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:) HOUSTON CHRONICLE
May 8, 2006, 11:58AM
New Orleans Real Estate Market Booming


By RUKMINI CALLIMACHI Associated Press Writer
© 2006 The Associated Press

NEW ORLEANS — The 2,200-square-foot house promises three spacious bedrooms and two-and-a-half baths _ a bargain at $175,000. Except for the fact that the home, located in one of this city's previously elegant neighborhoods, has been gutted to the studs and has no drywall, no wallboard, no fixtures.

"Home was flooded by Katrina," reads the advertisement posted by the listing agent at one of the city's largest real estate firms. "Ready to turn into your dream home."

The pitch is less far-fetched than it may seem: Although vast swaths of this hurricane-battered city are still without electricity and basic services, residential real estate sales are at a fever pitch, a shining spot in an otherwise struggling economy.

For the first quarter of the year, sales of single-family homes in the greater New Orleans area zoomed to $826 million, a jump of 60 percent over the first quarter of 2005, when sales totaled $517 million, according to New Orleans Metropolitan Association of Realtors; 3,829 residential units were sold, 960 more than the same period in 2005.

Experts say there's nothing to be surprised about: One of the ironies of natural disasters is they're often good for real estate. It's a pattern real estate professionals witnessed in Florida after Hurricane Andrew and in Los Angeles in the aftermath of the Northridge earthquake.

"To use a terrible analogy, it's like watching 'Gone with the Wind' for the fifth time," said Arthur Sterbcow, president of Latter & Blum Inc., the 90-year-old real estate firm based in New Orleans. "It's completely predictable. The market reacts the same way each time. It's like watching a football game and having the play book in your hands."

Last year's play unfolded like this: As Hurricane Katrina bore down in late August, thousands fled.

Trying to stay close to home, many ended up putting down temporary roots in satellite communities like Baton Rouge, where evacuees pushed up residential sales 48 percent to $1.2 billion in 2005, compared to $788 million in 2004, according to the Greater Baton Rouge Association of Realtors.

But the pull of home is strong, and many evacuees have since returned to their flooded city.

Some were lucky enough to find their homes intact, needing only minor repairs. At the other end of the spectrum were people like Jim Peckenpaugh, 60, whose home in the upper-middle-class Lakeview neighborhood took on 9 feet of water.

He initially tried to find a dry house, but those in Lakeview were selling for more than $400,000, pricing him out of his own neighborhood. Instead, he found a bargain: a three-bedroom, also in Lakeview, selling for $250,000. That's because it swallowed only 3 inches of water.

It wasn't his first choice _ the first flooded house he tried to buy was snatched up by a more aggressive buyer. "At night, as I was driving around looking at houses, I would see people with flashlights doing the same thing," he said.

Most returning homeowners bought dry properties in the unharmed periphery of the city.

As those homes became scarce, more intrepid homeowners, as well as investors, began working their way toward the core of the city, say real estate agents and developers. National homebuilder KB Home has acquired 58 finished lots in New Orleans, as well as a 3,000-acre parcel in Jefferson Parish, a neighboring suburb.

"You hate to say it, but these disasters tend to spark an energy that people have to respond to," said Thomas Stevens, president of the Washington, D.C.-based National Association of Realtors. "Immediately after, what you see is this sense of, 'Oh my God, it's a disaster. What do we do?' And then people's lives get back to normal and they say, 'OK, I have a home. Do I repair it? Or do I sell it and buy another?'"

To be sure, the real estate picture is far from even: Areas like St. Bernard Parish, which took the brunt of last summer's storm, are lying fallow. Not a single house sold in the first three months after the storm; only one sold in the fourth month, fetching just $11,000 in an area where the average home once sold for $109,000, the New Orleans Realtors Association said.

The most heavily damaged neighborhoods are still in limbo: In order to get insurance, some homes will have to be raised as much as 3 feet, an expensive proposition. Rather than going through the expense and hassle of having their homes raised, many homeowners are choosing to buy in the city's less damaged neighborhoods, fueling sales there.

Although real estate transactions in many Gulf Coast firms are setting records, the road to ownership post-Katrina is far from smooth _ especially on the insurance front.

Both State Farm Insurance Co. and Allstate Corp., the nation's No. 1 and No. 2 insurers that together controlled over half the homeowners' insurance market in Louisiana pre-Katrina, have stopped writing new policies in New Orleans, the companies said. Finding affordable insurance is a struggle.

"I basically went down the list and called every single insurance company I could find. No one is writing in Orleans Parish right now," said Robert Boulanger, who's in the process of closing on an unflooded house just outside the French Quarter, one of the city's most desirable neighborhoods dating to the 1700s.

With private insurers pulling out, buyers are overwhelmingly forced to seek coverage from the state-run Louisiana Citizens Property Insurance Corp., which charges higher rates than its private-sector competitors. For 28-year-old Boulanger, a construction manager, that means he'll pay over $4,000 this coming year to insure the home he's buying for $240,000.

"It's really pushing the envelope of what I can afford," he said.

In flooded neighborhoods throughout the city, "For Sale" signs are sprouting from gray lawns, beside mounds of stripped wallboard. With doors punched in, Realtors advise prospective buyers to simply walk in: "Easy to show. Door is open," says one ad for a flooded, white shotgun.

Other ads promise the chance to own "the house of your dreams," as did the Coldwell Banker ad for the 2,200-square-foot home that caught the attention of 24-year-old Autumn Nurton.

"Before the storm, I could never have afforded a house like this. It's the house I've always wanted and now I can afford it," said the exuberant young woman. "I have to do the work, but in a sense that's even better because I can put myself into it. I've already sort of moved in in my heart."
 

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Not surprising...we're going to be having a housing boom for the next decade. This city is a contractor's dreams coming true...there are thousands of them down here now, and all are making a killing.
 

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I'd think it'll level off. A housing stock built for some 650,000 residents yielded a blighted housing number of some 25,000+ pre-Katrina because of our out-migration since the mid-60's. Lord knows we probably won't ever have that number of residents living in the city limits ever again. It'll be interesting to watch what happens with real estate over the next 5-10 years.
 

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Boom?

Of course there will be more sold when the inventory is made available again to buy.

How about housing starts which are a much better indicator, I can guarantee that isn’t in a boom.
 

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Actually housing starts are probably at record leves also. KB Homes is building as many as 20,000 homes in one spot on the west bank, as well as about 60 sites on the east bank for new homes. Also, high rise condos look very popular for the future of the city. (many in the works, I'm about to put a deposit down for one called Vantage tower) I'm living in Atlanta right now and have for the past two years, but boy do I miss the big easy. You have to remember that New Orleans will be booming for YEARS to come. With the tax credits and construction for people moving back. And the people that don't move back will be replaced by others. For example, just at the resort I work at in Atlanta, two of my co-workers have moved to New Orleans since the storm, and have never lived there before. One went to start a drywall business, and the other to work in a hotel. Also, when kids are out of shcool this summer people will be returning by the droves. This housing BOOM will definately not subside for a while. :)
 

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Well obviously. They have to rebuild. I am glad that they are rebuilding though.
 

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Cannonized said:
That's the plan. I guess we'll see.
To build 20,000 homes simultaneously?? :runaway:

I'd really like to see an article or press release stating that because there's no way a builder just decides to build 20,000 houses at one time in a market that has a very questionable long term future. :lol:
 

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Marjorie Fair said:
To build 20,000 homes simultaneously?? :runaway:

I'd really like to see an article or press release stating that because there's no way a builder just decides to build 20,000 houses at one time in a market that has a very questionable long term future. :lol:
I actually agree with you. Certainly seemed unatainable to me too. Louisianacharm explained that one.
 

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Discussion Starter · #13 ·
Marjorie Fair said:
Boom?

Of course there will be more sold when the inventory is made available again to buy.

How about housing starts which are a much better indicator, I can guarantee that isn’t in a boom.
Well, a Texas paper says it's a boom, Marg., the always so negative one.

As for KB Home.... Here you go:

(AP) The first major housing investment in the New Orleans region since Hurricane Katrina will come from a California home builder planning a community with as many as 20,000 homes.

The venture, called KB Home/Shaw Louisiana LLC, would build new homes "with the goal of providing permanent housing and increased economic development" in Louisiana, the companies said in a statement on Tuesday.

"We want to rebuild New Orleans," said Bruce Karatz, chairman and chief executive of KB Home, which has partnered with The Shaw Group of Baton Rouge to buy a 3,000-acre tract near Avondale in Jefferson Parish.

The project will be built on a tract being sold by landowner Joseph Marcello. The area has been considered one of the last big tracts in the region suitable for development because of its elevation.

"These are major players putting their money where their mouths are," parish president Aaron Broussard told The Times-Picayune. "They are anticipating a great influx of people coming to Jefferson."

The Shaw Group, a consulting, engineering and construction company, has a ready pool of workers in a labor-short market.

"We've got the labor," said Jim Bernhard, Shaw's chairman and chief executive officer. "I think we can get it done."

Karatz said he will need the cooperation of government officials to expedite the necessary regulatory proceedings.

Karatz did not offer a specific completion date and would not reveal its cost. The company would not discuss possible price ranges for the homes. Karatz said the average KB home sells for about $277,000.

Other development could occur north of Lake Pontchartrain in the Mandeville-Covington area and in Slidell, said Steve Davis, Gulf Coast president of KB Home.

Last year, publicly traded KB Home reported building 31,546 homes across the country, posted revenue of more than $7 billion, and employed about 6,000 people.
___________________________

Granted, it won't happen all at once. But it's about to start.
 

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Discussion Starter · #14 ·
Marjorie Fair said:
Boom?

Of course there will be more sold when the inventory is made available again to buy.

How about housing starts which are a much better indicator, I can guarantee that isn’t in a boom.
Well, a Texas paper says it's a boom, Marg., the always so negative one. Who are you to say what a boom is? For your info, in the issue of Builder Magazine, New Orleans was listed among the top housing markets in the nation for the first time in years.

As for KB Home.... Here you go:

(AP) The first major housing investment in the New Orleans region since Hurricane Katrina will come from a California home builder planning a community with as many as 20,000 homes.

The venture, called KB Home/Shaw Louisiana LLC, would build new homes "with the goal of providing permanent housing and increased economic development" in Louisiana, the companies said in a statement on Tuesday.

"We want to rebuild New Orleans," said Bruce Karatz, chairman and chief executive of KB Home, which has partnered with The Shaw Group of Baton Rouge to buy a 3,000-acre tract near Avondale in Jefferson Parish.

The project will be built on a tract being sold by landowner Joseph Marcello. The area has been considered one of the last big tracts in the region suitable for development because of its elevation.

"These are major players putting their money where their mouths are," parish president Aaron Broussard told The Times-Picayune. "They are anticipating a great influx of people coming to Jefferson."

The Shaw Group, a consulting, engineering and construction company, has a ready pool of workers in a labor-short market.

"We've got the labor," said Jim Bernhard, Shaw's chairman and chief executive officer. "I think we can get it done."

Karatz said he will need the cooperation of government officials to expedite the necessary regulatory proceedings.

Karatz did not offer a specific completion date and would not reveal its cost. The company would not discuss possible price ranges for the homes. Karatz said the average KB home sells for about $277,000.

Other development could occur north of Lake Pontchartrain in the Mandeville-Covington area and in Slidell, said Steve Davis, Gulf Coast president of KB Home.

Last year, publicly traded KB Home reported building 31,546 homes across the country, posted revenue of more than $7 billion, and employed about 6,000 people.
___________________________

Granted, it won't happen all at once. But it's about to start.
 

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I already published the press release on this forum on Dec. 5 of last year. They've already begun site work over there on this huge development.

Massive subdivision planned on West Bank

By Greg Thomas
Real estate writer

A California homebuilder plans to develop a massive West Bank community with as many as 20,000 residences, marking the first major investment in the region since Hurricane Katrina destroyed or damaged some 200,000 homes.

"We want to rebuild New Orleans," said Bruce Karatz, chairman and chief executive of KB Home, which has partnered with the Shaw Group of Baton Rouge on the purchase of a 3,000-acre tract of land near Avondale.

The two companies will work together to build condominiums, townhomes, single-family homes, and retail stores on the property.

"We're talking a new city," said Steve Dwyer, an attorney representing Joseph Marcello, the landowner who contracted to sell the Churchill Farms property, as the tract is known, to the partnership for an undisclosed sum. The Marcello tract has long been considered one of the last big tracts in the metro area suitable for development because of its elevation.

The KB Home project, arguably one of the largest real estate deals in the area's history, will be officially announced at a press conference this morning. But the proposal has already won the backing of Jefferson Parish President Aaron Broussard, who has been briefed on the project.

"I think this is the most exciting news Jefferson Parish can hope for at this time. Any time two major national corporations make a commitment to come into this parish speaks of the confidence (they have) in the rebirth and resurgence (of the area)," Broussard said.

"These are major players putting their money where their mouths are," he said. "They are anticipating a great influx of people coming to Jefferson (Parish)."

The Shaw Group, a consulting, engineering and construction firm, will bring more than its building expertise to the partnership with KB. Shaw also has a ready pool of workers in a market where labor is hard to come by.

"We've got the labor," said Jim Bernhard, Shaw's chairman and chief executive officer. "I think we can get it done. Everyone needs a home to stay in."

Karatz said the partnership between Shaw and KB Homes makes for a powerful entity, and he thinks the two can get the job done quickly.

But he said he'll need local officials to cooperate by expediting the necessary regulatory proceedings.

"What normally takes three months, we need done in weeks," said Karatz, who met with Governor Kathleen Blanco Monday to brief her on the project. The governor's office couldn't comment on the meeting late Monday.

Broussard said he will attempt to expedite any red tape involved.

"Timing is so critical" for the developers, Broussard said. KB Home and Shaw Louisiana have "got to get into the marketplace (quickly) to be a very competitive option."

Furthermore, the availability of attractive new construction could help lure evacuees back to the area, Broussard said.

"There's a work force that has to get back into this area," Broussard said. "We're contingent on housing to sustain the rebirth of the hospitality industry. This is virgin acreage available immediately to the market place," he said.

Byron Lee, the District 3 Councilman for Jefferson Parish whose area includes Churchill Farms, said he "certainly welcomes a Fortune 500 company coming to Jefferson Parish."

The land is off Highway 90 near Lapalco Boulevard, roughly running from Nicole Boulevard to the hurricane protection levee in the Avondale-Waggaman area. Karatz did not offer a specific completion date for the project and would not reveal the total cost of the project.

Jefferson Parish may not be the only place KB Homes pursues development opportunities.

Steve Davis, Gulf Coast President of KB Homes, said he sees possibilities for additional development in Mandeville-Covington and in Slidell.

KB Home is a powerhouse in the industry. Last year, the publicly traded company build 31,546 homes across the country, posted revenues of more than $7.05 billion, and employed approximately 6,000 people. The average KB Home sells for about $277,000, according to Karatz.

Shares of KB Home have climbed steadily over the past year from $44.63 in the first week of December 2004 to a close of $71.07 Monday, down 13 cents from Friday's close.

Shares of the Shaw Group closed at $30.63 on Monday, up $1.03 over Friday's close.
http://www.nola.com/newslogs/tpupda..._05.html#097971

http://skyscrapercity.com/showthread.php?t=290778
 

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louisianacharm said:
^^it was 2000 not 20000, i think there was a typo in the article, and people jumped to conclusion.
It's no typo...that was a rumor because no one could really believe it was 20,000. But, it really is and it is sorely needed. I'm glad to see this part of Jefferson Parish on the Westbank land this kind of development.
 

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So yes, thanks for providing the statments that say these 20,000 homes/units will be built AT THE SAME TIME.

Why is it when I ask a simple direct question I always just get the go around?
 

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Sinkingingoo said:
All 20,000 will most likely not be built all at once, just proving that this is a sustainable boom. KB homes is not the only one in the market. There are several condo towers in the works Tracage, Vantage, and the Trump tower, to name a few. Plus the North shore has quite a few developments planned.
I believe the community will be built over 10 years. We are also demoloshing thousands of homes in Metro New Orleans that were flooded, refurbishing others, building parks, golf courses, new retail outlets, etc....this construction undergoing in a major metropolitan center that was devastated by this hurricane, is going to be going on for years. Nevertheless, it's very interesting to watch unfold. Questions about the viability of the market are only answered by the developments we see announced. Developers "develop," to make a profit. It's that simple. If they don't feel like there is money to be made, they wouldn't be here. But, they are here, they are building, and the market is so viable, they can't, right now, build fast enough to meet demand...
 

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We are seeing alot of activity take place in Slidell due to the huge influx of people to the northshore since the hurricane. In the last 8 months work has begun on a new Home Depot... a new Rouse's Grocery Store...a 16 screen Grand movie theater...a Texas Roadhouse restaurant...a new Sonic...a 400 home subdivision announced off Haas Road...and several smaller subdivisions north of I-12. I've also seen billboards for the two 22 story condo towers planned on the Slidell lakefront.
 
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