News Summary
A recent Zillow study projects major declines in home values across Louisiana, particularly in six cities with Houma seeing the largest drop at 9.4%. New Orleans, Lake Charles, and other cities also face significant reductions as the state’s housing market struggles. Experts attribute these declines to inflation and rising interest rates while hinting at signs of stabilization such as stabilizing insurance costs. Despite ongoing challenges, experts foresee a potential rise in home sales in the coming years.
New Orleans — A recent study by Zillow has projected significant declines in home values across Louisiana, with estimates suggesting that six cities in the state will experience some of the steepest drops in the nation over the next year. The projected declines come as the Louisiana housing market has been in a downturn for more than two years, contributing to a challenging environment for homeowners and potential buyers alike.
Among the cities forecasted for declines, Houma is expected to see the largest price drop at approximately 9.4%. Following closely are Lake Charles, with a projected 8.9% decrease, and New Orleans, anticipating a 7.2% decline. Other cities such as Lafayette, Shreveport, and Alexandria are also on the list of cities facing significant home value reductions.
Notably, smaller towns in Louisiana may experience even more severe declines. In particular, Opelousas is projected to have the largest decline among the 500 largest housing markets in the U.S. at 11.6%, while Morgan City is expected to see a 10.6% drop. This forecast highlights the widespread struggles in the Louisiana housing sector, indicating that no city included in the study is expected to experience an increase in home values over the coming months. In contrast, Baton Rouge is projected to have the smallest decline at 3.6%.
This recent report aligns with findings from the University of Mississippi, which ranked New Orleans’ housing market last among 100 surveyed cities. The competitive real estate scene in New Orleans has garnered negative attention, with experts labeling it as the toughest city in America for real estate transactions. Furthermore, Baton Rouge has been ranked 92nd in the same assessment.
Experts attribute the ongoing challenges in the housing market to various factors, including inflation, rising interest rates, and steep property insurance premiums. In the year leading up to 2024, it was reported that two out of every three ZIP codes in New Orleans experienced price declines. Additionally, data from the Metro New Orleans area indicated a 3.8% decrease in closed sales in the first quarter of 2025 compared to the previous year, adding to the challenges facing the housing market.
Despite these negative trends, there are signs of some stabilization in the market. Reports indicate that insurance costs may be stabilizing, and the inventory of homes for sale is gradually increasing. As of March 2025, the average sales price for homes in Metro New Orleans stood at $358,680, reflecting a 5.3% year-over-year increase. On the other hand, the average number of days homes spent on the market rose to 71 days, marking a 9.2% increase compared to the same period last year.
In terms of specific sales trends, closed sales in Orleans Parish showed an 11.7% year-over-year decrease, with a total of 196 sales recorded in March. Moreover, the number of new listings across the New Orleans metro area experienced a slight decline of 1.4% compared to the previous year, suggesting potential challenges in inventory availability.
Looking ahead, the National Association of Realtors projects an increase in existing home sales, expecting a 6% rise in 2025 and an 11% increase in 2026. This optimism comes despite ongoing concerns regarding limited inventory and affordability issues in the housing market. As the situation continues to evolve, industry experts and stakeholders remain watchful of both local and national trends impacting home values and sales.
Deeper Dive: News & Info About This Topic
- NOLA: Louisiana Home Prices Forecast
- Wikipedia: Housing Market
- Fox 8 Live: New Orleans Housing Market Recovery
- Google Search: New Orleans housing market
- New Orleans CityBusiness: Home Sales Prices Upward Trend
- Google Scholar: Louisiana real estate
- Unfiltered with Kiran: Home Values in Decline
- Encyclopedia Britannica: Real Estate
- Wolf Street: Price Declines in Big Cities
- Google News: Lafayette housing market
