Hurricane Harvey’s torrential rains and fast-rising floodwaters dealt a heavy blow to a real estate market that was on track to set new records, according to August data from the Houston Association of Realtors (HAR).
“Home sales were humming throughout the first three weeks of August, but the moment Harvey struck the region, everything came to a screeching halt,” said HAR chair Cindy Hamann.
HAR’s latest monthly report shows that all segments of the Houston housing market felt the strain.
August sales of property types across the board totaled 7,077, a 24 percent decline compared to the same month last year, while total dollar volume dropped 22 percent to $2.0 billion. After 10 consecutive months of gains, single-family home sales took a 25 percent year-over-year hit.
Inventory grew from a four month’s supply to 4.4 months. Active listings, or the total number of available properties, increased 12 percent over August 2016 to 42,822.
Ryan Bokros, managing partner at a brokerage with 550 agents spread over the Houston metro, brought in around 60 new listings in the last seven days. But as undamaged and repaired homes continue to get snapped up by those in need of housing, supply is expected to shrink again.
Home prices may be slower in their reaction to Harvey; in August, Houston’s single-family median home price rose 3 percent to $231,700. Leases of single-family homes in August rose 9.4 percent, the average rent unchanged at $1,857, as homeowners sought dry, temporary accommodations.
Bokros of JLA Realty Houston is cautious about expecting any home price increases or decreases in the coming months.
In the upmarket suburb of the Woodlands, there’s talk of dry homes — unaffected by the flooding — surging in price, he said. But he thinks there’s a caveat: Many of them fall in the $400,000 range and are therefore out of reach for many buyers and those who could afford a new home at that price in most cases also have the finances to stay put and renovate.
Providing a micro glimpse into the market, Houston Realtor Nicole Lopez shared the drastic drop in online views she’s seen to her active and pending listings that were spared from flooding. The below data captures are based on traffic she tracks from HAR, Zillow, realtor.com and the like:
“The numbers don’t lie,” she commented on a post in Inman Coast to Coast.
According to Bokros, flooded homeowners in the median price zone are going to be more likely to offload to FEMA or investors and be searching for new housing, which could put extra stain on affordable inventory and perhaps boost prices there.
Another question on Bokros mind: How might Harvey impact the psyche of real estate consumers in Houston long-term? Will flood-weary owners be eager to get back into a first-story home?
“It’ll be interesting to see the outcome of this and folks living in apartments enjoying apartment life,” Bokros said. “They know being on the fifth or sixth floor in an apartment building, they will never flood again, and they may buy their own apartments in time.”