A Year after the Storm: A Look at the Local Real Estate Business

Realtors worked 10-to-12-hour days to keep up with calls from people seeking homes after being displaced by the hurricane
Realtors worked 10-to-12-hour days to keep up with calls from people seeking homes after being displaced by the hurricane

RISMEDIA, September 5, 2006-Realtors in the Gulf Coast region have seen the best and worst of times in the year since Hurricane Katrina devastated the Gulf Coast, causing billions of dollars in damage and destroying more than 200,000 homes along the Mississippi, Louisiana and Alabama coasts.

Real estate practitioners who work in some of the most heavily damaged neighborhoods struggled in the aftermath of Katrina, not selling a single home in the first few months after the storm. In contrast, regions close to the affected areas saw an immediate boost in sales activity.

“Realtors play an important role in rebuilding our communities,” said Thomas M. Stevens, NAR president and senior vice president of NRT Inc. from Vienna, Virginia. “Some Realtors had a difficult task post-Katrina; however, they rose above and beyond the sales arena by providing residents with relief and assistance in finding housing, even when many lost their own homes.”

Prior to Katrina, the housing market in New Orleans was healthy; sales were in near record-level territory and home prices were rising at a rate of 10% a year. In the wake of one of the worst storms to ever hit the country, sales in New Orleans plunged, falling nearly 85% in September 2005.

Realtor Brooke Arthurs, an agent with Latter & Blum in New Orleans, questioned whether her real estate practice would weather the storm.

“From September to November almost nothing was happening saleswise in the city,? said Arthurs. Fortunately, as the rebuilding effort got further along, sales began to pick up.

From January to June 2006, Arthurs did a year’s worth of business in six months. “People who were displaced by the flooding quickly moved to buy homes in dry areas, younger buyers and students took advantage of reduced prices on gutted homes in the flooded neighborhoods, while a few looked to leave the area or scale down.”

While home sales in New Orleans initially lagged, nearby regions received an immediate boost in sales activity as displaced residents competed for a limited supply of homes.

“September through November 2005 saw a buying frenzy in the outer areas of New Orleans,” said Realtor Re Re Avegno, an agent with RE/MAX Real Estate Partners in Metairie, Louisiana, next door to New Orleans.

Realtors weren’t just busy helping individuals find housing during those first few weeks and months; they were also busy providing relief in other ways as well.

“Post-Katrina, real estate was an emotional roller-coaster,? said Avegno. Realtors became counselors, therapists, friends, sounding boards, and chauffeurs as buyers tried to replace not only their homes but also their possessions, neighborhoods and lifestyles.”

Realtor Don Buisson of Ashman-Mollere Realty in Waveland, Mississippi, another hard hit area along the Gulf Coast, also saw a rise in sales activity when he returned to the area after evacuating to Alabama.

“So many homes and rental properties were gone, completely wiped out,? said Buisson. Prices of those homes that weren’t destroyed immediately went up 25 percent.”

Property values have continued to increase since last year. Rebuilding is a slow process but it’s happening. Buisson doesn’t believe residents will abandon the region despite the threat of future hurricanes and thinks that beachfront property will be as hot as ever.

“It’s a beautiful area and people love living here. We’ve had volunteers come here with clean-up crews and enjoy the area so much they decide to buy,” said Buisson.

Today, the rebuilding effort is having a major impact throughout the region. Sales in New Orleans are up 9% compared to a year ago and home prices are 16% higher. The surrounding areas continue to perform well and are generally staying ahead of the nation in terms of sales and prices. In nearby Baton Rouge, sales are up 4% from a year ago and home prices are up 23%.

“Nearly everybody who plans to live in the area has purchased a new home or is fixing their damaged home,? said Avegno. Some are still renting and waiting to see what happens this hurricane season.”

“New Orleans is going to be great in the end,” said Arthurs.

Buisson agrees: “Everything is going to turn out all right; the Gulf Coast is going to come back quickly and we are going to have a brand new, nice community again.”

Information about NAR is available at www.REALTOR.org.