After the devastating effects of hurricane Harvey you might have thought otherwise, but the Houston property market has stayed well afloat. According to an article in the New York Times, “Houston’s unsinkable housing market is undaunted by the storm”.
The article published in mid-September, just two weeks after Harvey struck the city, reports that the Houston market remains resilient. Estate agents claim that sales are back on track and economists predict that prices for undamaged homes will soar over the next few months.
The US property company Redfin, quoted in the article, expressed their surprise at the Houston property market resilience. Their agents had 45 sales lined up in Houston just before Harvey struck the city. Only 8 buyers pulled out afterwards and one week later, enquiries returned to their usual busy rate.
The Houston Association of Realtors (HAR) points to a drop in sales in the wake of the hurricane. Their report for the market in August finds that “all segments of the housing markets felt the strain”. However, they underline the fact that sales in 2017 have been 1.8% higher overall than 2016, itself a record year.
High demand for Houston homes
According to the New York Times, Houston has one of the most sought-after housing markets in the US. Some 400 people move to the metro area every day and Houston builds 40,000 new units a year. It’s the largest new-home market in the country and accounts for 7% of all residential construction in the US.
One of the big attractions of the Houston property market are its affordable prices. The median price for single family homes in the city (US$231,700) sits well below the national median of US$258,300.
Given its relocation appeal, property supply in Houston perennially runs low. In August, it rose slightly to 4.4 months from 4 months in July. However, HAR expects the level will fall again “as undamaged and repaired homes continue to be snapped up by those in need of housing”.
Elevated homes most sought-after
Hurricane Harvey devastated large parts of Houston, but many areas remained unaffected by the storm. Properties here will be most in demand from buyers. The New York Times reports that no or minimal flood damage has become a unique selling point for home sellers. The article includes photos of houses on the market with large “Did not flood” signs next to the estate agent’s board.
Along with undamaged homes, those with some sort of elevation are also in big demand. Economists predict sharp price hikes for this type of property in Houston.
House prices rise
HAR report that “pricing seemed unaffected by Harvey”. According to their statistics, the median price for single family homes in Houston rose by 3% in August to reach US$231,700. Townhouses and apartments also experienced a price rise of 2% in the year to August.
Rental market booming
Another sector of the Houston property market likely to reap dividends in the aftermath of Harvey are rentals. Demand for long-term rents is expected to be even higher over the next few months.
In August, contracts for long-term rental property in Houston went up all round. HAR reports that leases for single family properties rose by 9.4% in the year while those for townhouses and apartments shot up by 17%.
With strong interest, high demand and rising prices, all things point to the Houston property market as truly “unsinkable”. Even in the face of hurricanes like Harvey.
(source: The New York Times)