A turn around is starting to materialize in the Louisiana economy that will have a major impact on the state's housing markets, especially New Orleans. Employment levels are the single most important factor when it comes to home sales, and jobs are expected to grow comprehensively.
The state is expecting to add nearly 36,000 jobs over the next two years. In northern Louisiana two food processing plants will hire thousands of new employees, and New Orleans businesses will attract thousands more.
Job growth should help the state's housing markets, in a slump the last two years after a sudden building boom following Hurricane Katrina had new home builders hurrying to construct homes for thousands of residents displaced by Katrina. Home sales have improved with the government's first time home buyers' tax incentive and lower home prices, but not to the degree that numbers need to rise for New Orleans to recover.
More than 150,000 homes were damaged or destroyed by Katrina and thousands still remain rotting in decay. Even as home sales improved in the city that annually celebrates Mardi Gras prices have been on a downward spiral, and are forecast to deflate slightly again in 2010 at 4.2% before a full recovery gets underway.
| City |
Forecast |
| New Orleans |
− 4.2% |
| Metairie |
− 3.4% |
| Baton Rouge |
4.0% |
| Lafayette |
5.4% |
| Shreveport |
2.9% |
Home sales have been sluggish in nearby Metairie even though sales picked-up with government incentives. But the market's close proximity to New Orleans has been holding it back from recovering in the downturn until the population grows and the job market improves. Metairie is projected to see improving housing sales in 2010 on marginal deflation of 3.4%.
In Baton Rouge the housing market hasn't suffered the pain of other areas, mainly because few foreclosures have impacted housing prices. Bankers didn't make a practice of selling adjustable rate mortgages that flew upward suddenly after a short time to levels that became unaffordable for home buyers. The more conservative practices protected the market to a large degree, but fallout from the financial crisis is having a slight effect on the local economy. However, the impact is minimal and average home prices are forecast to appreciate 4.0% in 2010.
A growing job market is supporting more home sales in Lafayette along with government tax incentives for home buyers. The credit crunch made it harder to get a mortgage for many buyers, but a state bond program helped to promote home sales and first time buyers took advantage of the program in growing numbers. Growing home sales in 2010 are forecast to send the local market higher to an average of 5.4% appreciation by the end of the year.
In Shreveport, the city is rising from it's sorted past battling crime levels and turning the community around with stricter law enforcement. Crime has been cut more than 30% as a result, and now Shreveport hopes to turn its housing market around with some of the most affordable homes in the state. Bargain hunters are making a run at many homes for sale as a result. Average home prices are forecast to inflate 2.9% in 2010.
