What’s the risk? How flooding is affecting home sales in Houston’s booming real estate market


After Harvey and the rainstorms that followed caused massive damage, many homeowners in flooded neighborhoods in the Houston area thought they would have a hard time selling their property, even after it was renovated.

However, many subdivisions, such as Kingwood, Meyerland, and communities near Brays Bayou, have not been left out of Houston’s booming real estate market, said Deborah Rose Miller, broker and agent at Rose Realty LLC., Who maintains close ties. in north Houston.

The combination of a strong seller’s market and the promise of flood mitigation projects has created a “binge eating” in the Lake Houston area real estate market, Miller said. Miller hasn’t seen demand so high since northern Houston prepared for ExxonMobil’s 385-acre campus along the then soon-to-be-developed Grand Parkway in the spring.

For example, a house that was flooded during Harvey on the Kingwood King’s Forest Subdivision recently sold in less than 11 days, but with a price reduction of $ 30,000 to $ 615,000. The same home was on the market for four months in 2019, as owners scrambled to find the right price, Miller said. The owners transformed it into a rental property in July 2019 rather than let it stand.

“The houses I had… and the people I know who struggled a few years ago to try to sell their houses – and some of them even rented them because they thought it was better than nothing yet – they “have been able to sell their house now,” Miller said.

The real estate market is grow at a historic rate, according to the Houston Realtors Association. April saw the largest increase in year-over-year sales volume ever and is the market’s 11th consecutive positive sales month, according to a market update released by HAR on May 12. In April, sales of single-family homes were up 47.4% year-over-year with 9,105 units sold compared to 6,175 a year earlier.

The seller’s market has been fueled by a lack of inventory and a rapidly growing population, said Bill Baldwin, a broker at Boulevard Realty, based in The Heights. Texas once again led the country in gross population growth, according to census data released on May 4.

“It’s a complete lack of supply and an increase in demand,” Baldwin said. “… Consumers should definitely consider options that they would not normally consider, as the options are limited. Of course, you messed it up over time.

The weather, or just over three years since Hurricane Harvey in August 2017 and almost two years since Tropical Storm Imelda once again inundated Kingwood neighborhoods, is part of the reason the flooding does not appear. so risky despite preparations for the next hurricane season. from June 1.

Baldwin teaches a flood course for real estate agents and says it’s important for agents and potential buyers to be educated about the risks associated with potential flooding.

As some move to Houston with no idea of ​​the risk of flooding, it is up to those who sell properties to provide the information needed by realtors to make an informed decision by the buyer.

“As long as the consumer is well educated, some homes that have been flooded may never be flooded again. Some homes that have never been flooded could be flooded tomorrow, ”Baldwin said. “… The challenge in our industry is to make sure people are well educated. There is a risk when you drive your car today, OK, and we take that risk and move forward with that. As long as people are educated, they should definitely consider homes that they would not normally have considered due to lack of inventory. “

The commercial market is also meeting the challenges of once flooded properties.

Kenneth Katz, director of Upper Kirby-based commercial real estate firm Baker Katz, said buyers leaked information related to the flooding, but commercial tenants, such as retailers, were not wondering if a building that they occupied had already been inundated.

The 2017 disaster did not leave long-term effects on the marketability of these sites, but it does have long-term effects on buyers due to technical requirements, Katz said.

In addition to worrying about the physical risk, Katz said a hurricane is much easier to overcome than the year-over-year pandemic the country has faced and retailers have struggled with.

“It was a real rush this time around last year as landlords and tenants worked together to try to figure out how to work their way through this time, especially when it comes to deferring or reducing rents.” Katz said. “… well, if you look at a good number of leases that are currently being negotiated, a large percentage of those leases now have pandemic provisions.”

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