Should the future property market drown together with devastated houses?
This week, New Orleans was spared from a devastating rampage of Hurricane Gustav when it only delivered a slight blow amidst worse effects of its brute force. Gustav was downgraded to Category 2 after forecasters alarmed residents that the hurricane would ravage the Gulf Coast at Category 4. The Texas oil rigs were also saved from the expected devastation that had traders fearing for oil price hikes after it wreaks the moored offshore rigs and platforms of oil companies. This however did not deter residents to take heed of emergency warnings that called for relocation to safer areas.
Everyone has learned a lesson this time.
While the effects of hurricanes Katrina and Rita are still evident, it seems that New Orleans has yet to be resuscitated from the tragedy that it has put up with. The half-finished levees built to withstand the harshest of waves after the calamity in 2005 proved their worth during Gustav’s torment though. Even the water pumps that provided continuous drinking supply resisted being knocked down. But could New Orleans’ property market plunge on the other hand?
In a city where you rarely find other housing types but single family units and apartments, New Orleans is composed mostly of low profile, downscaled residents. In 2004, the American Housing Survey for New Orleans reported that the median value of occupied housing units stands at $122,726. Two years earlier, Wade Wagas of the University of New Orleans Lusk Center for Real Estate concluded in his study that despite improvements in its economy, there is still a critical shortage of affordable housing units to low-income residents.
This year however, Larry G. Schedler and Associates, a New Orleans-based real estate firm, reported that apartment rents have spiked to as high as 27 percent after two and a half years since Katrina’s relentless impact. More apartments will also be completed next year to cater to different market categories.
Since residents have no control over torrential weather, there is no other choice but to observe strict preparations much like the contingency plans after Hurricane Gustav. In heavily affected areas such as the Lower Ninth Ward, rebuilding the housing units has to come about with effective area planning and development to salvage a losing market.