csua.org/u/deq -> news.yahoo.com/news?tmpl=story&u=/latimests/20050915/ts_latimes/speculatorsrushinginasthewaterrecedes
Click Here The real estate agent has $10 million in the bank, wired by an investor w ho has instructed her to scoop up houses any houses. Her backer is a Miami businessman who specializes in buying storm-ravaged property at a deep discount, something that has paid dividends in hurri cane-prone Florida. But he may have a harder time finding bargains this time around. In some ways, Hurricane Katrina seems to have taken a vibrant real estate market and made it hotter. Large sections of the city are underwater, b ut that's only increasing the demand for dry houses. And in flooded area s, speculators are trying to buy properties on the cheap, hoping that th e redevelopment of New Orleans will start a boom. This land rush has long-term implications in a city where many of the poo rest residents were flooded out. It raises the question of what sort of housing if any will be available to those without a six-figure salar y If New Orleans ends up a high-priced enclave, without a mix of cultur es, races and incomes, something vital may be lost. "There's a public interest question here," said Ann Oliveri, a senior vic e president with the Urban Land Institute, a Washington think tank. "You don't have to abdicate the city to whoever shows up." For now, though, it's a seller's market, at least for habitable homes. Two months ago, Steve Young bought a two-bedroom condo in New Orleans' Ga rden District as an investment for $145,000. Last month, he was transfer red by Shell Oil to Houston. In a posting on Craigslist, an Internet classified advertising site, Youn g asked $220,000. He got a dozen serious expressions of interest enoug h so he's no longer actively pursuing a buyer. "I'm pretty positive the market's going to move up from here," he said. "I thought this storm was the end of the city," said Arthur Sterbcow, pre sident of New Orleans-based Latter & Blum, one of the biggest real estat e brokerages on the Gulf Coast. "If anyone had told me two weeks ago that I'd be getting the calls and e- mails I'm getting, I would have thought he was ready for the psychiatric ward." Messages from those wanting to buy houses whether intact or flooded a nd commercial properties are outrunning those who want to sell by a fact or of 20, said Sterbcow, who has set up temporary quarters in his firm's Baton Rouge office. "We're pressing everyone into service just to answer the phones," he said . These eager would-be buyers may be drawing their inspiration from Lower M anhattan, which proved a bonanza for those smart enough to buy condos th ere immediately after the Sept. Of course, in southern Louisiana, everything is hypothetical for the mome nt. The storm destroyed many property records and displaced buyers, sell ers, agents and title firms, so no deals are actually being done. Insura nce companies haven't started to settle claims yet, much less determine how, or whether, they will insure New Orleans in the future. But people are thinking ahead, influenced by a single factor: the belief that hundreds of billions of dollars in government aid is going to creat e a boomtown. The people administering that aid will need somewhere to l ive, as will those doing the rebuilding. So will employees of companies lured back to the area, and the service people that attend to them. All this will lead to what Sterbcow delicately calls a "reorientation" of the city. "Everyone I talked to has said, 'Let's start with a clean sheet of paper, fix it and get it right,' " he said. "Some of the homes here were only held together by the termites." What the owners of the city's estimated 150,000 flooded houses will get o ut of "reorientation" is unclear, especially if the houses were in bad s hape and uninsured. Some black New Orleans residents say dourly that they know what's coming. Melvin Gilbert, a maintenance crew chief in his 60s, stood outside an e legant hotel in the French Quarter this week and recalled how the neighb orhood had been gentrified. He remembered half a century ago when the French Quarter had a substantia l number of black residents. "Then the Caucasians started offering them $10,000 for their homes," he s aid. "Well, they only bought the places for $2,000, so they took it and ran." The white residents restored the homes, which rose quickly in value. Gilb ert said he expected the same dynamic when the floodwaters receded in th e heavily black neighborhoods east of downtown. The question of who should own New Orleans is already sparking tension. T he first posting seeking New Orleans property "in any condition or locat ion" was placed on Craigslist on Aug. W ith small variation, it was repeated numerous times over the next week. "Do you read/watch/understand any of the ne ws broadcasts coming from the city? Or do you just go to 'Cashing in on Desperation, Despondency, and Depression: How to Make a Zillion Dollars investing in Disaster Area Real Estate' seminars. The process of tracking down owners of deluged houses is greatly slowed b y the absence of records. It's not going to be easy to find these people , said Farris, the Baton Rouge real estate agent. Farris demurred, saying it was too early to tell, but probably only the v alue of the land, if that. Though the French Quarter may be back to life within months, outlying districts such as North Bywater and the Lower 9 th Ward will take years, if they ever do. Investors might hope this is t he equivalent of buying land on the outskirts of a boomtown, but it's no t a guarantee. For one thing, there are already proposals to convert certain flooded are as including some water-logged neighborhoods into parks. Under the S upreme Court's recent ruling broadening the definition of eminent domain , speculators could be forced to sell their properties to the government . That would be a great outcome for many homeowners in the parishes south a nd east of New Orleans that bore the brunt of the storm. Six months ago, Todd La Valla, a Re/Max real estate agent, bought a four- unit apartment building for $59,000 in the community of Buras, an uninco rporated hamlet in Plaquemines Parish 55 miles southeast of New Orleans. The tenants evacuated in the storm, or at least La Valla hopes they did. He's sure the building is gone too, like just about everything else in t he area. La Valla had no insurance, which means his $10,000 investment i s probably a complete loss. "I've had calls from investors in Los Angeles, Las Vegas, New York lookin g to buy property," La Valla said. "This is going to be hard for the poo r, the elderly, those that didn't have insurance. At first, Lucia Blacksher thought she was in the bad news group. In June, she and her boyfriend put their entire savings, about $35,000, into the ir dream house a century-old shotgun Victorian in the New Orleans neig hborhood of Mid-City. When the storm came, they fled to Blacksher's pare nts' house in Birmingham, Ala. Her boyfriend, a Vi rginian who figures he's seen enough of hurricanes to last him the rest of his life, wants to move. Last week, Blacksher was worried she would lose her beloved house either to foreclosure or a forced sale. One of those bottom-feeders would get i t She was more optimistic Wednesday. "Because the house survived the storm, it will be even more valuable," sh e said.
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