The After-Effects of Hurricane Katrina
One of the reasons I love real estate, is that besides the basic fundamentals that are powering this housing boom, there are always variables that come into play that can never be anticipated. Hurricane Katrina is a great example of one of these variables.
The basic fundamentals that have been causing home prices to surge continue to be: Low Inventory, High Demand, Weak Dollar (brings in outside investment, particularly from Europe), Tax Benefits of Owning, Continued Weak Confidence in Stock Market, & Historically Low Interest Rate Environment.
Now that Hurricane Katrina has devasted much of the Gulf Coast region surrounding the city of New Orleans, Im hearing estimates upward of 200,000 families that have lost their homes and are now displaced. This is a staggering figure, which will result in Hurricane Katrina being one of the most costliest natural disasters to hit the USA in the past century. While the army corps of engineers works around the clock to rid the area of bacteria infested flood waters, which is no easy task by the way, the cities affected are beginning to realize the complete devastation that has occurred. I ask you:
Where are these 200,000+ people going to live now?