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Louisiana real estate booms after Katrina

Hurricane Katrina has created a real estate boom in Louisiana's usually sedate state capital, now bursting at the seams as rescue workers arrive and evacuees scramble to get on with their lives.
Heavy traffic is seen on a Baton Rouge highway as Hurricane Katrina evacuees arrive this week, doubling the population to half a million people.
Heavy traffic is seen on a Baton Rouge highway as Hurricane Katrina evacuees arrive this week, doubling the population to half a million people. REUTERS
/ Source: Reuters

Hurricane Katrina has created a real estate boom in Louisiana's usually sedate state capital, now bursting at the seams as rescue workers arrive and evacuees scramble to get on with their lives.

Baton Rouge, just 70 miles northwest of New Orleans and relatively untouched by Katrina, is believed to have doubled its 250,000 population in just over a week, local officials said.

Demand for residential and commercial property is so strong that rental vacancy is an oxymoron and buyers are bidding against each other for places to live. As available housing dwindles, buyers waive inspections and pay cash for properties they may not have even seen.

"It's crazy," said Herb Gomez, executive vice president of the Greater Baton Rouge Association of Realtors. "(Realtors) are busier now then they have been in their entire careers."

Stephen Moret, chief executive of the Chamber of Greater Baton Rouge, said his members are running at full tilt. But it is an unexpected prosperity that he and other merchants are trying to keep in perspective.

"Everything that's happening here is against the backdrop of the terrible devastation in New Orleans," Moret said. "I wouldn't even call it bittersweet. Awkward is more like it. We're trying to accommodate the needs of evacuees."

The real estate market is red hot, with both commercial and residential properties becoming increasingly scarce and valuable.

A normal, active month in Baton Rouge would be marked by about 900 existing home sales. In the past 13 days, even the most conservative estimates say inventory has dropped from 3,600 homes to less than 2,500.

Moret says the number of available homes is more likely under 500 as real estate agents, swamped with closings, have not had time to relay their sales results.

"Virtually all rental units are gone and all residential stock will soon be gone," Merot said.

The question remains whether the boom will eventually bust as recent transplants return to a rebuilt New Orleans -- one of America's most famous cities, where residents revel in a unique culture of jazz and Mardi Gras -- in the months and years ahead.

"I'm of the opinion that they might not stay," said Gomez. "To live in New Orleans, you've got to love it. I don't think many of these people are going to be comfortable anywhere else."