NEW ORLEANS, LA (WVUE) - First-time home buyers may face higher prices in New Orleans than they would in many other places around the country. That's according to a new study by Bloomberg News that looked at the 100 largest U.S. metropolitan areas and ranked them from the most to least expensive for those 25 to 44 years old.
"The people who have moved to New Orleans with the opportunity to live in our charming city, with its 24/7 environment, in a small walk-able town, that's amazing stuff, so, yes, they're now running into a bit of an affordability wall," said real estate consultant Wade Ragas.
The study says the rankings were based on an affordability gap, meaning the difference between the median income and the minimum salary you would need to buy a first home in that city. The least affordable cities were Honolulu, followed by San Jose, Los Angeles and San Francisco. New Orleans ranked 27th on the list. We came in cheaper than Seattle, but more expensive than Phoenix,Spokane and Denver. Des Moines was the most affordable place on the list.
"If you look at the average price of a house in the suburbs here it's about $207,000, our average household in the suburbs making around $55,000, so, we've got houses priced at about 3 and half times income by national standards that isn't bad, it's not great," said Ragas. "Where's it bad, go along St. Charles Avenue, two or three blocks on either side and you're going to see housing prices that are up now at 250 to 300 a foot, they're going to be dealing with $600,000 houses,not $200,000 houses and the income is only a little bit higher."
Local real estate agent Lara Schultz says if you're looking to buy your first home, don't let the study discourage you.
"You've got the new Marigny and the new Bywater all the way to North Galvez being developed for single family ownership and those you're probably going to see prices between 150 and 200 which is your typical starter price point," said Schultz with Nola Realty.
Ragas says there may be good news on the way for first time home buyers, "I think we're getting near a top on prices, I think we may be at a top on rents, nothing terrible, but it's always a cyclical market, we've been running up for a long time, I think we're getting near a top," said Ragas.
Baton Rouge ranked more affordable than New Orleans for first-time home buyers. It came in at 87th on the list.