Housing sales in Louisiana are being seriously impacted by the double-punch of the BP oil disaster and the expired federal tax credit. Before the oil hit the southern coastal region of the state progress was building in the wake of the devastating destruction left in the wake of Hurricane Katrina five years ago.
However, now both accelerating fears of the massive oil slick and a decaying economy leaves the region perplexed, threatening its fishing industry, tourism and the livelihoods of hundreds of thousands of residents.
It’s becoming clearer to many Louisianans with every passing day that the oil from the massive Deepwater Horizon disaster just 42-miles offshore moving into its waterways will take years to recover from the disastrous consequences, forcing residents to leave the area. The impact to the housing market in the most southern coastal region of Louisiana will be severe in Venice, Port Fourchon and nearby communities, forecast to send average home prices 15 to 17% lower on average in 2010, and another 12 to 14% lower the following year.
The Gulf Coast provides 25% of the nation’s fresh seafood, and no place else in the region being engulfed by the massive oil spill provided more than the fishermen of Louisiana, whose way of life and livelihoods are being destroyed by the massive sludge decaying the Delta region.
A turn around was starting to materialize for the state with federal assistance, but along the immediate gulf coast that turn around is anything but possible for a number of years as unemployment rises amid fears of a growing catastrophe.
The devastation will have a major impact on the state’s housing markets, but some markets, especially away from the gulf will be sparred much of the disastrous impact.
Job growth should act to help New Orleans over time as Gulf Coast residents move to the area, which has been in a slump after post Katrina re-building efforts slowed. But the seafood and good times are still alive in the “Big Easy” for tourists to enjoy.
However, neighborhoods of homes outside of the tourist zone, especially in the Ninth Ward destroyed by Katrina still stand abandoned to decay, awaiting efforts to bulldoze properties. Home sales should improve in the latter part of the year in New Orleans marginally, but the market is forecast to deflate 6.3% in average housing prices in 2010.
Shocked by the oil spill and economic fall-out, nearby Metairie saw home sales slow in the wake of the gulf coast disaster. But many who live on the gulf will move inland over the coming months and as the population grows and the job market improves with more employers moving to the area, Metairie is projected to see improving housing sales in the latter part of 2010 on average deflation of 5.8%. Bargain priced homes are ready and waiting for sale in Metairie.
Far away from the trouble on the gulf coast, Baton Rouge has seen its housing market improve over time with fewer foreclosures impacting home prices. The market was protected. But the impact from slower sales will affect the area slowing any sort of appreciation for the year to just 2.2% forecast on the average home.
Lafayette was pulling out of the downturn, driven by tax credits, a Louisiana state bond program and lower mortgage rates. But tougher mortgage underwriting guidelines aren’t making it easy for home buyers in Lafayette. Sales are projected to rise as more newcomers move to the area over the remainder of the year. Housing price inflation is forecast at a modest 3.2% through the year’s end.
The high crime rate Shreveport suffered from for years has been slashed with tougher law enforcement, inviting more residents to the community. Bargain hungry foreclosure buyers are picking up deals as home sales improve. Rising sales should regenerate over the remainder of 2010 on forecast housing inflation of 3.4% for the year.