NEW ORLEANS-As the New Orleans metro area continues to recoup jobs and residents, the region’s apartment market has improved, and the outlook for the sector is bright, according to Mark Inman of Coldwell Banker Commercial TEC Realtors.
Over the past 10 years, the New Orleans population decreased by nearly 30% due to Hurricane Katrina and the subsequent flooding. The region lost nearly 185,000 jobs, as well.
However, recent forecasts from the University of New Orleans suggest that the region’s population could rebound to 98% of its pre-storm population by 2015. Additionally, the institution forecasts 526,200 jobs by the end of 2012 – representing 87% of jobs available pre-Katrina.
At the end of the first quarter, the marketwide vacancy rate was 8.8%, down from 9.3% at the end of 2010, according to Reis Inc. Much of the demand is driven by the hospitality sector, which has added hundreds of jobs as new and shuttered hotels open, Inman notes.
Inman tells GlobeSt.com that apartments in downtown and the Garden District have performed particularly well. “There’s enormous demand in those two areas, and because of lack of supply, it’s hard to keep a building from being a 100% occupied,” he notes.
Recently, Downtown Development District president Kurt Weigle noted 1,259 residents live in downtown apartments; 10 years ago, 951 residents had the same living situation.
Another 400 lived in condominiums 10 years ago; today, 1,616 reside in downtown condos. The average price per square foot of downtown residential real estate in 2001 was $1.26 per square foot, and it now stands at $1.75.
Multifamily developers continue to add inventory to the market. In downtown, for example, the Hibernia Bank Building is under renovation into multifamily units, Inman notes. On a marketwide basis, four projects are under construction totaling 566 units. That number is roughly half of the city’s annual average, according to the US Census Bureau.
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