Welcome to your fourth quarter Real Estate Rundown on Texas Business Radio. I’m Shannon Register, the broker and owner of Register Real Estate Advisors and a regular contributor here on the show. As a realtor in Houston, Hurricane Harvey has played an unprecedented role in changing our market, so this quarter I’m focusing on what’s happening in Houston. We still don’t know the full impact it’s going to have but we know some people are walking away from homes, leaving them in foreclosure, some are restoring and getting ready to sell, while others will be purchased by FEMA. The emotional toll the flooding has taken on business owners and homeowners has been significant and they will have a long way to go in their recovery efforts.
Just this week the mayor rescinded his plea for a temporary increase to the city of Houston’s property tax because $50 million in funds have been made available to the city. Many have asked, “why do we have a rainy day fund if we can’t use it when we need it after hurricane?” This is going to be a legislative call that will need to be addressed in the next legislative session. More than 170,000 single family homes were damaged during Hurricane Harvey 35,000 were in the city of Houston and between 9,000 to 13,000 homes were completely destroyed. Ten to 15 percent of employers were impacted by the hurricane and flooding. Others couldn’t get to work. About half of all buildings damaged were not in flood zones. Estimates run between 60 to $190 billion. That’s quite a spread.
470 apartment complexes in Houston were damaged. We don’t know how many units were destroyed but estimates run over a hundred thousand.
Ten percent of Houston’s housing is damaged but that’s based on insurance claims and some people didn’t make claims because an unnamed storm the deductible skyrockets. So if their cost to repair was lower than the deductible then they were not included in those numbers. So those are likely just the flooded homes that are being counted as 10 percent of Houston’s housing damage. If you got water in your garage or in one room, you may not be counted in that. The average age of homes affected are 30 to 40 years old. So it’s mainly older homes. If you’re currently looking for housing in the Houston market realtors and now have a place in the MLS where they can indicate whether the home was flooded or not during the hurricane.
Nationally we have a temporary stay on the National Flood Insurance Program through December. Obviously remodeling projects have exploded in Houston and new home construction may surge with much higher cost.
Construction costs are increasing statewide. Apartments are at max capacity in H-town. We don’t know for certain, but I can only assume that home prices will fall in hard hit areas and flood prone areas. While home prices are predicted to increase in n on-flood prone areas and for homes that were not impacted by the storm. We anticipate flood and property insurance is probably going to increase. Houston’s population continues to increase. But, will we see a shift in this since we’ve had so many floods in recent years? Overall homeownership is on the decline. Even in Fort Bend. Harris County homeownership overall is on the decline.
There are fewer single family homes being built in Harris County. Demographically the number of childless households are increasing. Wages are not going up while housing costs are going up which is leading us into an affordability problem for housing. People who qualify for 150 to $200000 home work downtown in a double income family usually so you have fewer home buyers. Those houses they can afford are only built in the suburbs. The cost of cars keeps increasing and the commute is treacherous. People can barely afford this. Single family home purchases are being pushed out of Harris County. Starter homes are just stretching beyond the reach of median wage families as there is an increasing geographical mismatch between jobs and housing, leading to worse commutes. I’m Shannon Register and that’s your fourth quarter real estate rundown Texas Business Radio.
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A native of Columbus, Georgia, and a graduate of the University of Georgia, Shannon is the Broker / Owner of Register Real Estate Advisors. She holds over nine real estate Certifications and Designations. Shannon is the host of "Houston Real Estate Radio" on NewsRadio 740 KTRH in Houston. You can learn more about Shannon HERE.