Homocon

Real estate specialists said speculators (or what some people call "real estate vultures") purchased so-called "distressed properties" when prices fell for apartments in downtown Manhattan after the 2001 terrorist attacks, or for oceanfront property hit by Hurricane Andrew in Florida in 1992.

"I thought this storm was the end of the city," said Arthur Sterbcow, president of New Orleans-based Latter & Blum, one of the biggest real estate brokerages on the Gulf Coast. "If anyone had told me two weeks ago that I'd be getting the calls and e-mails I'm getting (from those wanting to buy houses and commercial properties), I would have thought he was ready for the psychiatric ward."

It's a seller's market in New Orleans, with calls requesting property running 20 times higher than calls from people who wish to sell their property. There are, of course, complaints from those who think that any type of reorientation of the city of New Orleans would be "gentrification" and are then automatically opposed to speculators coming into the ruined areas, buying property and fixing it up for resale, but many New Orleans homeowners and property owners, especially those who didn't have insurance, see the potential real-estate frenzy as a godsend. And there's even the possibility of eminent domain as a boon for poor homeowners -- "there are already proposals to convert certain flooded areas — including some water-logged neighborhoods — into parks. Under the Supreme Court's recent ruling broadening the definition of eminent domain, speculators could be forced to sell their properties to the government. That would be a great outcome for many homeowners in the parishes south and east of New Orleans that bore the brunt of the storm."

''It's a running joke (that Hurricane) Hugo was the best thing that happened to South Carolina because of all the government money that helped rebuild Charleston," said Ryan Dougherty, noting that after Hugo hit in 1989, historic buildings were rebuilt and/or renovated with insurance and government money.

Even the real estate market in Baton Rouge, 90 miles upriver from New Orleans, has experienced a surge in value after Katrina: "Some properties doubled in price overnight," explains Ben Johnson, sales manager for the commercial real estate division of Latter & Blum's Baton Rouge office. "People were bidding up prices, not even caring about the price. They just had to have a place to live."

Yet the boom in real-estate speculation could very well be the party before the crash: "(T)he more pessimistic feeling among other economists is that the rapid home-price growth over the last eight years is winding down. In July, existing-home sales dropped 2.6%, while new-home prices in June fell to $219,500, from a record $237,300 in February 2005. As of Aug. 26, the Mortgage Bankers Association reported that its index of demand for mortgages used to purchase homes was 470.6, down 11% from the peak of 529.3 in June."

Anybody recall how Internet companies were ridiculously over-valued right before the majority of them went belly-up in the early 2000's . . . yeah, well, so do I.

OFF TOPIC:
Patrick Ruffini has been hosting a monthly poll on potential Republican candidates for the 2008 Presidential election. The poll has been steadily growing in size of respondents, and the more that join in, the more interesting the results. I highly recommend dropping by and participating. Rudy Giuliani has been pulling ahead as each month passes . . .

You can visit the unofficial straw poll here.