What’s the risk? How flooding impacts home sales in Houston’s booming real estate market
After Harvey and subsequent rainstorms caused massive damage, many of the homeowners in the flooded areas of Houston thought they would find it difficult to sell their property even after it was renovated.
However, many of the subdivisions, such as Kingwood, Meyerland, and near Brays Bayou communities, have not been excluded from Houston’s booming real estate market, said Deborah Rose Miller, a broker and agent at Rose Realty LLC., Which has strong ties in north Houston.
The combination of a strong sellers’ market and the promise of flood protection projects has resulted in a “feeding frenzy” in the real estate market in the Lake Houston area, according to Miller. Miller hasn’t seen such high demand since North Houston moved to ExxonMobil’s 385-acre campus along the then-soon-to-be-developed Grand Parkway this spring.
For example, a home that was flooded during Harvey in the Kingwood subdivision of King’s Forest was recently sold in less than 11 days, albeit at a discount of $ 30,000 to $ 615,000. The same house was on the market for four months in 2019 as owners tried to find the right price, Miller said. The homeowners turned it into a rental property in July 2019 instead of leaving it standing.
“The houses I had … and the people I know who struggled to get their houses up for sale a few years ago – and some of them even leased them because they just thought it was better right now than nothing – she could sell her house now, “Miller said.
The real estate market is growing at a historic pace, according to the Houston Association of Realtors. April saw the largest increase in sales volume by one month over the previous year and is the 11th positive sales month in a row according to a market update published by HAR on May 12th. In April, single-family homes were sold with 9,105 units sold, up 47.4 percent from 6,175 in the previous year.
The seller’s market was fueled by a shortage of inventory and a rapidly growing population, said Bill Baldwin, a realtor at Boulevard Realty based in The Heights. Texas again led the nation in raw population growth, according to census data released May 4th.
“It’s a complete lack of supply and an increase in demand,” Baldwin said. “… Consumers definitely need to look at options that they would not normally consider as there are limited options. Of course you have to do with time. “
The time, or just over three years, since Hurricane Harvey in August 2017 and nearly two years since tropical storm Imelda flooded the neighborhoods of Kingwood again, is part of why flooding has not been so despite preparations for the upcoming hurricane season pose high risk from June 1st.
Baldwin teaches a course on flooding for real estate agents and says it is important that both brokers and prospective buyers are made aware of the risks associated with potential flooding.
With some moving to Houston with no idea of the flood risk, it is up to property sellers to provide real estate agents with the information they need to make an informed decision from the buyer.
“As long as the consumer is educated, some flooded homes may never flood again. Some houses that have never been flooded may flood tomorrow, ”said Baldwin. “… The challenge in our industry is to make sure that people are well trained. There is a risk in driving your car today, OK, and we’ll take that risk and move on with it. As long as people are educated, they certainly need to consider houses that they normally would not have considered due to the lack of inventory. “
The commercial market also controls the challenges of previously flooded properties.
Kenneth Katz, principal of Upper Kirby-based commercial real estate company Baker Katz, said there was flooding information available to buyers, but commercial tenants and retailers alike think little about whether a building they inhabit has been flooded before.
The 2017 disaster didn’t leave a long-term impact on the marketability of these locations, but it does have long-term implications for buyers due to technical requirements, Katz said.
In addition to concerns about the physical risk, Katz said a hurricane would be much easier to fight than the year-long pandemic the country faced and retailers struggled through.
“Last year around this time it was a real mess when landlords and tenants worked together to understand how to navigate this time, especially when it came to rent deferrals or reductions,” said Katz. “… Well, if you look at a good number of leases that are currently being negotiated, a large percentage of those leases contain pandemic-related provisions.”