High interest rates continued to be the driving force in both the national and local real estate markets, with high homeowner insurance premiums adding to the challenges throughout Louisiana. Add a tightening of business credit by many banks and 2023 resulted in a mixed-bag of news for The Sanctuary. Compared to 2022, sales were down 40% from 12 to 8 homes, yet the average sale price per sf increased 4% from $266 sf to $277 sf. This 4% price increase mirrored national numbers. A concerning trend is the number of days that re-sale homes are staying on the market. The 2023 average was excellent at only 22 days, but the 12 re-sale homes that are currently for sale have been on the market an average of 122 days.
Vacant homesite sales were down 55% from 11 to 5 but this is because inventory levels continue to decrease due of the demand for new construction.
The good news is that forecasts for 2024 are much more bullish than the bearish realities of the last 18 months as the Federal Reserve is set to begin the year with a “momentous shift in monetary policy” amid signs that inflation is finally beginning to ease. Quarterly economic projections laid out after the Fed’s December meeting suggest there will be “at least three quarter-point rate cuts this year” beginning in March and followed by additional rate cuts through 2026.
While the low to mid 6% range for mortgage rates is the expected trigger for enticing buyers back into the market, just the news of possible lower interest rates has already lead to what the National Association of Realtors reports is “a surge in interest” as evidenced by a significant increase in showings in December, which is tracked electronically via lockbox openings. I can confirm that showings on my listings have increased as well over the last 14 days.
This welcomed news should produce a steady but slow return to more traditional real estate norms over the next 18 months, but don’t expect sales to increase and the amount of time homes stay on on the market to decrease until the “Spring Selling Season” gets underway and the first interest rate cut is announced. Furthermore, if selling or purchasing a new home is right for your family and will enhance your quality of life, do it, and re-finance as interest rates decrease. Remember that many lenders need business now and are offering to waive most of their re-finance fees.
Finally, I am humbled to report that in 2023 Liuzza Realty Group represented the buyers and sellers of $8,375,000 of both on and off-market homes in The Sanctuary, which is a testament to the strong relationships that I have developed over my 16 years as a resident of The Sanctuary. This, combined with my company’s foundation of "Experience, Professionalism, and Attention to Detail” makes me and the Liuzza Realty Group uniquely qualified to represent you and the special properties of this community.
I appreciate your ongoing trust and confidence as we continue to work tirelessly to earn your business.