Flooded, Abandoned Properties Draw Speculators
BY Angus Loten
September 12, 2005--As residents fleeing New Orleans consider settling down elsewhere, their now empty homes and offices are drawing the attention of property speculators looking for deals.
Recent posts on craigslist.org, a classified ads website, are offering cash for "distressed properties" in the city's landmark neighborhoods, including the French Quarter and the Garden District.
"I am looking for motivated sellers who need/want to sell quickly in the Garden District," offered one post earlier this week. Another was seeking "any purchase of any property of value in or around New Orleans." Yet another claimed to be from a "Yankee hoping to buy a French quarter vacation place, any condition."
One buyer, striking a more noble tone, claimed to be helping relief efforts in buying abandoned properties and circulating much-needed cash.
The offers, which were mostly anonymous, have prompted angry responses from some of the city's former residents. Subsequent posts on the website urged local homeowners not to be "taken by all these people trying to make a buck on our hardship," and to guard against investors hoping to "buy property for pennies on the dollar." Others called the speculators carpetbaggers and scammers.
That didn't keep one owner from listing a downtown triplex on the site Thursday for $525,000, claiming "little or no" storm damage.
Whether or not property sales in the flooded city are up is harder to gauge. The National Association of Realtors, a group representing thousands of agents and brokers nationwide, is revising its forecast for real estate markets in the hurricane zone, including New Orleans, a spokesperson said Friday. Its full report, the first since the city was evacuated, is set to be released Sept. 14.
Still, Walter Molony, an NAR analyst, said that given the city is underwater and mostly empty, it is "highly unlikely" there is any legitimate real estate activity at all.
What's certain is that dry areas outside the city are experiencing a boom. According to agents and brokers in Baton Rouge, where the population has doubled to over 800,000 by residents forced out of New Orleans, average home prices have shot up $25,000 to $200,000. Many were bought sight unseen, with some 3,600 homes on the market dwindling to below 500, recent reports said.
Nathan Chapman, whose New Orleans marketing business was displaced by the flood, likened the property speculation to a gold rush. In a post on Inc.com's Katrina blog, Chapman said he's worried about being squeezed out of the state.