"It's no surprise," says Gary Gabriel, executive director of financial services at Cushman & Wakefield. "We view the Katrina storm to be more of humanitarian tragedy than an economic tragedy. It has very localized impact." He agrees that there is the risk of inflation due to government stimulus that will be put in place to rebuilding the Gulf Coast region. "Consumer confidence is down, but once they see region on the mend, the country will get back to doing its business."

The National Association of Realtors says the storm's impact will "cause the economy to grow more slowly than in earlier projections, but the economy will get a lift once rebuilding gets under way." The US gross domestic product is forecast to grow at a pace of 2.3% in the third quarter and 2.7% in the fourth quarter, with GDP for all of 2006 pegged at 3.8%.

"My guess is that any effect on the demand for costal real estate will be short-lived. Jeffrey D. Fisher, professor of finance and real estate and director of the Center for Real Estate Studies at Indiana University's Kelley School of Business, says. "New Orleans residents have been warned for years that their city was vulnerable to severe hurricane-triggered flooding, while coastal Florida residents realize they're sitting ducks during hurricane season. The condo market in Florida has been very hot this past year, despite the damage from hurricanes last summer."