DID NEW ORLEANS EAST RECOVER FROM KATRINA? © 2012 by Wayne D. Lewis, Sr. (Part 1 of 2)
In a previous blog (http://makeyourbestoffer.blogspot.com/2012/10/do-disaster-impacted-homes-recover_4.html),
I discussed several areas within the New
Orleans area that had been impacted by Hurricane
Katrina. Those areas were Gentilly (Area 76), Mid-City (Area 68) and Lakeview
(Area 69).
In this latest blog, I thought I would look further into
Katrina’s possible impact and how it may have affected another area in New Orleans : New Orleans East. New Orleans East is one of the largest land
masses in the City of New Orleans ,
and is characterized by many components.
For the sake of this review, I have focused on New Orleans East as
delineated by the areas assigned by the New Orleans Metropolitan Association of
Realtors.[1] Those Areas are (73, 74, 75, 77, 78, 79,
& 85). See Map below.
As we stipulated in our earlier blog, Hurricane Katrina and
its aftermath may have caused direct or indirect damage as a result of what
happened between August 28 and August 31, 2005.
From wind damage to flooding, there is no absolute determination that
will be made here as to which caused damage, directly or indirectly to the
homes of this area. In a number of
cases, many homes were in no greater damage than the day before the storm. Many homes did not flood, or receive any
significant wind damage.
Even as buyers may have noticed that many homes were not damaged,
it still may have not mattered to potential homebuyers whether the home flooded
as much as how much was flood insurance affected by the waters that breached,
overtopped, or destroyed the levees. The
inevitable conclusion is still the same in the real estate industry when it
comes to selling homes: What are the
properties selling for in terms of $ per square foot, AFTER the storm?
We are not discounting any work done in terms of
renovations, or how well homes survived the storm, but when it came to
appraisals, which is another story, homes that were on the market immediately
after Hurricane Katrina had to be compared to homes much farther away than just
in their immediate subdivision, or even the New Orleans East area. Banks were slow to make loans on properties
devastated by the floods, or the areas that were near to where homes were
flooded.
The question here is, how have homes in New Orleans East
recovered from the aftermath of Hurricane Katrina? Below are several tables. On the surface, the tables reflect 3 time
periods: the first half of the years
2005 (preceding Katrina), 2008 and 2012.
From the these tablea we will see how many homes sold in the areas
associated with New Orleans East (Areas 73, 74, 75, 77, 78, 79, and 85). We will see the $per sq. ft. sold in these
areas, the average sq. ft. of the homes sold, and how many Days on the Market
(DOM) the average set of homes stayed on the market.
What you will not see however, but I will reveal at this
time is that the homes used for this study were single detached homes, in Excellent
or Very Good condition, 3 bedrooms and 2 baths.
For the purpose of this
unofficial research here is how Excellent
and Very Good are defined from the New Orleans Metropolitan
Association of Realtors,
·
Excellent condition -No functional inadequacies of any
consequence and all major components in like-new condition. The overall
effective age has been substantially reduced upon complete revitalization of
the structure regardless of the actual chronological age.
Very Good -condition is considered as No obvious maintenance required but neither is everything new. Appearance and utility are above the standard, and the overall effective age will be lower than the typical property.[2]
· Gentilly
Woods (area 73)
· New
Orleans East (Areas 74, 75, 77, 78, 79 & 85) See map
Immediate Criteria: 1st half of year increments-
·
Jan 1, 2005-June 30, 2005;
·
Jan 1, 2008-June 30, 2008 and
·
Jan 1, 2012-June 30, 2012;
·
# of properties sold;
·
average sq ft of living area of properties;
·
$ per sq ft of properties sold and,
·
how many Days on Market (DOM) before being sold
Below
are 3 tables separated by their years for New Orleans East. Here is what we know, based on these tables:
Total # Of Properties Sold: For 2005 (See table 1), 199 properties were
sold for the first half of the year ending June 30, 2005 with an average of 28 properties per area referenced in New Orleans
East (73, 74, 75,76,77,78,79 or 85). For 2008 (See table 2), 115 properties for
the first half of the year ending 2008 were sold, with an average of 16
properties per area referenced in New Orleans East (73, 74, 75,76,77,78,79 or
85). For 2012 (See table 3), 82
properties were sold for the first half of the year ending June 30, 2012, with
an average of 12 properties per area referenced in New Orleans East (73, 74,
75,76,77,78,79 or 85).
What we may observe from this
snapshot of information, is that from 2005, 2008 and 2012 revealed a gradual
decrease in sales of 3 bedroom 2 bath homes in the New Orleans East area. Of the total of 396 homes of the three years
referenced, the first half of 2005 sales accounted for only 50% of those
sales. 2008 only accounted for 29% of
those sales, with the remainder of 2012 only accounting for 21%. Most notably,
the two years’ sales activity referenced here, 197, post Katrina, accounted for
50% total number of properties sold.
Table 1. January-June 2005
Y2005
|
||||
Area
|
#of
Prpts
|
$PerSqFt
|
Aver
Sq Ft
|
DOM
|
73
|
13
|
$
93.87
|
1127
|
61
|
74
|
51
|
$
79.05
|
1716
|
50
|
75
|
7
|
$
77.87
|
1196
|
75
|
77
|
26
|
$
81.43
|
1777
|
62
|
78
|
44
|
$
78.57
|
1527
|
72
|
79
|
36
|
$
85.54
|
2423
|
56
|
85
|
22
|
$
79.73
|
1628
|
102
|
Totals
|
199
|
$
576.06
|
11394
|
478
|
Avg
|
28
|
$
82.29
|
1628
|
68
|
The Total Days on the Market
(DOM) reflected here for the first half of the years 2005, 2008 and 2012 comes
to 1779, revealed an interesting increase in the days on the market in the New
Orleans East area. Of the total DOM of the
three years referenced, the first half of 2005 accounted for only 27% of the
days properties sat on the market.
2008 accounted for 27% of those
days that properties sat on the market, with the remainder of 2012 only
accounting for 46% of those properties remaining for a longer period on the
market at average of 164 days compared to 2005 at 68 days.
Total Average Square Footage: For
2005 (See table 1), the total average square footage for the first half of the
year ending June 30, 2005 was 11394 sq ft, with an average of 1628 sq ft. per
area referenced in New Orleans East (73, 74, 75,76,77,78,79 or 85). For 2008 (See table 2), the total average
square footage for the first half of the year ending June 30, 2008 was 12006 sq
ft, with an average of 1715 sq ft. per area referenced in New Orleans East (73,
74, 75,76,77,78,79 or 85). For 2012
(See table 3), the total average square footage for the first half of the year
ending June 30, 2012 was 10069 sq ft, with an average of 2014 sq ft. per area
referenced in New Orleans East (73, 74, 75,76,77,78,79 or 85).
Table 2. January- June 2008
Y2008
|
||||
Area
|
#of
Prpts
|
$PerSqFt
|
Aver
Sq Ft
|
DOM
|
73
|
11
|
$ 94.15
|
1314
|
51
|
74
|
34
|
$ 85.55
|
1710
|
63
|
75
|
4
|
$ 84.98
|
1615
|
81
|
77
|
19
|
$ 88.86
|
1883
|
83
|
78
|
21
|
$ 85.88
|
1675
|
65
|
79
|
18
|
$ 85.46
|
1977
|
72
|
85
|
8
|
$ 85.67
|
1832
|
68
|
Totals
|
115
|
$ 610.55
|
12006
|
483
|
Avg
|
16
|
$ 87.22
|
1715
|
69
|
Table 3. Jan-June
2012
Y2012
|
||||
Area
|
#of
Prpts
|
$PerSqFt
|
Aver
Sq Ft
|
DOM
|
73
|
0
|
$
-
|
0
|
0
|
74
|
22
|
$
71.67
|
1753
|
173
|
75
|
0
|
$
-
|
0
|
0
|
77
|
13
|
$
67.86
|
2126
|
143
|
78
|
12
|
$
72.78
|
1788
|
109
|
79
|
26
|
$
76.60
|
2626
|
213
|
85
|
9
|
$
80.47
|
1776
|
180
|
Totals
|
82
|
$
369.38
|
10069
|
818
|
Average
|
12
|
$
73.88
|
2014
|
164
|
($) Per Square Foot reflected here for the first half of the
years 2005, 2008 and 2012 came to a total of $243.39 $per sq. ft. There was a peak in 2008, only to see a
decline by 2012 in the average $ per square ft. reflected in the sales in the
New Orleans East area. Of the total $
per sq ft on properties sold in the three years referenced, the first half of
2005 indicated that homes averaged totally $82.29 a square foot, or 34% of the
overall total. 2008’s average $ per sq
ft. 87.22 accounted for 36% of those
properties on the market sold, an
increase of $4.93 or 2 points. And finally, by 2012, the average $ per sq. ft
was 73.88, a reduction of $8.41 pre-Katrina, and accounting for 30% of the total of the three years referenced for
New Orleans East.
Metro New Orleans
MLS Map:
NOMAR Map
Conclusively, the New Orleans
East area has had its share of struggles over the past 7 years since Hurricane
Katrina. While this study used Hurricane
Katrina as a measuring stick in terms of time reference, and the fact that many
of the properties in the affected areas were likely impacted by the storm, it
should not be concluded that the storm actually damaged the properties included
in this study. But it is safe to say,
that the homes that are used in this study were likely to have been impacted by
virtue of flooding, wind damage, or any other hurricane related activity that
was in proximity to these subject locations.
This has been an opinion of factors related to
Hurricane Katrina and real estate sales in the New Orleans area. Your results may vary. Opinions are only of this blogger and is not
affiliated with or the opinions of Gardner
Realtors. You are advised to consult
with your Realtor or Appraiser for more up-to-date information.
Labels: East New Orleans, Lake Pontchartrain, New Orleans East
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