The desire to own a home of one's own is part of the American dream. But owning a home is not always synonymous with owning a single family dwelling. Rising real estate prices, changing lifestyles and these days, even hurricanes, have led multiple segments of the buying market to condominium living. For many people, purchasing a condominium is a way to enjoy the benefits of home ownership without the headaches.
Determining whether a condo is right for you requires that you first understand what a condo is. When you buy a condominium, you own the space contained within your particular living unit and share ownership of the building's land and common spaces such as lobbies, hallways, courtyards, pools and fitness areas. Condo owners pay a monthly fee that goes toward maintenance and repair of the common areas, and all owners in a building form an association, which handles maintenance and repair issues, enforces rules and regulations and deals with disputes between unit owners.
In recent years, New Orleans has been a hotbed of activity for developers looking to cash in on the national trend toward condominium living in urban centers as well as the popularity of New Orleans as a tourist destination and, therefore, a second-home market. As young, on-the-go professionals, empty-nest baby boomers interested in downsizing and part-time residents from other cities embraced the maintenance-free lifestyle, numerous condo projects were slated for construction in the downtown area. Since Katrina, however, uncertainty and increased cautiousness among buyers has resulted in a softening of the market and plans for some of the proposed buildings have been deferred or cancelled.
Realtor Shaun Talbot of Talbot Realty Group credits the adjustment to the fact that the supply of condos -- both at the national and local levels -- currently exceeds the demand for them, and to post-Katrina competition for condos in select areas.
"Prices spiked after the storm in areas that did not have water," says Talbot. "But they spiked too high and excluded a lot of potential buyers, so you are going to see a correction take place." Still, some new buildings -- including a much-publicized high-rise under development by real estate mogul Donald Trump -- are going forward, and realtors say the market remains strong, particularly among buyers in the $300,000 range.
"I'm bullish on condos for the long term," says Talbot. "The lifestyle is right for a lot of people today. It's easier to maintain a condo than a house."
In the Warehouse District, where there is a high concentration of condos, realtor Mi Mi Montagnet, also with Talbot Realty, says young professionals who travel frequently and don't want the upkeep of a house and yard, and students in professional schools such as law and medical schools make up the largest part of the market, with couples who are downsizing, second-home buyers from surrounding states and investors rounding out the picture. In addition to minimal maintenance, condos offer affordability to first-time buyers and singles who may not be able to afford single-family houses. As condo owners, those same buyers can build equity while enjoying built-in luxuries like swimming pools and exercise facilities, along with built-in advantages like sociability and security, which are part of community living.
"You interact with your neighbors and get to know them more in buildings with common areas," says Montagnet, who lives in the Cotton Mill, which has a 25,000-square-foot courtyard. "The common areas become social arenas that foster friendships."
There are other perks as well. It's easier to obtain insurance for a condo than a house, and many are centrally located near restaurants, retailers and cultural attractions. Some even have retail space and restaurants located on the ground floor of the building.
Among the types of condo developments available, or soon to be available, to local buyers are: adapted-use buildings -- warehouses, industrial buildings and even former department stores turned into condominiums; conversions -- rental units turned into condominiums; and new constructions.
Adapted-use buildings, such as the Cotton Mill and Lengsfield Lofts, both in the Warehouse District, carry the cachet of historical significance and the kinds of original architectural details -- exposed brick walls, expansive windows and high ceilings -- typically associated with urban loft living. Combined with the character of the old are new surfaces, appliances, fixtures and conveniences. Many are located in downtown areas, a factor that appeals to the young, metropolitan demographic of the majority of buyers. Tax incentives made available to developers of some historic properties (in exchange for preserving the historic integrity of the structure) can mean a sizeable savings for buyers, especially in areas where property taxes are high.
Conversions, like adapted-use buildings, often have the charm and distinction of age. Some are an immediate, move-in-ready choice for buyers who don't want to wait while units are being renovated or newly built. Apartment renters who already occupy units being converted to condos may even receive discounted purchase prices.
New constructions usually have state-of-the-art security and technology features and are built with durable materials like steel and concrete. But high construction costs due to a variety of factors, including a nationwide building boom, a shortage of labor and new post-Katrina building codes, mean they also are likely to have higher prices per square foot. Because buyers of new constructions may have to wait several years before the building is ready for occupancy, they are a good match for purchasers planning an eventual lifestyle change and for investors interested in selling a condo once its value has appreciated. For those buyers who do plan to live in the unit, ReMax realtor Isabel Reynolds, who's sold condos Uptown, downtown and in Metairie, says the benefits of pre-sold condos balance out the lag time. More than half of the 22 units in Faubourg St. Charles, a combination conversion and new construction underway at the corner of St. Charles Avenue and Julia Street, have been pre-sold, enabling buyers to customize their units. "[Faubourg St. Charles] is a luxury building, but it's a very flexible building," says Reynolds. "You can choose your size; you can put together spaces to make two, three or four bedrooms."
Originally, T.J. Iarocci and Rob Tatum, two of three partners behind the Tracage, a luxury, 24-story condo tower scheduled to break ground in the Warehouse District at the end of this year, say they targeted the second-home market. But since Katrina, they say they've seen a shift in the buying market -- 60 to 70 percent of the pre-sold units have gone to full-time residents -- and that the selling points of new structures far outweigh those of older buildings, making them the wave of the future. While Tracage units will have the sleek Soho look that originated with adapted-use buildings, the structure also will have controlled access, 24-hour concierge security, wireless technology, an infinity-edge swimming pool overlooking the city, a parking lot, automated lighting and appliance systems, 6,000 square feet of ground-floor retail space and an energy-efficient Leadership in Energy and Design-certified "green" rating.
With options ranging from renovated landmarks to brand-new, high-end high rises, buyers can shop for a condo that meets their specific needs and tastes. Two years ago, Millie Corrigan, a personal shopper with Saks Fifth Avenue, was in the market for a pet-friendly condo with full-time security, affordable maintenance fees and nearby parking. She found all of those things and more at the Cotton Mill. The "more" includes architecture with an industrial feel, a gym she uses regularly, a pool she uses in the summer and social connections.
"One of the most appealing things about this building is the 15-foot ceilings and the 10-foot windows," says Corrigan. "I walked into my condo, took one look, and I said, 'This is it.' I've also met so many great people," she adds. "It's like a family here." Corrigan's 537-square-foot one-bedroom condo has proved to be a smart financial move as well. It recently appraised for 80 percent more than she paid.
For Jordan Monsour, an attorney, who represents a number of local condominium developers and resides in the Lengsfield Lofts building, investment value was a main incentive in becoming a condo owner. Like many young professionals who purchase for an average of three to five years, Monsour knew that his housing needs might change in the not-so-distant future and was interested in a property with good resale potential.
"Everyone is concerned that the real estate condo bubble might burst and that what's driving the price up is that people are buying them on speculation with the intent of flipping them," says Monsour. "But so far, the bubble hasn't burst. I think if I decided to sell, I would make a profit."
While national trends and post-Katrina changes have affected what the local condo market will bear, developers and realtors agree that today, more than ever, there is something for everyone and that the carefree lifestyle inherent in condominums will continue to make them a popular choice in the years to come. "The market is ever-changing in New Orleans, so it's hard to put an exact forecast on the future," says Tracage's Tatum. "We're still optimistic and we're going forward."