Boomtowns

We’re just starting to see the economic and demographic impact of Hurricane Katrina. Over half a million people fled the hurricane and its flooding, some temporarily, others permanently. The result will change the future fortunes of New Orleans, Biloxi, Gulfport along with other towns and cities in the region significantly as the work begins to rebuild these ravaged communities.

Similarly, cities such as Houston and Baton Rouge have seen incredible population increases in a matter of days, and that has pushed the value of real estate through the roof. In a fascinating article on the emergence of overnight boomtowns and demographic shifts following Katrina, MSNBC is reporting that the population of Baton Rouge doubled in the wake of Katrina, pushing real estate values to twice what they were but a week ago. Rents have followed suit.

The BBC has an article on the exodus from southern Louisiana, Mississippi and Alabama to surrounding states. Of interest, as the graphic shows, are the states that have not offered refuge (or virtually none) to the victims of Katrina. With so much finger pointing going around, this is one likely to slip below the radar. And if you are the Governor of Texas, that’s a big problem.

It will be interesting to see how this story develops in the coming days, weeks and years.