Villere Realty Blog

You have a savings account, right?  At the very least you sock away a little every month in your mattress, no?  Rainy days do come, you know.  As do opportunities.  Or windows of opportunity.  Like the space shuttle entering the Earth’s atmosphere, some moments have to be just right.  AND THIS is why if you don’t buy a primary dwelling or investment property in 2011 you will watch a window close.  Wait for it.

Oh sure, you can buy real estate any old time and pay any old price too – but any old rate?  No.  I spoke with  a client buyer just yesterday that quoted me a rate of 3.78%.  That’s CRAZY.  Crazy!  When I bought my first house some 14 years ago I was uber thankful to get 6.25%.  Other clients recently have been getting in the neighborhood of 4.25%.  So you see, this is awesome.  But it won’t last.  It won’t.  It can’t.

You do know there are FHA loans out there that require as little as 3.5% down payment, right?  Of course, you must qualify.  But they’re out there.  Pair that with the supa dupa low rate and my money’s on your monthly payment being less or comparable to your current rent (which we all know is likely going up this year, right?), and voila – deal of deals.

Recently I chatted with a budding photog that had come to the recent conclusion they were never leaving New Orleans.  The decision was not brought on lightly.  It’s taken years.  Doubts, discussions, suppositions, and the like.  So my next thought was “Well, let’s find a place for you to buy.”  Their response was “That’s the last thing on my mind.”  And the next thought in my head is “Really!?”

I mean REALLY.   Paying a landlord even another month’s rent after coming to this conclusion just seems silly.  Okay, find the right place, yada yada yada, what neighborhood you like most, shotgun v. raised basement, on and on.  But REALLY, stop paying rent.  Invest in your self – and your city.  There’s a stupendous stock of inventory out there – start shopping.

As windows go, I think by year’s end some of the best acquisition opportunities will be in the rear view, and so will those crazy rates.

Reflecting on 2010, all I can offer is: to do business in this town you need thicker skin.  Forget our crazy property taxes and equally crazy insurance rates.  Forget Chinese sheetrock.  Forget the Saints and whether they win another Super Bowl.  What if oil seeps uncontrollably into the Gulf thereby crippling the local economy on many levels?  What if the city’s primary property database crashes and for all intents and purposes ceases the conveyance of property from seller to buyer additionally hindering the local economy on many levels?  And, most recently, what if you can’t even drink the water?  What!?  Really???  On top of everything else we have to question whether we can even drink the water?  Sheesh.  Thicker skin, I tells ya, thicker skin.

As 2010 revealed itself day by day I began to more fully appreciate many things, among them: timing.  In real estate we are taught (and it’s true): location, location, location.  But in life (and in real estate too): timing is everything.  Personally by the time the city crashed at the end of October and couldn’t record property (which is still in effect today 12-30-10, mind you) I had had 4 of my 6 deals close.  If it had been just another few days, perhaps none of those 4 would’ve closed.  As time passed (some) title attorneys gained the ability and confidence to close deals, so 1 of my 2 outstanding closed.  The last one, the 6th one, has yet close.  Part of that has to do with the seller being in a federal penitentiary, but I digress.

No matter what is thrown at you though, you gotta get outta bed in the morning.  No one ever succeeded by stopping.  Better mousetraps will always be built.  Will they be built by you?  Will you assist in their construction?  Or will you from the view of your bed lament their invention and doubt their effectiveness?

“No one visits New Orleans to drink the water,” said local Finis Shelnut on the national news back in late 2005 with regard to the query of will tourists return to our submerged burg when potable water was questionable at best.  Amen.  No one lives in New Orleans to drink the water either.  We live here because we do.  We’ve mused on this notion for centuries, moreso in the last five years, and undoubtedly it will be a topic of conversation until ? ? ? Until some other roadblock, carbuncle, or man made and/or natural disaster presents itself.

I was on a broker tour this fall when I overheard another agent bemoan the city’s state of affairs “I don’t know why I’m here.  I can’t do any business anyway.”  Ick.  Really?  Bad attitude.  Conversely this May I walked down Prytania to a midnight show with the heavy choking stench of petroleum crude hanging in the air, making me sneeze uncontrollably and my eyes water as if I’d chopped onions endlessly.  I marched on though my body physically protested.  All I could muster was “This sucks.”  Yes, yes, many things about this year could easily fall into that category, but so what?  Life goes on.  Always.

We all know interest rates are low, right?  If you aren’t a buyer, why is this important to you?  Because maybe you should be a buyer.

Right now, if you pay rent, chances are most any loan you can acquire to purchase a similar space to the one you rent could very well be as much or cheaper than your present rent.  So should you just continue to rent and not bother with homeownership?  Could be, but my vote is no.  Furthermore I’ll argue rents are on the brink of increasing.   But why would rents be on the rise?  I’m glad you asked.

Simple: supply and demand.  Fewer people qualify for loans nowadays and fewer buyers means more renters which means more demand which means less supply which means what?  Higher rent.  I don’t care where you live or what market you’re in, this formula will hold true.  So, brace for higher rent or invest?

A single family home is a liability; a multi-family home is an asset.  People will always need a place to live.  If you lose your job tomorrow and you own your own home would you rather be on the hook to your lender alone or gather rent from a tenant and ease the burden?

Don’t get me wrong.  Landlording is not for everyone and is truly wearing another hat.  But I think the writing is on the wall.  The more sought after rentals go fast now.  Faster than I can remember.  Some of my own personal rentals I’ve leased in the past 6 months I’ve leased to the first person that’s enquired.  Coincidence or am I undervaluing my own property?

I love my tenants.  Love them.  I couldn’t do what I do without them.  Will I be raising my rents in the next little while knowing full well some or possibly all of them may read this?  Quite possibly.  Do I want to raise the rent on any one party or dwelling?  Of course not.  I want what the market will bear (bare, you pick).  I have a family to feed and future to consider and undervaluing any of my assets certainly is not a way to achieve financial stability.  I think my tenants would appreciate that.  I’d even encourage any and all of them to consider investing in multis now too – whether I represent them or not.

So you be the judge.  If you’re on the hunt for an apartment, how’s the search going?  Finding what you’re looking for or a little frustrated?  Perhaps rather than seeking out a space you can call home on a temp basis with the possibility of paying more rent in a year or two (or less!), the time may be right to embrace the responsibility of being a homeowner and possibly a landlord.  Rates will climb again, but when?

Lately this little phrase has been rattling around my head: “Become what you are.”  But why?  Why are all my vacant thoughts consuming me in this way?

Once when I was employed at the PJ’s on Maple St I was out front sweeping up the cigarette butts and such.  A woman from the book shop up the block greeted me as she went inside to get a cup and mentioned something about my task at hand.  I offered simply “It’s what I do.”  And without a thought she replied “It becomes you.”  What!?  Ick!?  It becomes me!?!!  Really!?  No thanks!  But oh my, how right was she?  We are what we do.  We in effect become what we are.

Another time many years later I was working an opening shift at the Starbucks on Magazine and Washington (yes, I wore the green apron for many a year), and as the newspaper delivery guy was making his way on to his next stop we exchanged goodbyes only his was somewhat surly and mopey.  At this time as if inspired by the bookshop lady I offered “We build our own cages.”  He stopped in his tracks.  Like me years before he didn’t like the notion, not one bit.

But I think my favorite thought on the subject may be The Funeral Museum of Houston’s slogan and that is “Any day above ground is a good one.”  So true.  It is what it is.  We are what we are.  Carpe diem.  Sieze the cheeseburger.  Or the blueberry mojito.  Whatever it is that is becoming you.

This summer while traveling in the Pacific Northwest I brought my family to a vibrant and sleepy little spot on the Olympic Peninsula just west of Seattle called Port Townsend.  There we happened upon an old brick storefront with a advert from yesteryear scribed across the side for Owl Cigars.  I joked with my wife that when we returned to New Orleans I would take up tagging and use “Owl” as my moniker.  She didn’t laugh; but I did.  And so a marriage goes.  Opposites often attract.

In Post Katrina New Orleans in any given neighborhood you can find some of the most amazing tags, some times in quantity.  Some with international acclaim (read: Banksy), others not so much.  I suppose the largely depopulated landscape was ripe for opportunity for the faceless tagging masses to convey their message to returnees and newcomers alike.  I understand my affection for this artform is not shared by all.  In fact, just this week a little debate ignited on my Facebook page over a newer set of tags I discovered on my walk to work.  Simply and purposefully were two tags next to one another.  One, a signature gray box by The Gray Ghost more commonly known as Fred Radtke, and the other, a black stencil on white background by artist(s) unknown stating in a musical scale “READ BETWEEN THE LINES.”

To me the image says it all.  When I posted it, the mixed response left me quizzical.  In the recent past a young man had been caught on video in the wee hours in the same neighborhood hand scrawling tags.  The video was featured on the evening news along with who?  Fred Radtke.  Stating how the neighborhood (read: Freret) was going places and for something like this to take place is unwelcome.  I don’t disagree with Fred.  My issue is this is only a small portion of the story as Fred’s tags were not even mentioned.

So I often wonder, what if the tagging dried up tomorrow?  Would Fred still go around willy nilly mapping out gray boxes?  I’d like to think so.  He now openly takes credit for his work in neighborhood meetings but to my knowledge no one has yet to put it back on him that his work is arguably as much a tag as any stencil or scrawl that may appear.  After all it takes just as much effort to paint gray over a tag as it does to attempt a color match, does it not?

For certain tagging will not dry up any time soon, and Fred may easily get out of bed each day knowing there is a canvas out there for him too. ~ OWL

Okay class, please pull out your favorite map of New Orleans – whether its your GPS schmart phone, a 1979 edition of a world atlas (like my mother-in-law), or a 1981 K & B locator city overlay (mine’s under glass) – and find St Charles Ave.  Found it?  Good.  It’s that big 2 way street that has the streetcar, runs in front of the uptown universities, and basically bisects the city from north and south, right?  Right.  Okay, now find Napoleon Ave.  Found it?  Good.  It’s that other big 2 way street that has a big median and runs the first leg of most all uptown parades, it crosses St Charles, and it too basically bisects the city from east and west, right?  Right.  Okay, now today’s lesson: geometry. 

Look in the north west corner of the St Charles and Napoleon intersection and find S Saratoga.  Found it?  Good.  4525 S Saratoga was a teardown piece of property that sold in February 2010 for $15,000.  See that?  It was pretty bad.  Pret-ty bad.  Okay, now keep looking at that address and mark today’s date: August 17, 2010 – about 6 month’s difference, right?  Right.  4525 S Saratoga has since been demo’d, rebuilt and resold for – - – are you ready?  $256,500.  Pretty great, right?  Right.  Does this mean anything other than the facts stated?  Some would say no, but I’m here to say yes. 

Look at your map again, and cross Napoleon and find Peniston.  1719 Peniston was a fair condition home that sold in February 2009 for $155,000.  See that?  Beautiful home.  Ill kept – til now.  August 5, 2010 1719 Peniston sold – fully renovated – for $625,000.  Amazing, right?  Right.  Now keep in mind all of this activity is on “the other side of St Charles.”  Values t/here like this in my experience is unprecedented.  We’re in a recession, right?  It’s a buyer’s market still, right?  You tell me, but I’m thinking not.

Now cross Napoleon again and find Jena over one block.  2217 Jena is a poor condition home that posted as sold yesterday August 16, 2010 for $40,000.  This poor house has been falling down around itself since before Katrina, and it has finally found a new owner.  Based upon the other 2 address examples 1 of 2 scenarios will play out: 1, it will be demo’d and resold in 6-8 months time – or – 2, it will be renovated and resold in 6-8 months time.  My crystal ball says option 1, and it also says for $137/ft.  

Note the shape these three address examples have created: a triangle, a dynamic triangle.  Pointed straight at the Freret corridor.  Okay class, our geometry (and subsequently geography) lesson is now complete.  Go to recess, and when we come back I want you to be thinking about rates, percentage rates.  If these home values are stable, arguably climbing, and rates are super low what does that mean for you as a buyer?  And as a seller?  It means the seller’s market is on the horizon.  Just sayin’.  Now hit the swingsets and think on it!

If you even remotely pay attention to the real estate market in New Orleans then you know that for as many for sale or for lease signs you may see around, there is significant movement.  5 years now into post-Katrina land the population continues to grow.  Sure we have the old guard, blue bloods entrenched in business and in politics, but we have a lot of new blood too.  So it’s a mix, a BIG mix.  Multi-million dollar homes are selling in the FQ, GD, and the avenue, and at the other end of the spectrum Philly musicians are signing leases (I signed a musical couple from Philly today).  They’ve never lived here, have no family here, and know a little about the city – and yet here they are.  Why?  Everyone will of course have a different reason to move here or to stay here, but most importantly it’s steady.  Those that choose to live here do so decidedly.  And with interest rates at historic lows and values lower but stable and steady there has never been a better time to claim your place in “The City that Care Forgot.”

Two quick items completely separate from each other, but who has time to blog both?  Not me.

Firstly, I have a new lease listing at 1732 St Roch.  It’s a gorgeous maybe 100+ yr old shotgun slightly off the more traversed roads in the city about 1250 sq ft with the original hardwood floors, high ceilings, off street parking, and pets ok – all for $650!  Please keep it in mind.

Ok so maybe my last post will auto-queue and appear on Facebook, maybe it won’t.  Capital double u whatever.  In the mean time, I have some exciting news!

The remainder of my building on Magazine St ay 1365 and 1367 in the Lower Garden is mere days away from completion.  And when I say completion I mean it’s inhabitable again.  I still have to get the gas meter turned over.  I still need to add central air in the Spring.  BUT!  The bathrooms will work!  The roof won’t leak!  And I can really move in.  Really honest to goodness move in.

But wait!  There’s more!  I only have 3 agents, and truly all of this space is more than adequate, so here’s what you need to know: I’m looking to share space at least for now the remainder of 1365.  What that amounts to is residentially speaking a 3 bedroom, 2 full bath just done.  OR – as it’s zoned business – commercialy it means if you have an upstart or want an office out of your house I have space available.  And it’s on Magazine!  You can get a sign, hang it outside below mine.  The whole 9.

So, let’s do this.  Original hardwood floors, new sheetrock/paint, and on.  I can even furnish, taste permitting.  Doubt my Chewbacca lamp will do it for you, but you never know.