It may be obvious that there would be a strong sellers market for homes on the Mississippi Gulf Coast after tens of thousands of homes were destroyed by Hurricane Katrina.
Prices are up an average of 10% to 15%, and that comes on top of the average residential sales price on the Coast going up from $129,000 in 2004 to $152,000 in 2005.
“We are in a strong, strong sellers market right now probably with inflation in prices of somewhere between 10% to 12%,” said Bruce Kammer, a Realtor with Coldwell Banker Country Properties, Picayune. “We originally went up higher — 18% to 20% before Christmas. But after the New Year it has dropped down to a much lower percentage. In Picayune and Poplarville, we have a shortage of housing right now.”
The population of rural Pearl River County has almost doubled since the storm. There has been a major influx of residents from the Mississippi Gulf Coast and especially from the greater New Orleans area.
“We have basically lost our housing inventory after Katrina,” Kammer said. “I see it staying this way for a quite some time. We are experiencing a real building boom in Pearl River County, but we can’t build fast enough to supply the need.”
Conditions are similar on the Mississippi Gulf Coast. Don Halle, owner of Gulf Properties and Gulf Construction Company, Gulfport, says the scarcity of properties, housing in particular, has driven the price up quite a bit.
“There is a heavy demand for a short supply,” Halle said. “I also develop land and build houses. One of the things we are finding is we are running short on land that has utilities where we could be developing new subdivisions.”
Many homeowners who were flooded are repairing their homes. And they are staying.
“People don’t seem to be scared of coming back in those areas that got water this time but never before,” Halle said. “They are repairing their house.”
Regarding the market, he sees two things: Some people are putting very high prices on their home, testing the waters. Those homes aren’t moving very fast. But for people who have homes priced right, they are selling right away.
Beachfront property prices are extremely high. This was the zone of the most devastation from Hurricane Katrina, but continues to be in great demand — especially by condo developers.
“It seems people are willing to pay some of these high prices especially for these large tracks where someone can get a high density of units on it,” Halle said. “I have really been amazed at some of the prices I have heard people are paying for beachfront property. It was getting high prior to the storm for the demand these condo developers put on it. It seems like that has not gone down at all. If it has done anything, it has appreciated more in value.”
The amount of progress toward cleanup and recovery on the Coast has been remarkable. Halle recalls visiting a beach resort in Alabama this past summer before Katrina. The area still had debris on the roadsides and many shops and restaurants hadn’t reopened a year after Hurricane Ivan.
“I was real worried that if something like that hit us, we would be down and out forever,” Halle said. “It has been just the opposite. As bad as it has been, it seems it will be one of the best things that has happened because of the amount of money and interest flowing into this area. I have to believe it will be a long-term venture. We had two things working on our behalf: our casino industry and the fact legislators in a special session allowed the casinos to come on land, which brought some people back to work quick.
“And I give our governor a lot of credit. He was a strong leader with his contacts in Washington. The Governor’s Commission on Rebuilding giving us a plan to work by has meant an awful lot to us. Those two things put us on a road to recovery a lot sooner than most other areas.”
Chester Harvey, broker/owner of Chester Harvey Realtors, Ocean Springs, estimated average home prices are 15% to 20% higher than before the storm.
“It is a very strong market except we just don’t have anything to sell,” Harvey said. “We don’t have much to sell, so obviously it is a sellers market. Homes are selling in less than 30 days if priced correctly. Buyers are still very savvy. If it is way overpriced, it isn’t going to sell.”
Most real estate agents agree there aren’t any bargains out there — even for storm-damaged homes. There have been a lot of out-of-state investors coming in to buy homes, fix them up and flip them.
“They are buying sand, dirt, slabs and washed out homes,” Harvey said. “Anything with a sign on it, someone is there to buy it. We are selling washed-out homes and partially damaged homes, homes that have been gutted. People have been in these FEMA trailers three or four months and it is just killing them. They say: ‘We have just got to get out of this trailer.’”
People who lost their homes are generally opting for safer, higher ground for their next purchase, said Linda Toche, broker-owner of Linda Toche & Company, Biloxi.
“Most of the home buyers I work with are people who lost their homes,” said Toche. “They have no interest in buying anything that was flooded. Most of my clientele have been requesting that they don’t even be shown anything that got damaged with water. They don’t mind the roof, but no flooding.”
Toche said there is a particular shortage of homes in the price range below $150,000. There is greater availability of high-end homes running $400,000 to $500,000.
The Coast housing market was strong even before the storm. “Everything was selling,” Toche said. “I think the market was very robust before the storm. Now it is just a different kind of market.”
Contact MBJ contributing writer Becky Gillette at firstname.lastname@example.org.