Real estate is considered essential, but Keller Williams Broker Associate Callee Maglothin says business has slowed down. “The coronavirus, a lot of what I’m
How will the effects of Hurricane Harvey impact the Houston real estate market?
A few thoughts. I live in Houston.
There is a short term/long term effect. People will nest for 90-120 days and then they will decide to either rebuild or buy.
Short Term Effect
Literally overnight the apartment market went from an “Over Supply to a “No Availability” and the same for the rental home market. This will last for 6-12 months.
Houston Association of Realtors has already added 2 new fields to the Multiple Listing Service.
Homes that flooded during Harvey-yes or no
Property that flooded during Harvey-yes or no
Appreciation of homes that did not flood. If the home did not flood, in the next 45-90 days the value will increase 15-20%. This is the first question a buyer is going to ask…”How high did the water come”. These homes are now a high commodity especially if they are in a great school district. Many of the areas that did flood had great schools
Other factors that will contribute to increased values of homes
1.) Because we have had $30-40 oil, spec building has been very limited so we have less inventory than usual.
2.) Oil companies will start hiring-oil prices will go up. An increase in Houston’s in-migration. This will increase the group of buyers that are ex-pats being transferred to Houston. This group will only buy homes that did not flood.
The bad news of Hurricane Harvey
1.) Residential lot prices will go down for 9-15 months-many people are going to take the insurance money and not rebuild. For those that want to build this will be good news because the inventory of A+ lots has been slim and prices will a bit lower.
2.) Wages will increase in the low wage area. There is going to be a shortage of construction workers. Building cost and remodeling cost will go up significantly.
3.). Flood insurance is going to sky rocket! Homes that were not required to buy it, will now be required or owners will want to buy it. The cost will now be a consideration when buying a home.
Conclusion: The best/biggest opportunity is going to be buying homes were the people had no flood insurance and cannot afford to repair them. Savvy investors will come in and buy these homes, remediate them, lease them for a few years and then sell them. This is not for the investor that watches the late-night infomercial on how to flip house, but for the flipper that this is not his first rodeo!
Short term (1-3 years)-Buyers will want homes that did not flood
Long term (4+ years) the flood will be a faded memory and people will think it can never happen to them.
It reminds me of the stock market!