Many of the homes in Belleau Wood are built on stilts with the living space directly above the garage, which usually insulates residents from replacing Sheetrock, carpet and furniture after every heavy rain, said Arianda Hicks, a seven-year resident and the Belleau Wood Civic Club treasurer.
However, when Hurricane Harvey barreled through the region in late August, flooding all but four houses in the 40-home community, it changed the equation, she said.
“I’ve seen a lot of articles where people say, ‘We’ve flooded three times in three years,’” Hicks said. “Well, we’ve flooded three times in one year.”
After several bouts with flooding, the homeowners of Belleau Wood and many residents in the Lake Houston area are paying attention to how Harvey could affect the real estate market as they determine if they will pursue a buyout, rebuild their home to stay long term or put it up for sale.
The storm’s effect on Lake Houston area real estate was unprecedented, said Anne Vickery, owner of Anne Vickery and Associates Realty. The company owns several commercial and residential tracts in the Lake Houston area.
“I don’t think that [Tropical Storm] Allison or [Hurricane] Ike could give us a barometer on what’s happening today,” Vickery said. “Ike was bad, but this was worse.”
Following home values
Floodwaters from Harvey caused more damage to residential homes than any other property type in the Greater Houston area, experts said. Nearly 5 percent of homes in the area flooded, according to the Texas Department of Public Safety.
Real estate agents said it is tough to project how the real estate market will be affected long term. In August, home sales across the Greater Houston area dropped 25 percent, the first decline in 12 month sales in a year, according to the Houston Association of Realtors.
Apartments could see greater occupancy rates as residents search for temporary shelter, and demand for homes in the area that did not flood are expected to increase, analysts said.
“If your home didn’t get flooded, it may be worth a little bit more because it made it through Harvey,” said Mike Dishberger, owner of Sandcastle Homes and former president of the Greater Houston Builders Association. “The feeling is if you make it through Harvey, you’ll make it through any storm.”
Local Realtor Amy Lippincott of The Lippincott Team said those whose homes flooded should expect a slight decrease in home value, and those who have flooded more than once could have more trouble selling.
However, she said potential homeowners generally understand events like Harvey are not going to be typical. At least two of her clients are moving forward selling homes that have flooded twice with no price reduction, she said.
“I think people will need to decide if they’re going to sell as is or if they’re going to sell and rebuild again,” Lippincott said.
Lawrence Dean, regional director of Metrostudy Houston, a housing market research group, said housing prices overall have not decreased after Harvey, but they also have not significantly increased. He said the biggest effect on homebuilding will be increased competition for materials—such as drywall, plumbing, drains, roofing and insulation—as homes are being renovated simultaneously.
The increased wait for contractors and materials could cause more families to move as they search for normalcy, Vickery said.
“What we’re seeing now is construction is not going to take six to eight weeks—the construction could take three to four months just because there’s so much construction underway,” she said.
Local effects
Total home sales declined in Humble, Kingwood, Summerwood and Atascocita in August. Fall Creek was the only portion of the Lake Houston area to see 12 month home sales grow in August, according to HAR data.
Several Kingwood neighborhoods, such as Kingwood Greens Village, Barrington and Fosters Mill, received water damage in more than 80 percent of the homes, Houston City Council Member Dave Martin said. Humble and Atascocita neighborhoods, such as Summerwood, Atascocita Shores and Northshire also experienced extensive flooding.
In the short term, buyers have not shied away from heavily affected areas, like Kingwood, Vickery said.
“People are looking at individual homes, not the area per se,” she said. “They’re not shying away because there are a lot of homes in Kingwood that did not flood.”
Despite major flooding, Dishberger said he expects Lake Houston area homes to retain some of their value and residents to remain in the area.
“If you live in Kingwood, you like living in that part of the city,” he said. “So those people in Kingwood are possibly looking for other homes in Kingwood.”
Demand for multifamily increases
Robert Kramp, director of research and analysis for CBRE, said displaced renters and residents seeking temporary housing spiked dramatically with about 6,000 Houston-area units being leased in the weeks following Harvey. As a result, Kramp said the number of apartments that have been leased is about 18 months ahead of expectations.
“A new segment of permanent renters could emerge out of the storm,” he said. “For example, older homeowners contemplating apartment living now have an additional motivation to shift from owning to renting.”
Based on preliminary damage reports, the multifamily submarkets most severely affected are in Northeast Houston, which lost about 5 percent of its total inventory. About 732 apartments were damaged in the Lake Houston area, Apartment Data Services President Bruce McClenny said.
McClenny said rents typically increase between 6 and 7 percent in the region after natural disasters.
Multifamily complex the Bala Woods Apartments, which is located on Loop 494 just south of Northpark Drive, saw this trend firsthand.
“We were actually 100 percent occupied [after Harvey],” said Bala Woods office manager Jennifer Pierron. “A lot of folks are still waiting for their homes to be finished.”
