Editor’s note: This is the second 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 first part: "New Orleans: 4 years after Katrina."
By SERGIO MOSQUEDA
Sonya Becknel drew a flood zone map the size of her desk before buying a home in Chalmette in St. Bernard Parish, southeast of New Orleans.
St. Bernard was one of the hardest-hit areas of New Orleans after Katrina struck four years ago. The parish is rebounding, even though some returning residents did not receive restitution for their flooded homes after the storm.
"You can see the true grit of the people," said Cliff Reuther, Becknel’s agent and Prudential Gardner broker and manager.
Teens who evacuated the area with their families come back and make it their home — Reuther said he has seen buyers in their 20s come with friends to St. Bernard to buy and renovate homes.
"We knew where we were buying," said Becknel. Four years ago, St. Bernard Parish was under 15 feet of water, and she reminded herself that Katrina flooded homes outside of the officially designated flood zones.
Seeking to avoid $1,500 to $3,000 in flood insurance premiums, she and Reuther developed a flood zone insurance-coding system: "A" for expensive, "B" for affordable, "C" for flood danger.
Becknel was careful when considering homes, since flood-zone maps change frequently and could become outdated in months. "It helps that I grew up here," she said.
She stayed within the "B" range of her coding system and found her home on a dead-end side street in a neighborhood devoid of street signs — she had to ask people on the street to direct her to the home. Now, she said, those same people "invite us for drinking tea and boiling crawfish," but the neighborhood had at first seemed "desolate — kind of scary."
There are still some empty slabs waiting for a new home, while some flood-damaged homes still await demolition. Becknel arrived to a renovated brick home that overlooks three empty lots, and now her next-door neighbor is renovating his home.
Post-Katrina renovations were notoriously shoddy. Investors came early after the storm and reconstructed homes, although many did not recoup their investments due to a shortage of jobs and lack of buyers immediately after Katrina, said Reuther.
For a time, remodelers rebuilt homes with the same materials bought from the only home improvement store left in the area after Katrina. Becknel said she became a perceptive buyer because, after looking at many homes, she noticed some sloppy installation.
"You would walk into places and notice something right away," said Becknel. If the installation of standard material was poor outside, she would ask herself, "What’s behind the walls?"
"Why in the world would you buy a home with a great kitchen for $150,000 if it had warped countertops when you could find a home completely rehabbed for $114,000?" Becknel said.
Becknel added that she thinks more people will return to Chalmette once it can offer more jobs.
St. Bernard averages about 30 home sales per month, and home prices for the average 1,600-square-foot home fell from $150,000 to about $80,000-$110,000 after Katrina, said Reuther. Nowadays, homes in the area can sell for up to $300,000. …CONTINUED
While Becknel and her partner are beginning their life in Chalmette, Loren Wakefield always knew she would leave New Orleans.
She and her husband have relocated, leaving behind a home they rehabbed in the Lakefront area of Orleans Parish.
"That was their mission," said Lee Pennebaker, Wakefield’s listing agent and Coldwell Banker TEC Realtor. "It takes a special person to go in and rehabilitate these properties."
The Wakefields bought the home in May 2007 and listed the home in May 2009. New Orleans real estate is a "peculiar market," said Wakefield. Some homes need rehabbing in their neighborhood, and the neighborhood has a wide range of pricing: from $350,000 to $1.5 million.
Pennebaker said many buyers previously priced out of the area can now afford to live in the Lakeshore area. Some buyers want an area that has never flooded, while for others "that’s exactly what they want," he said.
Just south of the Lakefront area — in the Lakeview and Lakewoods communities — the real estate market is still slow, said Anne Comarda, a Realtor for Prudential Gardner. The areas appeared devoid of life — even birds and squirrels — for a long time after Katrina, Comarda said, while now there are children riding bicycles in the streets.
Someone who moved here from out of town would see only empty lots, said Comarda, but even having empty lots is progress — "you don’t have empty homes falling (in price)."
Even so, GiGi Gaubert Burk, co-owner of Burk Brokerage, advises buyers who move to the area that they should be physically fit to evacuate if another hurricane threatens the Lakefront. She does not see many elderly buyers for this reason, but she does see many young professional buyers moving to the Lakefront area.
And flooded areas and gap-toothed subdivisions make it difficult to find meaningful comparable properties for appraisal purposes.
One agent said sellers once had an inflated opinion of the pre-Katrina market. Now they say, "Get it sold." Sellers recognize the market is down and financing is tough. Some may even be inclined to give their home to a listing agent and have them sell it at any price.
Sellers could factor in the cost of rehabbing for buyers who are choosing between a flooded or a remodeled home, though rehabbing can put a house price "on the high side," Wakefield said.
When Wakefield scouted her home in New Orleans "there was a lot of devastation, but every day we would see the progress," she said. Now "it’s painful to leave."
New Orleans, said Wakefield, was "an interesting journey we’ll never forget."
Sergio Mosqueda is a freelance writer who lives in Mississippi.
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