility will offer salaries around $53,000, according to a news release from St. Tammany Corporation. Additionally, Louisiana Economic Development (LED) estimates that the project will generate 95 new indirect jobs, further boosting the local economy.

“Agile Cold Storage’s investment in St. Tammany Parish demonstrates the unique logistical advantages Louisiana has to offer businesses that keep America’s supply chains flowing smoothly,” said LED Secretary Susan Bonnett Bourgeois, who resides in Covington. “This project is a win for the Northshore, the state economy, and the workers of Louisiana.”

Incentives and Support

The state has offered Agile Cold Storage an incentives package that includes a $1.5 million performance-based grant. This grant will reimburse the company for site improvement expenditures, contingent on board approval and the company meeting specific investment and payroll targets, according to the news release.

In addition to state incentives, Agile Cold Storage will benefit from workforce training through the LED FastStart program, which aims to provide customized recruitment, screening, and training solutions for businesses in Louisiana.

Masingill also mentioned that the company will take advantage of a St. Tammany Parish incentive, which reduces about two-thirds of the company’s parish property taxes for 10 years. In return, the company commits to reinvest that money into construction and other costs. The company is expected to have an annual payroll of $5.4 million.

Operations and Future Plans

Based in Gainesville, Georgia, Agile Cold Storage specializes in blast-freezing and packing food for shipping. The new Pearl River facility is expected to handle about 100 containers of food shipments per week, which will be sent to the Port of New Orleans for export, according to the news release.

“Agile Cold Storage’s investment is a testament to the robust infrastructure and economic potential of St. Tammany Parish,” Masingill said. “This facility will not only create jobs but also strengthen our position as a key player in the logistics and distribution sector.”

Site work for the new facility is expected to begin soon, with construction projected to take between eight to 14 months. Once completed, the facility will enhance the region’s capacity to handle and export food products efficiently, contributing to the local and state economy.

The new Agile Cold Storage facility marks a significant investment in St. Tammany Parish, reflecting the region’s growing appeal as a hub for logistics and distribution. This project is poised to provide substantial economic benefits and job opportunities for the local community while reinforcing Louisiana’s role in America’s supply chain infrastructure.

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A Brighter Outlook for Home Buyers in 2024

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As the new year unfolds, the housing market is showing signs of becoming more favorable for buyers, a welcome change after the challenges of recent years. Key indicators such as mortgage rates and home inventory are beginning to shift, suggesting potential relief and more opportunities for prospective homeowners.

Falling Mortgage Rates and Increasing Home Supply

One of the most significant developments has been the decrease in mortgage rates, which had soared to heights not seen in over two decades. As of early February, the average rate for a 30-year mortgage had dropped to 6.63%, according to Freddie Mac. This downward trend is expected to continue, with projections from the Mortgage Bankers Association suggesting that rates could dip to as low as 6% by the end of 2024. While these reductions may not dramatically enhance affordability, they represent a meaningful reduction in monthly payments that could provide some relief to buyers.

Simultaneously, the market is experiencing a growth in home supply. December 2023 saw a 9.1% increase in newly listed homes compared to the previous year, based on data from Realtor.com. This improvement in inventory is crucial for buyers who have been competing in an intensely tight market.

Regional Variations and Predictions

However, the impact of these national trends can vary significantly by region. According to Realtor.com‘s Danielle Hale, areas in the Midwest and Northeast are expected to see considerable growth in home prices and sales. Cities like Toledo and Rochester are forecasted to experience substantial increases in both home sales and prices. Conversely, regions that surged during the pandemic, such as Austin and Dallas, might see a decline in home prices as the market stabilizes.

Strategic Advice for Home Buyers

For those looking to navigate this evolving market, staying informed and prepared is key. Monitoring new listings closely and being ready to act swiftly remains critical, as homes, particularly turnkey properties, are still selling relatively quickly. Utilizing tools such as real-time notifications from platforms like Realtor.com, Redfin, and Zillow can help buyers stay on top of market developments.

Furthermore, enlisting a knowledgeable real estate agent is more crucial than ever. Agents with deep local market understanding can provide invaluable insights and guidance, particularly in how broader trends are playing out regionally. They can also assist in navigating the complexities of the buying process, from securing preapproval to finalizing a purchase.

Financial Considerations

Potential homebuyers should also consider their financing options carefully. With predictions of further rate decreases, paying for mortgage points to lower interest rates might not be cost-effective if refinancing is a likely option down the road. Additionally, exploring down payment assistance programs can provide significant financial support, especially for first-time buyers navigating the initial costs of purchasing a home.

Looking Ahead

As the market adjusts, the overall outlook for buying a home in 2024 is promising. With mortgage rates expected to decrease further and a gradual increase in housing inventory, the dynamics are shifting in favor of buyers. However, the market remains complex, and regional variations mean that the experience of buying a home can differ significantly depending on where one is looking.

For prospective buyers, the current environment suggests that now might be a good time to start preparing for potential opportunities in the housing market. By staying informed, working with experienced professionals, and carefully planning finances, buyers can position themselves to make the most of the evolving market conditions. As the landscape continues to change, those ready to adapt can find themselves well-placed to secure a home that meets their needs and budget.

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Covington: The Growing Gem of the North Shore

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Covington, Louisiana, once known as “the North Shore’s best kept secret,” is now heralded as the “North Shore’s Renaissance.” This quaint town, rich in history and charm, has become a beacon for new businesses, residents, and visitors alike. With the introduction of the “2030 Plan,” Covington is on a trajectory to foster growth while maintaining its beloved small-town feel.

Ashley Culicchia Cash, a local who returned to her roots after a decade, was immediately struck by the transformation of downtown Covington. “The growth has been unbelievable,” she remarks. “There’s more shopping, food, and fine dining. Even the streets seem bigger and wider. There’s so much more to do here than all those years ago.” It’s a sentiment echoed by many locals and visitors, who have voted it the best small town in Louisiana in the annual South’s Best Awards.

Covington’s charm is perhaps best experienced on foot. The historic downtown area, where Cash has set up her event-planning business, The Graceful Host Shop, is a hub of activity. Here, visitors can meander from boutique shops to wine bars to art galleries without ever needing a car. This accessibility and variety make Covington not just a place to visit, but a place to live.

Despite its proximity to the bustling city of New Orleans, just an hour’s drive across Lake Pontchartrain, Covington offers a serene escape. Its layout is unique, with small public areas known as ox lots dotting the town. These historic lots, originally used by tradesmen in the 1800s, now serve as convenient parking spaces that support the town’s bustling downtown commerce.

The historical richness of Covington is woven into the fabric of the town. Lisa Condrey Ward, co-owner of the Southern Hotel, emphasizes this blend of past and present, “You can’t ever really place Covington just in the present without also factoring in all that its past lends. It’s such a walkable, well-planned town and has a deep history of hospitality.” The Southern Hotel, a centerpiece of the town, epitomizes this spirit. Since its restoration in 2014, it has become a cultural and social nexus, hosting everything from casual cocktails to lavish weddings.

The burgeoning business scene in Covington is equally impressive. New enterprises and top-notch restaurants continue to populate the area, supported by enthusiastic local and external investors. BRG Hospitality, for example, is expanding its presence with new culinary ventures, reinforcing the town’s reputation as a burgeoning gastronomic hotspot.

Covington is not only a haven for business and pleasure but also a place of natural beauty and community activities. The Tammany Trace, a scenic biking and hiking path, invites residents and tourists to explore the lush landscapes. The town also celebrates its heritage and community spirit with events like the Covington Three Rivers Art Festival, attracting artists and visitors from across the region.

Moreover, Covington’s strategic plan for the future is focused on sustainability and thoughtful growth. This plan aims to bolster the local economy while preserving the quality of life that residents cherish. With community input and a clear vision, Covington is set to thrive as a model small town that balances progress with tradition.

In summary, Covington represents the quintessential small-town American dream, with its blend of historical charm, modern amenities, and a forward-thinking community. Whether you’re looking for a place to start a business, raise a family, or simply enjoy life, Covington offers a compelling argument to call it home. As it continues to evolve and grow, this little town on the North Shore remains a treasure worth discovering.

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