I updated to OS X version 10.9 and now my applications in the applications folder are gone

When I click Finder-->katelynsmith(with the little house icon; under favorites)-->Applications folder all of the icons for my applications are gone (chess, iPhoto, etc.).  However, when I search for "chess" (or any application names, for that matter), hilight the icon, and click the tiny applications folder on the toolbar on the bottom of the window (see photo attached), all of my applications are there and they still work. 
Why did this happen and how can I get the applications back to the applications folder they used to be in?  Do I need to just copy and paste all of them?
Thank you,
Katelyn

Welcome to Apple Support Communities
There are two Applications folders: /Applications (in the root level of the hard drive) and ~/Applications (in your user folder).
If you have a look at the bottom part of the screenshot, you can see where Chess is stored, and it indicates that it's stored in /Applications, so you are looking for applications in the wrong folder.
Open a Finder window, go to Finder menu (on the menu bar) > Preferences > Sidebar, and mark Applications. Then, close the Preferences window and you will be able to access to the Applications folder in the Finder sidebar. Another option would be to go to View menu (on the menu bar) and type:
/Applications

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