When the Capital Region flooded in mid-August, Douglas James was among its thousands of victims. His Denham Springs home of nearly 20 years took in four feet of water, and he lost three cars.
Now, he and his son, realtor Darren James, are trying to figure out what the 73-year-old should do next. He might rebuild, but at his age, the elder James doesn’t know if it’s worth it—or if he really even wants to. If he sells, he’s not sure whether he would buy again in Livingston Parish or move elsewhere.
As Business Report details in its new cover story, it’s a dilemma many homeowners are facing. More than two months after the area’s historic flood, thousands of flood victims have no idea yet what they’re going to do or where they’re going to go, a situation that is confounding real estate agents as they try to get a handle on where the local market is heading.
Part of the problem is that many people are still waiting on insurance settlements or U.S. Small Business Administration loans. Until they know how much they have to work with they don’t know if they can afford to rebuild. Contributing to the uncertainty is that many are also waiting to find out whether they’ll be required to elevate their homes. Though local parishes are trying to make it as easy as possible for residents to rebuild, it’s a slow process and the unknowns are throwing a wrench into the decision-making calculus.
Not everyone is in a holding pattern, however. Some homeowners are starting to sell, and the number of flood-damaged homes on the market continues to grow. Others are choosing to buy—either for investment purposes or because they can get a really good deal on a property they couldn’t otherwise afford. Activity is all over the map, and the situation is changing by the day.
Karen Rayburn is one of the sellers. She’s helping her 93-year-old grandfather sell his house in the Park Forest subdivision in the northeastern corner of East Baton Rouge Parish. Rayburn grew up in the spacious house—which, at 3,200 square feet, is one of the largest in the neighborhood—and she hates putting it on the market. It has been in the family since 1969.
“It was a hard decision for us to make,” she says. “But it just doesn’t make sense to put all that money into the house to fix it up.”
Ed Broussard is among those buying. Before the flood, he was renting a Denham Springs house that he shared with his wife, three kids and four pets. He wanted to buy something bigger and nicer, but couldn’t afford it. After the flood, however, he found an online ad for a three-bedroom, Acadian-style house with a pool and carport. The 1,400-square-foot house is in a good neighborhood near his kids’ schools. Its pre-flood value was more than $200,000. The post-flood asking price was $105,000. Broussard estimates it will cost about $50,000 to repair it. He expects to close on the home and begin construction before the end of the year, and move in sometime early next year.
“It’s a great deal,” he says. “I’m getting a $200,000 home for $150,000.”
Meanwhile, in neighborhoods that stayed dry, it’s almost as if the deluge never happened. In places like Bocage, the Garden District or Willow Grove, to name just a few, the market is virtually unaffected. There hasn’t been an influx of buyers looking to relocate to those older or higher end neighborhoods in south Baton Rouge. There hasn’t been any evidence of price gouging, either.
As a result, some observers are optimistic that the effects of the flood on the local real estate market may not be as bad in the long run as initially feared. For now, though, they’re still holding their breath.
“People are still waiting on concrete numbers on which to base their life,” James says. “Until we know, it’s hard to say what’s going to happen.”
Read the full cover story, which includes additional stories on how area property assessors are working to complete post-flood reassessments, and how red tape and payment delays are leaving many flood victims in a holding pattern.
