Hurricane Katrina

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Housing market in New Orleans after hurricane Katrina

Table of contents

1. Introduction………………………………………………………………………3

2. Pre-Katrina situation ………………………..…………………………………..4

3. After-Katrina situation…………………………………………………………..6

4. Current situation New Orleans….………………………………………………8

5. Conclusion……………………………………………………………………...…9

6. References…………………………………………………………………….….10

Introduction

It is August 29th of 2005 when the United States of America is badly affected by one of history’s most catastrophic nature disasters. Hurricane Katrina hits the south of New Orleans and causes severe damage to this city. This second biggest hurricane in the entire history of America left 80 percent of New Orleans flooded, approximately 80 billion dollars of damage and more than 1800 killed civilians. Due to this disaster, New Orleans was almost completely destroyed including the residences of thousands of families. Not only were there economic enormous problems but also political questions rose by that time. The president by then, president Bush, came in discredit because of cutting in the federal funding which was protecting New Orleans. Since then a lot of things have actually changed but unfortunately, too late. Complete neighborhoods were removed from the map, people became homeless and moved to different places. The effects on the housing market in New Orleans were immense.

Because of the effect hurricane Katrina had on the housing market in New Orleans, the question which is arising is how the housing market in New Orleans has changed after hurricane Katrina? This paper will first examine the pre-Katrina situation in the housing market. Following on that, the post-Katrina situation. Lastly the current situation will be examined. In the paragraphs the data given will be divided into two different parts of the housing market, the rented houses and actual bought houses. These topics will be supported by a number of graphs to clarify it even more. After these brief expositions there is going to be a conclusion in the end of the paper.

Pre-Katrina situation

Before directly heading to the main part of this paper we have to look back and see what the situation was before Katrina destroyed most of New Orleans. Prior to August 29th 2005 New Orleans was an incredibly diversified city with Hispanics, Asians and Latinos as big cultural subgroups. Perhaps partly because of these diverse civilians New Orleans was not an attractive area fur business to invest their money in. The American business magazine Forbes (2013) has stated this very clearly in one of their reports were it is talking about the economic state of New Orleans before 2005: “Business executives were not even considering Louisiana as an acceptable state to do business, as it had a reputation for being one of the most corrupt states in the country”. New Orleans was in the pre-Katrina situation not even close of being one of the leading economic states of America. However nobody is surprised if it is said that most of New Orleans economy was destroyed by Katrina, it has also turned out to be a new start. As you will see in the upcoming part of the paper New Orleans has undergone major changes since the disaster in 2005. What would happen if nothing had changed? None of us is 100% sure about this question; however the most reasonable reaction is probably that nothing would really change. After 2005 New Orleans made a remarkable comeback which never had been realized without Katrina.

To focus especially on the housing market in New Orleans we could say that it was similar to the general economic state. From 2000 to 2005 there has been a stable annual growth measured, nonetheless nothing to be really shocked about. As you can see in graph 1 after the 2005, when Katrina destroyed New Orleans, the housing market completely collapsed. Not really surprisingly however if you take into account that the estimated damage was over 80 billion....
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