The expected increase in the number of single family foreclosures is not the only factor threatening the economy of Louisiana and its residents. According to local economists, the closure of the Northrop Grumman Corp. shipyard will also take its toll on the state's economic condition.
Several areas of the state are facing a new foreclosure wave. New Orleans bank owned homes reportedly increased during the first half of 2010, causing the housing market to be clogged by foreclosed properties and houses being sold below their true market value. Reports also showed that during the second quarter, almost 5,000 households in the whole state received notices of foreclosures.
These notices include initial default notices, repossession notices and sale notices. The documents are expected to increase the number of foreclosed properties and bank owned homes in Louisiana in the coming months, with the second quarter foreclosure rate already 24.5% higher than the previous quarter and almost 50% higher than the second quarter of 2009.
Meanwhile, the projected rise in the number of single family foreclosures and other foreclosed properties is not the only problem that the Louisiana economy had to deal with. Defense contractor Northrop Grumman Corp. has announced that it will close its shipyard in Avondale in 2013 as part of its plan to consolidate its shipbuilding units.
On top of the problem of expanding foreclosed houses listings, the state will also need to cope with significant job losses should Northrop's plan came to fruition. According to economists, thousands of jobs will be lost should the military shipbuilder push through with its plan of moving its shipbuilding operations to Mississippi.
The Avondale shipyard employs around 5,000 workers, with most of them native residents of Louisiana. The company is also planning to pull out its support operations at Waggaman and Tallulah which employ around 150 workers. Economists believe that the impact on the state's economy will be felt for a long time and that it will be almost impossible to find another company or investment that can provide the same employment and business benefits that Northrop does.
With the planned relocation of Northrop and the projected rise in the number of single family foreclosures expected to impact the state's economy, Louisiana has now started to explore ways that can mitigate these expected effects.
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