At annual NOMAR symposium, experts highlight optimism, growth and resiliency in New Orleans despite challenges

This year’s theme was “Adapting to Unpredictability,” chosen for being relevant and timely amid high interest and insurance rates as well as commercial and residential markets in which people are still grappling with post-pandemic adjustments.

“We are facing unprecedented times in the market today and adding new headwinds by the week,” said Mignon Richard Díaz, the 2023 Symposium Committee chair. To illustrate this, she highlighted the possibility of saltwater intrusion in the New Orleans area water supply—a scenario which wasn’t even being contemplated just a few months ago. “We hope you leave today with information to take home to your families and integrate with your clients.”

The symposium comprised four sessions covering a range of topics, including local, regional, and national economic perspectives, banking, insurance and the environment, and the evolving real estate development model. Here are some key takeaways from the Symposium about the New Orleans market as well as projections about what the future might hold.

The national economy is surprisingly resilient.

Last year, most experts predicted the nation would be in a recession at some point in 2023, said Danushka Nanayakkara-Skillington, Assistant Vice President for Forecasting and Analysis at the National Association of Home Builders. So far, those fears have been unfounded.

Nanayakkara-Skillington noted that the GDP has grown by more than 2% so far this year and a 4% growth is expected for the 2023 third quarter thanks to consumer spending. Some continued growth is projected over the next two years. She also pointed out that the country has recovered essentially all jobs that were lost during the pandemic.

To keep the momentum going, Nanayakkara-Skillington said experts hope to see more people return to the workforce, especially young men and those in the gig economy.

“There are still over five million people unemployed, but the jobs opening rate is at about 9.6 million. That means there’s about two jobs available for every person who is unemployed,” she said.

New Orleans’ job recovery is picking up momentum.

Paul Hendershot, Managing Director of Analytics for CoStar, said the New Orleans area lost about 108,000 jobs in 2020 amid the pandemic. So far, job numbers haven’t rebounded back to that level, with industries like hospitality, government, transportation, and utilities still with job counts below pre-pandemic levels. However, Hendershot pointed out, jobs in construction, education and health services are above pre-pandemic levels, indicating that there is continued opportunity for growth.

Gary Wagner, Acadiana Business Economist Endowed Chair at the University of Louisiana at Lafayette, said he is encouraged by upcoming employment projections in New Orleans.

“I think the numbers look to be the strongest in the state over the next four years,” he said. “Part of what is happening in New Orleans is that we’ve seen tourism rebound quite a bit in the last six to nine months. We’re catching up to where the nation is.”

New Orleans is adapting to changing needs in the office and industrial markets.

Hendershot applauded the creativity of property owners and architects as many businesses are still trying to determine how much time employees should spend in offices and for what purposes. He said the trend now is for offices to be collaborative working spaces for teams rather than cubicle farms. In addition, he said some local property owners haven’t been afraid to demolish buildings or repurpose them for other uses if they no longer work as office space, which helps keep the local market stable.

Similar activity is taking place in the local industrial market, he said.

‘We’re seeing a lot of industrial space under construction, much of it speculative,” he said. “I believe it will be leased. It’s definitely a sign that industrial developers have found New Orleans and see value here.”

Banks are still making deals but are being more conservative.

Brian Andrews, Executive Director of the Real Estate Research Institute at Louisiana State University, said bank leaders have liquidity, but are being a bit more cautious about how much to lend. John Zollinger, Executive Vice President and Chief Banking Officer at Home Bank, said the failure of some regional banks, largely due to too many loans in one area, has also caused banking leaders to reflect on their own practices.

“We’re using our experiences to think about the fact that if the cycle turns down and we make bad loans, that is how we fail,” he said. “That’s why credit quality is so important. I think banks are using their capital more judiciously. We’ll entertain new clients, but we have to make sure it makes sense for both parties.”

It’s still a good time to be in residential real estate.

Many Symposium panelists agreed that more people are adjusting to a new normal in the residential market, where mortgage rates hover around 6 to 7 percent and homes may stay on the market longer.

“It’s not a bad time to be looking for a house right now,” said Robert Bergeron, principal in Crescent Title LLC and the law firm of Bergeron, Douglass, Frosch and Mack. “Traditionally, a lot of people buy houses in the spring and summer. Now that we’re getting into the fall, it’s a great time to be looking, especially if it’s a house that’s been sitting for a little while.”

Bergeron said he’s also seen sellers consider different options, such as renting out homes as investment properties and using owner financing to close deals. By being creative and flexible, sellers can take advantage of new opportunities.

But, whether someone is in the market to buy, sell or both, Bergeron said using trained experts in transactions is the best course of action, especially those who are locally-based and know the trends in New Orleans.

“I can’t stress enough the importance of using a qualified real estate agent and qualified lenders,” he said. “Our local people know the market and know the appraisers. They know how to deal with a hiccup when it comes up and how to make things work. They’ll meet with everyone involved to sort it out. There’s a lot of advantages to using those experts.”

Originally founded in 1915, NOMAR is dedicated to serving a diverse cross-section of industry professionals from all 10 parishes in the Metro New Orleans region. NOMAR serves about 7,100 members through the primary Association and provides commercial brokers and agents with specialized services through the Commercial Investment Division (CID). For more information or to contact the organization, visit www.nomar.org.