Houston struggles to get back on its feet after being assaulted all last week by Hurricane Harvey, and though the worst of the storm has passed, the recovery will be long and hard. One of the most heavily impacted areas of the city is the real estate market, which was shaken quite significantly by the tropical storm.
Houston area realtor Shad Bogany is just one of the many realtors that have seen a loss of income, having had five closings scheduled for the week of August 28. However, after Hurricane Harvey deposited 51 inches of rain, all of those closings were put on hold. Bogany expects a few of those deals will never happen.
“A lot of Realtors are probably having a loss of income,” Bogany said. “Imagine you had a bunch of listings in a certain neighborhood that flooded — you’ve lost all of that.”
First time home buyers, who account for nearly a third (32%) of those looking to get a home will find themselves short on options in Houston, as will many other potential homeowners. Harvey brought the city’s normally robust real estate market to a halt, with the majority of people looking for rentals, not permanent housing.
“For the last week or so it has really ground to a halt,” said Real Estate Broker Andy Taylor. “Other than rentals, which are on fire, the sales market is slow.”
Before the storm, Houston had one of the healthiest markets for real estate in the country, according to the National Association of Realtors. Hurricane Harvey, according to the Federal Emergency Mangement Agency, wiped out almost 800 homes in Harris County and damaged more than 119,000.
“The devastation caused by the hurricane and flooding could be enormous, and this will certainly have a negative impact on local housing markets in the short term as the focus shifts to recovery and residents get back on their feet,” Lawrence Yun, chief economist for the National Association of Realtors, said last week, adding that “it’s too early to say what the long-term consequences will be to the area housing market and economy.”
The rental market is expected to tighten immensely as displaced households and aid workers seek lodging. And once the homes that were immediately impacted by the storm are evaluated and condemned to be damaged beyond repair, it is believed that the oversupply of housing that existed before the storm will diminish greatly.
Economists believe that, with time, the markets could recover, but a great many homes will have to be torn down and replaced. Hopefully, Houston and similarly impacted areas can return to pre-Harvey market levels.