Rents and occupancy rates remain high in New Orleans' apartment market
Don Ames Reporting
The most recent report on apartment occupancy in the New Orleans area indicates landlords have no reason to lower rents.
Local real estate consultant, Wade Ragas, expects occupancy rates will remain high in the region for, at least, the near future.
"Because we have gone through a number of years, trying to replace the damaged housing stock," Ragas says. "The market here has grown in population, particularly in Orleans Parish, and the result is that all the better quality apartments are pretty much full or they're at 94, 95 percent occupancy."
And, as occupancy rates go up, rental rates follow.
"I don't think we've seen a top in either," says Ragas. "There's not that many new units coming into the market. There's some growth of new units in and around the CBD, but they're very expensive units and they're in high-rise type properties, mostly."
That area, the Historic Center, is already the most expensive area for apartment dwellers, and the most popular.
"It has been for a couple of years," Ragas says. "There's a huge influx of jobs and people into the area surrounding the business district. It extends into parts of Mid-City, into the Quarter, the Faubourg-Marigny, Bywater, the Annunciation Square area of the Lower Garden District and the Warehouse District."
"That area has in-migration of new residents, job growth and more jobs coming with the medical complex nearing completion."
The average rent in that area was $1,379 and occupancy was at 96 percent, according to the spring edition of the Greater New Orleans Multi-Family Report.
Rents were lowest in New Orleans East, averaging $709. Occupancy rates there were 91 percent.
Kenner was the only submarket of the New Orleans area with an occupancy rate less than 90 percent. 84 percent of Kenner's apartment units were rented at an average of $830 per month.
"The Kenner market has not had the job growth that you usually associate with the area where an airport is located," says Ragas.
Still, Kenner's occupancy rate is up from 81 percent at the same time last year.
"And the new airport project has the potential for bringing Kenner back to the sort of economic dynamicism that's associated with the area of a city where its major airport is located," Ragas says. "So, I'm optimistic about the future there. But, in the near term, that's one of the weaker housing markets in the region."
Rags says the Metairie market is continuing to do well. "It's in the 94 percent or so range. Rents are rising slowly, but there's been very little new construction in Metaire, now, for almost ten years." The new construction that is occurring in Metairie is a large one, by 1st Lake Properties, in the Elmwood Industrial Park area.
The region as a whole, though, appears to have established itself as a strong rental market in the years since Katrina, with Orleans Parish having become a steady anchor.
"New Orleans is becoming a 24 hour, seven day a week city in the downtown area," says Ragas. "It's drawing a lot of younger, high-tech residents, and it's attracting a diverse group of firms from around the country. I think it's a stunning achievement for Orleans Parish, in terms of where it was ten years ago."