In mid-September, Wayne Pierce gave his boss some very good news.
Pierce, property manager for Heritage Properties’ 8,000-apartment unit portfolio, reported the company’s 4,000 metro Jackson units were 100% occupied.
“Within 10 to 14 days of Hurricane Katrina, we filled every vacancy we had, including at a new construction property we’re still completing in Byram,” said Pierce.
Corporations grabbed multiple units, such as Entergy, who took over 100 apartments for displaced employees when the company relocated its offices to the WorldCom campus in Clinton. “We negotiated lease terms depending on the quantity rented,” said Pierce. “Several corporations stepped forward.”
Pierce said the company doesn’t plan to build more apartment units because of the influx of evacuees. “We see this situation as temporary, from 12 to 24 months,” he said. “Some individuals will stay, but I don’t see a long-term sustained demand of this kind.”
David Stevens, broker/owner of Century 21 David Stevens in Clinton, said it’s too soon to know how many people will make metro Jackson their permanent home.
“A lot of people who lost homes don’t know how much money they’re going to get from insurance companies, and it may take 30, 60 or 90 days to settle,” he said. “Once they find out, we’ll know more. From what I’ve heard, over 80% of people from the Coast are going back. New Orleans evacuees may be a different matter.”
Stevens said there’s a huge demand for storage rental space in the metro area because none is available along the Gulf Coast. “People who plan to fix up their houses and sell them or move back into them must have a place to store things,” he said. “One guy in my office yesterday said he was going back to the Coast, load up his stuff and bring it to a storage place he’d just rented on Springridge Road.”
Michelle Burford, CCIM, of H.C. Bailey Company in Ridgeland, said she’s received quite a few calls for office space “but my buildings won’t be ready until January or February, and the people I’ve spoken to need it right away.” Burford leased the company’s last remaining office space to Morgan Stanley.
“I think there was a lot of panic and potential repositioning initially, but the number of real deals that have come out of phone inquiries have been few and far between,” said Phillip Carpenter, CCIM, of Carpenter Properties in Jackson.
Nancy Lane, CCIM, president and commercial broker of Nancy Lane Commercial Realty Inc. and president of the Mississippi Association of Realtors, said there’s been a huge demand for industrial property.
“We’ve been working with agencies for short-term needs,” she said. “Either they’ve been knocked out of distribution space in New Orleans or are coming to the area because there will be a need for construction, with materials and supplies nearby.”
While the metro Jackson real estate market is seeing a spiked demand in temporary housing, office and distribution space, residential home prices have jumped 10% to 20% on the Mississippi Gulf Coast.
“Our supply is extremely low,” said Billie Myrick, Realtor for Moran Realty in Ocean Springs and executive vice president of the Biloxi-Ocean Springs Association of Realtors. “A house that would normally sell for $350,000 is now going for $435,000. And it’s not unusual to see a $170,000 house going for $215,000. Even houses lower than that are going for anywhere from $20,000 to $50,000 more than normal.”
In hard hit Ocean Springs, the housing market is even tighter. “I just listed a house yesterday for a lady who passed away,” said Myrick. “Before the funeral was over, neighbors were in the driveway telling her relatives, ‘Oh yeah, she said she’d sell it for $75,000.’ You might buy a doghouse in Ocean Springs for $75,000, but that’s about it.”
Now more than ever, cash is king, said Myrick.
“The regular Joes aren’t paying cash, but the doctors and attorneys are,” she said. “Even if they don’t pay cash, they have the borrowing power to get what they want because they have the income capabilities. The problem for casino employees who want to stay in the area is that they don’t have the income capabilities. Until the casinos re-open, they’ll be working at Wal-Mart. It will dramatically change their buying power, especially if they didn’t have flood insurance and were upside down on their mortgage.”
Contact MBJ contributing writer Lynne W. Jeter at firstname.lastname@example.org.