Housing Market Hit Record High, Despite Harvey
"In the weeks after Hurricane Harvey, Danielle Bartz began driving the neighborhoods where she had been shopping for a house before the storm hit.
She made notes of the streets had piles of soaked carpets and wet furniture on the curb, crossing them off her list. Bartz, who works in the mayor's office, even asked the city's flood czar to make sure the house she became interested in had stayed dry.
After checking and double-checking, she made an offer in October on a two-bedroom brick cottage in Eastwood. She moved in Christmas day.
Bartz, like thousands of other Houstonians in 2017, contributed to what was a record year for the local housing market.
By New Year's Day, buyers had closed on 79,117 single-family homes across the Houston area, representing $23 billion, and besting the previous year's sales record by 3.5 percent, the Houston Association of Realtors reported Wednesday.
The market saw an unexpectedly strong rebound after the August hurricane, as investors snapped up flooded houses to rent or flip, and buyers like Bartz concentrated their searches in neighborhoods that remained high and dry.
"I would never have thought of looking in Meyerland," said Bartz, who moved to Houston in 2015 and had been living with her brother in his condo in the River Oaks area.
While prices dipped in some neighborhoods last year, values held up overall.
The median price of all the homes that sold in 2017 was up 3.8 percent from the previous year to $229,900.
"No one could ever have imagined 2017 turning out to be a record-setting year for the Houston real estate market, which had weathered the effects of the energy slump only to have Harvey strike such a devastating blow," Kenya Burrell-VanWormer, the realty association's chairwoman, said in a statement.
Considering the size and scope of last year's hurricane, "the housing market, the rental market and the new construction market look relatively healthy," said Ralph McLaughlin, chief economist with real estate listing and data firm Trulia.
Houston's improving economy is bolstering the outlook.
The metropolitan area could add 75,000 jobs this year if oil prices stay above $60 a barrel, recent data from the Federal Reserve Bank of Dallas show.
Yet while many Houstonians have moved on from Harvey, others face daily struggles as they wrangle with insurance companies and worry about their financial futures.
"There's likely to be a spike in foreclosures, especially for those who were uninsured because they didn't think they were in a flood zone," McLaughlin said.
Foreclosure activity is expected to rise to as high as 2,000 property postings each month beginning in the second half of the year, according to Foreclosure Information & Listing Service, a local reporting firm.
The market faces other headwinds.
The supply of available homes, which had begun moving to more sustainable levels earlier this year, has fallen off considerably since Harvey.
Changes in federal tax policy also may have a negative influence on the market.
High-end buyers could shy away from buying million-dollar homes given the new cap on property tax and interest deductions.
Luxury home sales here declined for the second straight month in December, according to the local realty association, which tracks residential property sales throughout primarily Harris, Fort Bend and Montgomery counties. The strongest sales performance took place among homes priced between $250,000 and $500,000.
Single-family sales totaling 6,875 last month were up 4.1 percent over December 2016.
To be sure, Harvey has changed the perspective of potential home buyers.
Trulia conducted a survey at the end of last year that showed natural disasters are causing homeowners and home buyers to rethink where they live.
Given recent hurricanes and wildfires, 39 percent of Americans said they are more concerned about the potential threat of a natural disaster affecting their home, Trulia reported. Concern is highest South, the report said, where 43 percent are more concerned about natural disasters affecting their home.
McLaughlin said Houston may experience a ding in its reputation as a place to relocate and live, but the way the city's residents and leaders handled the storm may counteract any negative perception.
"Houston's response to the natural disaster has been pretty admirable," he said."