Big Easy Real Estate is “Shaped Differently” than Other U.S. Markets
by Carole VanSickle Ellis
In September 2025, home values in New Orleans, Louisiana, also often called “The Big Easy,” dipped by about 1.1% while prices in other similarly sized metro areas rose around the country. Nationally, average home values were up 0.2% year-over-year at the end of Q3 2025, and national home values were estimated to have risen about 46% from pre-pandemic levels. In New Orleans, however, the gains are much less: just under 4%.
“Local factors – from rising insurance premiums to limited demand — are shaping housing [in New Orleans] differently than in the rest of the U.S.,” wrote Axios analysts Sami Sparber, Emily Peck, and Carlie Wells in response to the data.
Zillow spokesman Mark Stayton also cited rising mortgage rates, declining affordability, and burgeoning insurance costs as factors in the city’s unusual lack of growth. In another report, Zillow predicted New Orleans could see home-value declines of more than 7% in 2026, placing it fourth on a list for weakest home appreciation behind only Alexandria, Louisiana; Lake Charles, Louisiana; and Houma, Louisiana. The top six cities on that list are all located in Louisiana. Economists say the biggest factor contributing to falling home values is a declining population.
“Louisiana is one of just six states that shrank in population from 2014 to 2024, so if this trend continues, there will be limited demand for home purchases in the next few years across the state,” said Realtor.com senior economist Joel Berner in an interview with Newsweek. While the same report predicted U.S. home prices would likely fall about 1% over the next 12 months, New Orleans could see declines much more severe due to a declining population, uncertain jobs market and rising costs of housing. For real estate investors active in this unusual and challenging market, creativity and careful monitoring of consumer sentiment will be essential to generating returns.
Still Struggling 20 Years After Katrina
On August 29, 2005, Hurricane Katrina pounded New Orleans with sustained winds of 125 mph, nearly 15 inches of rainfall, and, ultimately, massive and widespread levee failure that resulted in nearly 80% of the city being submerged by the end of August. By the time the floodwaters had receded, more than 1,800 people had died and about half the population of the city departed the area. Many would never return. Since 2000, the city has lost 23% of its population along with employers in its three main industries: tourism, shipping, and oil and gas production.
“In the present day, New Orleans is one of the weakest employment markets in the country,” observed Matty Merritt, a Morning Brew contributor in her August 2025 column. “More residents are leaving the city for opportunities elsewhere,” she continued.
Merritt also cited The Big Easy’s stark income inequality, which many analysts agree is delineated along racial lines, as a source of weakness in the local economy and real estate market.
Gregory Price, a professor of economics at the University of New Orleans, told Smart Cities that local household median income rose 12% between 2000 and 2020 (not adjusted for inflation), but, he said, “Black households in New Orleans saw no rise in median income” during that period. Price continued, “Black households particularly have difficulties engaging in the economy,” citing racism, discrimination, skills mismatch, and quality of education as sources of the economic stratification. This type of environment contributes to population decline and makes investment options unpredictable as housing affordability continues to challenge many NOLA residents.
To further complicate matters, skyrocketing homeowners’ insurance costs threaten every property owner in the area and, by extension, small businesses as well. In 2022, property insurance costs rose 16%, and they rose by another 14% in 2023. For a small business, absorbing these costs for a storefront is difficult enough. For the owner-operator, the challenges of also generating enough income to pay the insurance on a personal home may be enough to drive thebusiness into the ground.
In September’s “2025 Realtor.com Housing and Climate Risk Report,” Realtor.com analyst Jiayi Xu observed, “Insurance costs weigh most heavily on lower-value, high-risk markets — particularly in states such as Louisiana and Florida.” Realtor.com ranked New Orleans second in the country for high insurance burdens and first for volume of homes with “severe or extreme flood risk.” The city also ranked 10th on the list of metros most at risk for “severe or extreme winds.”
Disruption Could Lead to a More Creative Market
Although “New Orleans could be the toughest real estate market in the country right now,” as Ken Johnson, the Christie Kirkland Walker Chair of Real Estate at the University of Mississippi, wrote in June of this year, decades of disruption could result in a positive outlook for the market in the year ahead if the city’s innovative spirit comes through. Johnson observed, “The city’s population is down and rents are trading at a premium,” but not everyone in the industry believes this is bad news for The Big Easy.
“Both buyers and sellers in the New Orleans real estate market are highly familiar with disruption,” said Leigh Vila, a NOLA.com reporter writing on behalf of the New Orleans Metropolitan Association of Realtors (NOMAR). She continued, “From hurricane damage to rising insurance rates…amid these obstacles more people are developing creative solutions.”
Danny Douglass, a real estate attorney at Crescent Title, reported he is seeing more first-time homebuyers paying cash for properties or leveraging strategies like “tax-deferred exchanges and installment sales to secure the house or commercial property they want.” Douglass noted, “Sellers are not dictating the terms as much and are more willing to offer concessions.”
He concluded that more sellers are willing to compromise and more buyers are displaying the mental fortitude to hold out for their demands in 2025 because both parties believe that it may be “down the road” before a “more conventional lending program” could offer options to aid the transaction.
With vacant office space currently sitting at an all-time high in the city, investors with creative ideas for using this type of space are also seeing “green” as the market continues to struggle to take off. Naturally, however, some locals are concerned about increased investor activity in the NOLA area. According to local podcaster and CEO of 9i Capital Group Kevin Thompson, the New Orleans market could be ripe for an institutional investor to come into the market and “buy up swaths of homes for long-term leases [while] further depleting inventory for single [individual] homeowners.”
Real estate investors considering operating in the NOLA market will have to consider whether they believe the population they target when they market their properties will choose to remain in the area. If not, then investment strategies should reflect a viable exit plan from the investments as well as acquisition and cash flow. “The ongoing threat of hurricanes, flooding, and extreme heat, all exacerbated by climate change, are leading to higher insurance premiums and other core problems driving people to leave and properties to sit empty,” reported Katie Jane Fernelius for Verite News.
Investors must have clear, actionable ideas about growing or supporting the economy in the area, if they want to remain in New Orleans on a long-term basis.
Sidebar 1
Zillow’s Weakest Home Appreciation Metro Areas // 2026
» Houma, Louisiana
» Lake Charles, Louisiana
» Alexandria, Louisiana
» New Orleans, Louisiana
» Lafayette, Louisiana
» Shreveport, Louisiana
» Beaumont, Texas
» San Francisco, California
» Austin, Texas
» Corpus Christi, Texas
Sidebar 2
NOLA’s Ongoing Battle with Airbnb
Like many cities that rely heavily on money from tourism, New Orleans has a love-hate relationship with short-term rental platform Airbnb. Local policymakers have cited concerns about everything from gentrification to rising housing costs to disruption of neighborhood culture (and peace and quiet) as reasons Airbnb properties should be regulated and permitted. The platform has challenged this position, filing a lawsuit against the city insisting NOLA has no authority to regulate or require permitting for short-term rentals.
In his decision in favor of the city, Jay Zainey, a U.S. District Court judge, dismissed most of the Airbnb lawsuit, stating, “There is no fundamental right to rent out residential property on a short-term basis.” The ruling was backed up in a federal court in September, although Airbnb promised to appeal. The city council, in turn, promised to ramp up efforts to identify unlicensed operators, including fining the bookings giant itself for illegal short-term rentals.
