Anyone have any idea how the Katrina disaster could affect the real estate market nationally? Is now a good time to start investing or should I sit tight for a while before moving on anything?
Adam
That is still hard to say I honestly believe that will not hurt the economy as bad as you would think! It might nudge it but it will be a minimal nudge. I also look at it a little different then most would I buy below market anyway NEVER PAY RETAIL!!!
*Anyone in the Louisiana, Mississippi, Alabama and all other effected areas our thoughts and prayers are with you all!
I’m new to this, but it is my guessthat the only affected market area would be in the devestated areas. With the advent of old homes being replaced by newer ones, the market values of homes would probably rise in the area.
Of course this is just an un-educated guess.
I think you will see rental rates in areas within commuting range of the devastated areas rise significantly. There are 300,000 ± displaced in New Orleans (the 35th largest city in the country)…some of those folks will refurb, some will tear down and rebuild, some will just move away. The folks that decide to stay will need to live somewhere during the construction (to whatever level that entails). Also, those displaced will want to move back as close as possible as soon as possible.
For the longterm, I think that you will be able to get some fairly significant bargains in the affected areas if you can deal with the damage, the on-setting mold/mildew problems, and the critters (the New Orleans/southern Louisiana areas are absolutely infested with alligators and snakes right now as they are also displaced).
Just my thoughts…
Keith
Our thoughts and prayers are with all who were affected by the hurricane.
I would have to agree with Keith. It will be awhile before the dust settles. The surrounding markets will be barraged with the need for short term/long term leasing.
I do not know that property sales in those areas will increase as people still own property.
I do believe that the area will become a mecca for contractors, as Florida did after the previous hurricanes.
Great thoughts Keith!
It might effect the interest rate on a national level it is hard to tell! I do know for fact that insurance rates are going to be sky high! I know after Ivan the horrible went through Alabama my insurance doubled! Causing the cost of living to nudge… Notice I said nudge not a huge rise in the cost’s. This is by far the worst weather related tragedy I have seen in my life time and I know that goes for most so as far as that goes it is hard to tell what is going to happen as we all know we have absolutely nothing to compare this to! As far as New Orleans and all other affected areas it will never be the same again over 20 Billion in damage and years of clean up! OUCH!!!
I wasn’t even thinking in respect to buying and renting in the affected areas though I’m sure many investors will take advantage of those peoples situations. I was thinking about other areas of the country mainly NY, NJ and CT. I live in NY and will be sticking close to home. Even if I was willing to invest and rent in the Katrina affected area I’m not sure I would feel quite right about charging astronomical rents to the victims just because I could.
Hey,
25,000 refugees going to Houston and DFW each, respectively. Here in Wichita Falls, Tx getting influx of 1100 airmen to the local AFB, the one just getting BRAC reductions. So, it seems it will be a help in that rentals, etc. will be needed in these areas. Most of these folks will end up being permanent residents as there is nothing to go back to and won’t be for the near future. The 3 - 4 month estimate is way optimistic it seems to me. The magnitude and future reverberations of this catastrophe have yet to be seen or even foreseen. But, as the gurus always tell us, “anytime is REI time.” Shame on those who will take advantage of these people in their time of need, however. This is an opportunity for rei’s to show that there is a way to be honest, caring and compassionate and still make money.
Peace,
Richard
Overall i don’t see this affecting the RE markets, if anything we now that rates are not going to move, based on the conversation Bush had with Greenspan over grilled salmon and peas :). If the rates cap off, you may see another surge in the buying market as a rate increase will now be a future prospect.
For the LO market, think about all those housing projects that will now be built in new areas, those areas are going to see a decline in property values but as they move other areas will prosper from that.
This is all before coffee so apologies for typo and coherency
First and foremost is like it has been said New Orleans is the 35th largest city in US. There is over 300,000 displaced people. Being ion a flood plain I truly pray a lot of them had flood insurance.
My uneducated thought is that it will take years to rebuild, they are looking short tem at over a month to fix the levees and pump out the water, next comes over a month of getting drinkable water back and then they can start cleaning up the waste and mud and mildew, etc.
The people who have insurance is most likely going to write off new orleans and think of nicer places to live (Nicer could be 5 miles down the road or up-root and move to someplace they dreamed of). What I see is construction going up but the movers are going to need to rent first and then look to buy. The ones who stay are going to need to rent while they rebuild and clean. This is for all areas that were hit not just New Orleans. and yes I can see Insurance spiking worse then the gas prices have.
Sadly to say there is also going to be unclaimed property from the families that not only lost their homes but their lives. Please see http://www.cnn.com/2005/WEATHER/09/01/obliterated.town.ap/index.html
New Orleans will be in the forefront of everyones mind but soon it will turn to Mississippi and locations that got wiped out from the Hurricane.
I think the big factor that may affect the entire Country is the oil production/distribution issue. If the region’s oil production and distribution is hurt, we could see a further increase in oil prices nationwide.
Of course, the $64,000 question still remains: “Will rising oil prices hurt the real estate market nationwide”?
That remains to be seen.
PS - I’m doing a series of charity auctions on Ebay for my courses - 100% will go to the Red Cross Disaster Relief fund. I would encourage other authors to do the same.
Look for rental rates to skyrocket in every major city
because SECTION 8 vouchers will be given out like candy from the “embarrassed” Bush White House.
This is the quickest and cheapest way to get folks out of the stadiums, and I’m betting that lots of these poor people would love to start over in some other city expecially with the government paying the bill.
Good destinations for Section 8 Las Vegas and Phoenix
Howdy William:
That is a great gesture. A lot of folks are pitching in to help. I went to several garage sales Sat and folks were going to send the proceeds to Red Cross etc. I bought 2 sodas and gave the little kids $20 and told them to keep the change. They were excited and it made me feel a little better too. I plan on helping with jobs in Corpus when I get the financing for the building I am doing there. A job is what a lot of folks will want and not a handout. Sure they need some fast help for food and shelter.
As far as the economy, yes it will hurt. My friends in the antique business for instance have not been the same since 911 and I know this and higher prices for gas are killing his business and other retail sales as well. We will all get over it. I just hope there are no fixed prices like in the 70’s for gas. It was a bit cheaper but you could not get any. Horrible times too.
Why should the Bush White House be embarrassed? If anyone is to be embarrassed, it’s the mayor of New Orleans and the governor of Louisiana.
Bush declared a state of emergency at least two days before the hurricaine hit. This allowed the local and state officials to put into position whatever resources they needed ahead of time. But what did they do? Ordered a manditory evacuation. That’s good for those who could evacuate. What about the elderly, the poor, the sick? The local government could have had busses upon busses picking these people up and getting them out of the city. Did they? No.
What about the able people that decided to stay and “ride it out”? They could have avoided the entire disaster and have been safe somewhere else.
What about the criminals who wanted to stay knowing that they could steal and take advantage of the situation? Maybe we could blame them?
You certainly can’t blame FEMA either. FEMA answers directly to…once again…local and state officials and plugs into their resources. But again, the local and state officials didn’t do anything to prepare.
After the hurricaine hit, all communications and physical access to areas were lost and what we saw the first 3 days was what happens when there are no emergency plans.
As soon as Bush and the federal government stepped in, that’s when things began to happen. So if you’re going to point any fingers, at least point them in the right direction.
As for property values, I guess it depends on whether they actually rebuild New Orleans or not. If they do, I wouldn’t mind being a “New Homes” salesman down there.
Well said PA-Agent.
PA…respectful post, thanks on behalf of us that support this President and his administration…
Kindest Regards,
CB
Hey,
There is going to be all sorts of finger pointing over the response (or lack of) to this hurricane. Nobody, repeat nobody, was or is prepared for a disaster of this magnitude. We should be pointing up for divine help and guidance. We should be pointing out and picking one person to help. And we should be pointing in and ask “Am I going to help at least one person (refugee) this hour, this day.” Only then have we the right to point a finger and ask, “What did you do?”
Peace,
Richard
I think William is right, I think that oil distribution is going to be a challenge. But I also think that we are going to see a jump in building supplies. When Ivan hit last year it was tough for a lot of people to get lumber to rebuild. They spent an additional year renting because they could not get the supplies.
[b][/b] I am praying for those who lost their families and friends, and my heart goes out to all the displaced victims.
Ramona
With oil distribution the price of everything goes up do to the fact what do the trucks and trains that bring in the food and supplies run on! Diesel and oil and gas! If you are paying more per gallon as a driver you have to raise your prices in order to stay in Business! Let’s say for instance When I use to charge a hourly consultant fee of $45.00 if I had to drive 80 miles I would probably jump that to $50.00 at least! It all boils down to SUPPLY AND DEMAND!!!
“Bush declared a state of emergency at least two days before the hurricaine hit”. This allowed the local and state officials to put into (wrong)
A State of Emergency by the President means the FEDERAL government is in charge. They have to be4 consulted on all state and local decisions.
I was in the Coast Guard during Vietanam War era, and we could get a Search and Rescue ship with full crew out of the Harbor in 4 HOURS. That was our only job, and we drilled weekly for just such an emergency.
If a phone call doesn’t trickle down from a FEDERAL government official, like a FEMA head. no one is going to order the Coast Guard out to do their mission.
I guarantee the trained military in all our branches could have saved lives and fed these people, but everybody in
the Federal government was on Vacation mode from their hard jobs, because its really hard work, its really hard.