At Last, Traction For New Orleans' Recovery - 5/21/2007 - Real Estate House Home Condo

At Last, Traction For New Orleans' Recovery

by Broderick Perkins

The May 2007 issue of the "Katrina Index" produced by Greater New Orleans Community Data Center in collaboration with the Brookings Institution offers some of the most optimistic news since it was first published in December 2005 to monitor the social and economic recovery of the Gulf Coast region.

Months earlier, on Monday, August 29, 2005 Hurricane Katrina made landfall on the Gulf Coast, laying waste to New Orleans, nearby communities and many others in surrounding states.

The nation's worst national disaster was compounded by a nearly as disastrous response to rebuilding Crescent City.

The region may be turning a corner.

The report says:

 

• With a potential for a financial shortfall in the billions the"Road Home" program of financial benefits to get hurricane displaced residents back in their homes, revealed an accelerated pace with 8,000 new closings in the past four weeks, up from about half as many during the previous four weeks.

  The target of closing 500 applications a day is well within sight, even though the rate of new applications represents only 11.4 percent of those who will likely eventually apply for benefits.

   

• Population growth is picking up steam too. U.S. Postal Service deliveries in Orleans Parish grew to 61.9 percent of pre-Katrina levels in March 2007. Last August that figure was 49.5 percent. Postal deliveries to residential addresses for the 5-parish region have increased from 76.5 percent to 81.1 percent over that same period.

   

• The average sales price for single-family homes in the New Orleans region continues to climb above pre-Katrina values in the outer parishes while generally remaining stable in the harder hit core. For example, the average sale price of homes in Plaquemines was $253,643 in August 2005. In March this year, the average was $304,271. Meanwhile in St. Bernard, home prices remain mired, falling from $115,741 in 2005 to $61,372 by March this year. However, that number is up from the $11,000 average when the first few homes were sold just months after Katrina hit.

   

• The number of single-family homes sold in the metro area reached 941 in March, reflecting a slow but steady increase this year, up from 742 in January. The inventory of homes for sale is beginning to bulge in all of New Orleans as listings have risen from 8,914 in October 2005 to 14,376 in April this year.

   

• Still, given the shortage of homes for the scores of transient workers, post-Katrina average rents are well above pre-Katrina average rents. One-, two-, and three-bedroom units, renting for $531, $661 and $899 a month, respectively, in 2004, now rent for $836, $978, and $1,256.

   

• Also up are demolitions, in May to 285 per month from 150 per month in recent months. The 1,426 increase in building permits during the past month was the greatest since October 2006.

Obviously, construction is fueling the economy's recovery with tight labor markets yielding higher wages. Construction kept the unemployment rate in the metro area down to 4 percent in March, while the rest of the nation had a 4.4 percent unemployment rate.

Nonfarm employment reached 500,800 in March -- more than 80 percent of pre-Katrina nonfarm employment, according to the latest Katrina Index.