As previously reported, the housing market in the areas affected by Hurricane Katrina remains unsettled. A recent report discusses the Lakeview (70124) neighborhood of New Orleans, one of the most desired neighborhoods pre-Katrina.

Lakeview homes sold for an average price of $327,104 before Hurricane Katrina — a 16% appreciation above the average 2004 sale price and 43% above 2002.

A desirable neighborhood with good schools, restaurants, and close access to the laid-back atmosphere of the New Orleans lakefront made the community one of the hottest real estate markets in the city.

Post-Katrina levee breaches at the 17th Street Canal caused flooding to rooftops and damaged approximately 7,500 Lakeview homes. The breaks also introduced uncertainty and depreciation to the Lakeview real estate market.

The University of New Orleans Real Estate Market Data Center and Center for Economic Development reports just 14 units sold in Lakeview between September and December 2005 at a price of $162,214 — depreciation of 51% from pre-Katrina sales.

In the first quarter, the numbers showed some improvement with 72 units sold for an average of $174,753 — an increase of 7.7%.

Ivan Miestovich, director of the UNO Real Estate Market Data Center and the Center for Economic Development, said the Lakeview market has discounted prices and buyers investing about $50,000 to $70,000 per home in renovations.

Sellers are divided into two different categories: those holding their properties, undecided on whether to demolish or rebuild and waiting for the outcome of this hurricane season, and those selling their homes “as is” to recover losses.

“Lakeview has a much stronger chance of coming back than some of the other harder-hit areas because it was a very desirable community to live in before the storm with higher-end prices,” Miestovich said. “What I’m hearing from Realtors is that people are buying into the area at deep discounts and still coming out ahead at a much lower price than homes were selling pre-Katrina in Lakeview.”

Questionable return

The Lakeview Civic Improvement Association, established in 1924, surveyed residents on whether they would return after Katrina, and if so, what their plans are for their property.

Thirty-one percent, or 2,390 households in the Lakeview area, were represented.

Seventy-six percent said they would return, while 14% said “maybe,” and 10% said “no.”

Forty-eight percent said they would repair their homes, while 22% plan to demolish and rebuild. Thirteen percent plan to buy a new home in the neighborhood and 17% are undecided.

“It seems as though a lot of people have solidified their plans about buying in Lakeview,” said Al Palumbo, branch manager for Latter and Blum.

Palumbo said flood-damaged homes are selling for an average of $150,000 to $170,000. The average stay on the market is 45 days.

Mark Rodi, a real estate broker and owner of a New Orleans Re/Max affiliate, says people are returning to Lakeview because of confidence it will be rebuilt. “The anchors have arrived and are continuing in that market,” he said.

Rodi is referring to places such as Mount Carmel Academy on Robert E. Lee Boulevard, Lakeview Playground near Delgado Community College, and St. Dominic’s Church on Harrison Avenue. Businesses such as Lakeview Harbor restaurant on Harrison Avenue and the Robert Fresh Market on Robert E. Lee plan to return in the fall, Rodi said.

Hot property

Rodi said the hottest areas he has encountered for buyers are between Harrison Avenue and Robert E. Lee Boulevard and between Canal Boulevard and Marconi Avenue. According to Palumbo, the streets just off Canal such as Louisville, Louis XIV, and Vicksburg are also popular.

Rodi and Palumbo say people are looking for a specific type of Lakeview home — less than 10 years old and at least two stories high.

These homes have a higher elevation than many slab homes in Lakeview and most did not take water on the second floor, Palumbo said.

Jarred Trauth, an associate with Jones Walker law firm, bought a home near Fleur de Lis within walking distance of the breach in the 17th Street Canal. Before Katrina, Trauth had a one-story home between Wisner and Elysian Fields. Even before this home received extensive flood damage, Trauth and his wife, Vanessa, a Lakeview native, wanted to move into the neighborhood. After Katrina, “The prices fell down, so we felt it was an opportunity,” said Trauth.

Trauth is renovating the first floor of his new home and will move there within three weeks. They now live with Trauth’s father-in-law in his Lakeview home a few blocks away.

Uncertainties remain

Dr. Gerald Myers, an associate professor at Louisiana State University Medical Center, owns a home south of Harrison Avenue that he has yet to put on the market. His family lives in Hammond now and will rent a home in Metairie in July. He is unsure whether he and his wife and children will return to their Lakeview home. Myers worries about how much flood insurance will cost post-Katrina as well as the psychological effect of living in a damaged area on his young children.

“We’d just like to see if we can recoup land value. But if another hurricane comes through, it may be a moot point,” said Myers.

Diane Schleifstein lived with her husband, Mark, in their Memphis Street home in Lakeview for 21 years. They decided to sell and move to Metairie. Schleifstein said the insurance settlement paid off the mortgage on their Lakeview house and gave them enough to move on. Schleifstein also said she did not feel she had the time and energy needed to rebuild in Lakeview. “Why pay extra for a house in Lakeview you can’t live in for another year and deal with the slowness of what’s going on in Orleans Parish?”

Despite her decision, Schleifstein still believes in Lakeview’s revival. “I know Lakeview will come back and in five years our property will be worth much more but that’s for somebody else to worry about.”

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