After Harvey and subsequent rain storms caused massive damages, many of the homeowners in flooded Houston area neighborhoods thought they would have a hard time selling their property, even after it was renovated.
However, many of the subdivisions, such as Kingwood, Meyerland and communities near Brays Bayou, haven’t been left out of Houston’s booming real estate market, said Deborah Rose Miller, a broker and agent at Rose Realty LLC., who has deep ties in north Houston.
The combination of a strong seller’s market and the promise of flood mitigation projects has created a “feeding frenzy” in the Lake Houston area real estate market, Miller said. Miller hasn’t seen demand this high since north Houston braced for ExxonMobil’s 385-acre campus along the then-soon-to-be developed Grand Parkway in Spring.
For instance, one home that flooded during Harvey in Kingwood subdivision King’s Forest recently sold in less than 11 days, albeit at a $30,000 price reduction to $615,000. The same home sat on the market for four months in 2019 as the owners tried to find the right price point, Miller said. The homeowners turned it into a rental property in July 2019 rather than let it sit.
“The houses I’ve had… and the individuals I know that were struggling a couple of years ago trying to get their homes to sell — and some of them even leased them because they just figured it was better than nothing at the moment — they’ve been able to sell their house now,” Miller said.
The real estate market is growing at a historic pace, according to the Houston Association of Realtors. April featured the largest one-month year-over-year sales volume increase of all time and is the market’s 11th consecutive positive month of sales, according to a market update released by HAR on May 12. In April, single-family homes sales were up 47.4 percent 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 with Boulevard Realty, which is based in The Heights. Texas again led the nation in raw population growth, according to Census data released on May 4.
“It’s a total lack of supply and an increase of demand,” Baldwin said. “…Consumers definitely are having to look at options they would not normally consider because there are limited options. Of course, you’ve got that parlayed with time.”
Time, or just over three years since Hurricane Harvey hit in August 2017 and nearly two years since Tropical Storm Imelda flooded Kingwood neighborhoods yet again, is part of the reason flooding doesn’t seem as high of a risk despite preparations for the upcoming hurricane season starting June 1.
Baldwin teaches a course on flooding for real estate agents and says that it is important that both agents and potential buyers are educated on the risks associated with potential flooding.
As some move to Houston without any idea of flood risk, it is up to those selling properties to provide the information needed to realtors to make an informed decision by the buyer.
“As long as the consumer is well educated, some houses that flooded may never flood again. Some houses that have never flooded may flood tomorrow,” Baldwin said. “…The challenge in our industry is to make sure that people are well educated. There is a risk when you drive your car today, OK, and we assume that risk and move forward with that. So long as people are educated, they certainly are having to consider homes that they would not normally have considered because of the lack of inventory.”
The commercial market is navigating the challenges of formerly flooded properties as well.
Kenneth Katz, a principal with Upper Kirby-based commercial real estate company Baker Katz, said there are disclosures related to flooding for buyers, but little thought is given by commercial renters, such as retailers about whether a building they are occupying flooded previously.
The 2017 disaster has not left long-term effects on the marketability of those locations, but it does have long-term effects to buyers because of technical requirements, Katz said.
In addition to concern over the physical risk, Katz said a hurricane is much easier to come back from than the over-year-long pandemic the country has faced and retailers have struggled through.
“It was a real scramble this time last year as landlords and tenants were working together to try and understand how to work their way through that period of time, specifically as it came to rent deferrals or abatement,” Katz said. “…Well if you look at a good number of leases that are now being negotiated, a large percentage of those leases now have provisions that are related to pandemics.”
Originally Appeared On: https://www.houstonchronicle.com/neighborhood/humble-kingwood/article/What-s-the-risk-How-flooding-impacts-home-16172768.php