New Orleans R.E. Market Still Stagnant
It was widely speculated in the immediate aftermath of Hurricane Katrina that a real estate boom would follow the unprecedented storm in and around the Gulf Coast. As time passes, however, the only things increasing in New Orleans’ real estate market are new listings.
For most real estate agents, sales are nowhere to be found.
Many analysts predicted that with a smaller amount of structurally sound homes available in New Orleans, demand would increase 20 to 30 percent by default. Yet Mary Ann Casey, the proprietor of a Re/Max agency in the city for a quarter century, has seen no such thing. “If anyone can show me data supporting that, I’ll be very surprised,” she said, speculating that any such growth would take place a long time from now, if at all.
The supply may be there, but the demand is not. Portions of New Orleans have been reopened since the storm, but over 100,000 former residents remain displaced. Moreover, the fears of another disaster linger, and will likely discourage potential buyers for years. Understandably, the hurricanes that followed Katrina - Rita and most recently Wilma - have created a negative psychological aversion to the entire Southeast.
“The key to property value in New Orleans is in the hands of the U.S. Congress,” said Arthur Sterbcow, president of Latter & Blum, a real estate company with offices in Louisiana and Mississippi. Sterbcow added that until the government funds levees that can withstand the force of a Category 5 storm, questions will linger. Those who escaped flooding “can only claim luck” and could just as easily be hit hard the next time, he said.
In addition to a stagnant market, real estate professionals face myriad logistical headaches. Many agents lost their homes themselves, or had records and materials damaged by flooding. The New Orleans city mortgage and conveyance departments were also flooded, leaving a number of pending sales up in the air. While the important documents were shipped North to be restored and are now being sorted out, it’s a frustrating and time-consuming process for those in the industry.
It will be interesting to see how the Florida real estate market responds to the damage wrought by the storms of this record-setting hurricane season - most notably Wilma, which left more than 6 million homes and businesses without power two weeks ago. How long it takes things to return to normal remains to be seen. Combined with the increase in Florida mortgage rates, the storm-weary market could be in for a period of slowed growth.
