This week, the news came out that Starbucks projects a more than 90% drop in 4th quarter 2008 earnings. As changes in the economy are forcing some consumers to tighten their budgets, high priced coffee is no longer selling at the rapid pace that it once was. At the same time, McDonald’s posted an increase in third quarter 2008 earnings, with much of the continued growth attributed to the value levels of its menu.
As the economy tightens, how long will consumers continue to justify paying $4 for a cup of coffee when they can get an entire breakfast, coffee included, right down the block?
I don’t think that it’s a stretch to apply this same question to the current West Bank real estate market as many sellers cling to their higher listing prices while loudly and proudly proclaiming “I’m not giving my house away”.
Sellers need to review the current market and their pricing and ask themselves: How many buyers are dismissing you as the Starbucks of the neighborhood and driving down the street to order from the value menu at McDonald’s?
| Area | 2007 Average Sale Price | 2008 Average Sale Price | Change (+/-) | October 2008 Average Listing Price |
| Algiers 70131 | $178,124 | $154,649 | -13.18% | $190,862 |
| Algiers 70114 | $160,479 | $124,523 | -22.41% | $173,401 |
| Algiers Point | $265,060 | $219,343 | -17.25% | $266,408 |
| English Turn | $595,342 | $506,829 | -14.87% | $669,736 |
| City of Gretna | $145,018 | $143,246 | -1.22% | $158,337 |
| Terrytown | $186,981 | $172,380 | -7.81% | $226,697 |
| Belle Chasse | $295,894 | $262,802 | -11.18% | $386,993 |
| Harvey | $170,015 | $156,469 | -7.97% | $190,561 |
| Marrero | $166,684 | $156,244 | -6.26% | $173,769 |
| Westwego | $117,190 | $108,667 | -7.27% | $133,811 |
Information from GSREIN and is deemed reliable, but not guaranteed.
Take a close look at the 2008 and 2007 year to date average sale prices on the West Bank. There is not a single community that hasn’t been affected by falling real estate values. Obviously, some areas have been affected more than others, but the general trend is for lower sales prices.
Now look at the average listing prices in the same areas.
It seems to me that there is a large supply of $4 lattes on the market. That’s too bad, because I’m taking my qualified buyers to McDonald’s.
Buying or selling on the West Bank of New Orleans? Contact Lisa Heindel. It would be my pleasure to assist you with all of your real estate needs.
Copyright 2008. Lisa Heindel and West Bank Living. All rights reserved.
