The French Quarter is experiencing a glut of residential property for sale
There's the two-bedroom condo with "beautiful floors" renting for $2,000 a month. Next door, there's the "perfect in-town home or gated getaway" selling for $400,000. And just a few doors down, there's a "one of a kind French Quarter apartment" renting for $1,950 a month.
And that's just on one side of the 1000 block of St. Peter Street in the French Quarter. Across the street, a "luxury two-bedroom" apartment is renting for $1,950, and there's a "fantastic rehab opportunity" for sale for $649,000.
Such is the nature of French Quarter real estate this spring, as residential real estate agents enter their busiest season. It seems nearly every block in the French Quarter has a "for sale" or a "for rent" sign hanging out front, and some of them, like the 1000 block of St. Peter St., have multiple listings.
Nearly one year after New Orleans city officials began enforcing a ban on short-term rentals in the French Quarter, the inventory of available real estate is at the highest levels that real estate agent Robert Ripley has seen since the months after Hurricane Katrina. Ripley said the unusual market conditions are being driven by a confluence of apartment development in the Central Business District, low oil prices, short-term rental regulations and the ups and downs of Hollywood South.
"We have a lot of inventory now, and there's no question that the unfair prohibition on short-term rentals is part of that," Ripley, who works for French Quarter Realty, said. "This is almost our Christmas season between now and the end of June, and it'll be interesting to see how much of that inventory we can move."
Michael Wilkinson, also of French Quarter Realty, said that some of his clients have been converting short-term rentals into "what they should've been in the first place: Long-term rentals."
"We're seeing that, which we kind of expected, and some people are keeping them for themselves," he said. "It's put a lot of things on the rental market because of that."
But the large inventory of long-term rentals has made things challenging for landlords. John Ferrara, a longtime French Quarter landlord and a former resident, said it's as challenging to find long-term renters as ever.
"People who had condos and second homes in the Quarter, they used them periodically and then they rented them out the rest of the time. Now they can't do that," Ferrara said. "You can't rent -- I have vacancies for over a year now."
But he said even in the best of times, it's been difficult in recent years to find renters willing to put up with all of the shenanigans that go on in the French Quarter. He said between vagrants sleeping on steps and noise complaints, tenants just aren't willing to put up with things.
"What were assets are turning into liabilities now," Ferrara said. "My present rentals, it takes four months to pay just the property taxes. I'm blessed -- I don't owe any money on them. But these poor people paying notes on these properties that depended on the money from short-term rentals can't depend on them anymore. It's horrible."
Ferrara said he's considering selling some of his properties, but he's worried he's not going to be able to find a buyer.
But even with the high inventory, Ripley said that prices still aren't budging. The average per-square-foot cost of a property is still hovering around $584 per square foot for a Class A property, Ripley said, and there is still a market for quality.
"When you offer a premium, international-level property, they sell," he said. "Most of the French Quarter for-sale market is not pressured to sell."
But the apartments are a tougher sell lately, especially with the type of apartments that are being offered in the Central Business District.
"The rental market in the CBD is incredible because of the new towers coming up and undercutting us by about 30 to 50 percent and offering parking, which is very difficult and very expensive" in the French Quarter, Ripley said. "Those people are being moved over into the CBD because of the large square footage and the low rates."
For years, he said French Quarter Realty used to have handouts with listings of apartments and corresponding photos running one to two pages. But now, "we have four pages of apartments."
"I have one client that just rented a $1,200 apartment, a guest quarters behind the main house, that he had on the market and after a year he finally got someone," Ripley said. "It's just been very difficult because it impacts the investment buyer, and now is competing with a whole new market in the CBD."
For full article: http://www.nola.com/politics/index.ssf/2018/03/french_quarter_rental_properti.html