Editor’s note: This is the first part of a two-part series examining the real estate market in the New Orleans area, four years after it was ravaged by Hurricane Katrina. Read the second part: "The new New Orleans."
By SERGIO MOSQUEDA
In New Orleans, you don’t need a calendar to remember Hurricane Katrina — four years later, its deep scars are still very visible in the area’s real estate landscape.
Saturday, Aug. 29, 2009, marks the fourth anniversary for the Louisiana landfall of one of the most devastating hurricanes in U.S. history.
Hurricane Katrina killed an estimated 1,836 people in the Gulf Coast region, destroying or damaging hundreds of thousands of homes and displacing an estimated 750,000 households.
Today, New Orleans proper is a motley collection of homes, with stretches of high-end homes standing next to gap-tooth subdivisions in a city that has yet to repair one-quarter of its Katrina-damaged housing stock.
The New Orleans Index, a research project begun by the Brookings Institution Metropolitan Policy Program in December 2005 and now a collaborative effort with the Greater New Orleans Community Data Center, reports that the "New Orleans economy is weathering the recession relatively well due in part to its industry composition."
Even so, the latest report, released this month, found that "the housing market has stalled, with home sales down 39 percent and new construction down 48 percent." The report also found that the number of homes sold in the New Orleans metro area fell 23 percent from May 2008 to May 2009, with 686 home sales for the month.
And the pace of home reconstruction and new construction has slowed: the monthly average number of residential permits issued in the city of New Orleans was 420 from the months of September 2008 to May 2009, compared with the 676 monthly average during the September 2007 through August 2008 period and the 912 monthly average for the prior year.
Blight also remains a big problem, with 53 percent of residences in St. Bernard Parish and 31 percent of residences in Orleans Parish sitting unoccupied as of March 2009.
"New Orleans has 65,888 unoccupied residential addresses — nearly as many as Detroit," the report also states. And "many essential service workers in the New Orleans area cannot afford the fair market rents of an apartment in the region."
The population of residences receiving mail within the city of New Orleans has reached 76.4 percent of its pre-Katrina level as of the August 2009 report, up 4.3 percentage points from August 2008.
Those who stay, returned, or made it a new home continue to shift the real estate market’s topography and demography. Some buyers are choosing high, dry areas and populating the formerly rural area north of New Orleans.
St. Tammany, across Lake Pontchartrain and north of New Orleans, has more than doubled in population from Pre-Katrina levels, said the chief of staff of a New Orleans development hub. Areas once priced out from some buyers are now affordable.
Some young professionals are moving into those regions that were disproportionally hard-hit by Katrina.
Keller Williams Realty Westbank real estate agent Lisa Heindel said she thought after Katrina, "Oh — my god — I’m not going to have a job. But right after, my phone started ringing for close to a year." What’s happened since this initial Katrina real estate boom?
The city had a 7.3 percent unemployment rate in June — which is less severe than some other states are experiencing given the state of the economy — so consumers do buy homes but buy less home, said real estate professionals.
They say buyers are shying away from homes priced above $100 a square foot and choose homes below $200,000.
The high-end market is slipping, said Susan Daigle, an agent with Coldwell Banker TEC Realtors. "There are not as many high-end jobs in this economy (to support) high-end sales." …CONTINUED