[StBernard] The new New Orleans

[Westley Annis]

The new New Orleans
Signs of life in post-Katrina real estate market
By Inman News, Thursday, September 3, 2009.
 
By SERGIO MOSQUEDA

Sonya Becknel drew a flood zone map the size of her desk before buying a
home in Chalmette in St. Bernard Parish, southeast of New Orleans.

St. Bernard was one of the hardest-hit areas of New Orleans after Katrina
struck four years ago. The parish is rebounding, even though some returning
residents did not receive restitution for their flooded homes after the
storm.

"You can see the true grit of the people," said Cliff Reuther, Becknel's
agent and Prudential Gardner broker and manager.

Teens who evacuated the area with their families come back and make it their
home -- Reuther said he has seen buyers in their 20s come with friends to
St. Bernard to buy and renovate homes. 

"We knew where we were buying," said Becknel. Four years ago, St. Bernard
Parish was under 15 feet of water, and she reminded herself that Katrina
flooded homes outside of the officially designated flood zones.

Seeking to avoid $1,500 to $3,000 in flood insurance premiums, she and
Reuther developed a flood zone insurance-coding system: "A" for expensive,
"B" for affordable, "C" for flood danger.

Becknel was careful when considering homes, since flood-zone maps change
frequently and could become outdated in months. "It helps that I grew up
here," she said.

She stayed within the "B" range of her coding system and found her home on a
dead-end side street in a neighborhood devoid of street signs -- she had to
ask people on the street to direct her to the home. Now, she said, those
same people "invite us for drinking tea and boiling crawfish," but the
neighborhood had at first seemed "desolate -- kind of scary."

There are still some empty slabs waiting for a new home, while some
flood-damaged homes still await demolition. Becknel arrived to a renovated
brick home that overlooks three empty lots, and now her next-door neighbor
is renovating his home.

Post-Katrina renovations were notoriously shoddy. Investors came early after
the storm and reconstructed homes, although many did not recoup their
investments due to a shortage of jobs and lack of buyers immediately after
Katrina, said Reuther.

For a time, remodelers rebuilt homes with the same materials bought from the
only home improvement store left in the area after Katrina. Becknel said she
became a perceptive buyer because, after looking at many homes, she noticed
some sloppy installation.


"You would walk into places and notice something right away," said Becknel.
If the installation of standard material was poor outside, she would ask
herself, "What's behind the walls?"

"Why in the world would you by a home with a great kitchen for $150,000 if
it had warped countertops when you could find a home completely rehabbed for
$114,000?" Becknel said.

Becknel added that she thinks more people will return to Chalmette once it
can offer more jobs. 

St. Bernard averages about 30 home sales per month, and home prices for the
average 1,600-square-foot home fell from $150,000 to about $80,000-$110,000
after Katrina, said Reuther. Nowadays, homes in the area can sell for up to
$300,000.

While Becknel and her partner are beginning their life in Chalmette, Loren
Wakefield always knew she would leave New Orleans.

She and her husband have relocated, leaving behind a home they rehabbed in
the Lakefront area of Orleans Parish. 

"That was their mission," said Lee Pennebaker, Wakefield's listing agent and
Coldwell Banker TEC Realtor. "It takes a special person to go in and
rehabilitate these properties."

The Wakefields bought the home in May 2007 and listed the home in May 2009.
New Orleans real estate is a "peculiar market," said Wakefield. Some homes
need rehabbing in their neighborhood, and the neighborhood has a wide range
of pricing: from $350,000 to $1.5 million.

Pennebaker said many buyers previously priced out of the area can now afford
to live in the Lakeshore area. Some buyers want an area that has never
flooded, while for others "that's exactly what they want," he said.

Just south of the Lakefront area -- in the Lakeview and Lakewoods
communities -- the real estate market is still slow, said Anne Comarda, a
Realtor for Prudential Gardner. The areas appeared devoid of life -- even
birds and squirrels -- for a long time after Katrina, Comarda said, while
now there are children riding bicycles in the streets.

Someone who moved here from out of town would see only empty lots, said
Comarda, but even having empty lots is progress -- "you don't have empty
homes falling (in price)."

Even so, GiGi Gaubert Burk, co-owner of Burk Brokerage, advises buyers who
move to the area that they should be physically fit to evacuate if another
hurricane threatens the Lakefront. She does not see many elderly buyers for
this reason, but she does see many young professional buyers moving to the
Lakefront area.

And flooded areas and gap-toothed subdivisions make it difficult to find
meaningful comparable properties for appraisal purposes.

One agent said sellers once had an inflated opinion of the pre-Katrina
market. Now they say, "Get it sold." Sellers recognize the market is down
and financing is tough. Some may even be inclined to give their home to a
listing agent and have them sell it at any price. 

Sellers could factor in the cost of rehabbing for buyers who are choosing
between a flooded or a remodeled home, though rehabbing can put a house
price "on the high side," Wakefield said. 

When Wakefield scouted her home in New Orleans "there was a lot of
devastation, but every day we would see the progress," she said. Now "it's
painful to leave."

New Orleans, said Wakefield, was "an interesting journey we'll never
forget."