2 years after Harvey, real estate values gaining ground as Meyerland, Bellaire rebuild

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For longtime West University and Bellaire-area resident and real estate agent Michele Scheffer, the signs of the area’s turnaround since Hurricane Harvey are easy to see.

“The streets are clear; the debris is gone; gardens and yards are coming back to life; kids are riding bikes in the streets again,” Scheffer said. “It’s all coming back.”

Builders and agents said the fundamentals that drive value remain strong despite flood fears, and the area is quickly learning to either better prepare for what can happen during severe rain—or to move out.

“For the most part, after the flooding, those that wanted to move have already moved and have gotten out,” said Shannon Evans, the chairperson of the board of the Houston Association of Realtors. “As a result, you’re seeing new opportunities to buy there.”

An analysis of data from the past two years shows real estate recovery is not yet fully reflected on county appraisal rolls and sales, but the movement of custom homes could mean a new phase of growth for some of the hardest-hit areas. Advocates said as the area grows, policymakers must pay attention to how Brays Bayou rebuilds.

“We’re in good shape and doing well, but the areas that were most affected—we haven’t bounced completely back yet,” Evans said.

Market dynamics

The real estate market has several factors in play post-Harvey across Bellaire, Meyerland and West University: value drops for repaired properties, price premiums for “never-flooded” homes and more lots available for new builds. Each offers distinct advantages when it comes to making a purchase.

“You market the builders and the prices—they’ll be less than one that did not have flooding,” Evans said. “You’re also looking at the quality of work being done. If it is a repair, they should have done everything with mold remediation, taking it down to the studs and floors, and there is documentation of everything they did.”

Cosmetic upgrades are also helping boost the appeal of homes—engineered hardwood floors, granite or quartz countertops, high-end finishes and clean aesthetics, Evans said.

The ZIP codes with the most Harvey-damaged properties in the area—77096 and 77401—are also showing significant gains in median home sales price, with increases of 10% and 5%, respectively, this year over last year, according to data from HAR’s Multiple Listing Service.

However, these homes are taking slightly longer to sell, the data shows, with an average of over 73 days compared to Houston average of around 50 days, and are taking a slight reduction on the price per square foot.

HAR data shows single-family home lots in these two ZIP codes are also attracting higher prices, about 7% more in 2018-19 than in 2017-18, compared to lots in 77005 and 77025, which fell slightly. Some homes that market themselves as “never flooded” or “did not flood,” may also fetch higher prices, but real estate agents advise caution.

“Maybe the home didn’t flood, but it’s very likely the lot did, or the garage did,” Scheffer said.

Empty lots—a sign of post-flooding demolition—have become very attractive to buyers looking for a place to build custom homes in a desirable community, and flood fears can be addressed through the design of the home, said Kevin Frankel, co-president of the Bellaire-based Frankel Building Group.

“They want to be on the right street, away from traffic, in an insulated area, and in a good school zone,” he said. “And we have flood-sensitive design and construction down to a science.”

Rebuilding values

While real estate values drive property tax appraisals, which in turn fund city, school and county budgets, the effect is delayed. Values for the area are lagging on the sales front, but it is possible the area could rebound fully and even show higher-than-expected increases in value as new homes are built, Bellaire officials noted in the city’s 2018 Comprehensive Annual Report.

“If you think about it, for an area like Bellaire, many of those homes would have sat there, with no improvements, for years,” Scheffer said. “It’s a blessing, in a way, that after the devastation, it could come back even stronger.”

The Harris County Appraisal District is readjusting values on formerly damaged properties as well, using pre-Harvey values and increasing them as much as 21% this year—equivalent to two years of 10% increases, which happened to about 20 homeowners in 77401.

However, as a whole, the ZIP code, which comprises the city of Bellaire, still lost about $19.25 million in taxable value directly attributed to Harvey damage among the 387 homes that have since been repaired or demolished as of this year, HCAD data shows. By comparison, nearby ZIP codes 77025 and 77096 had 477 homes either repaired or demolished with less of a value impact—they lost around $9 million in combined value from 2017 to 2019.

The rebuilding of Bellaire and Meyerland is occurring one house at a time, Evans said.

“There could be people still waiting for insurance, grants and that type of thing,” she said. “But there’s a lot of opportunity, a lot of inventory out there. There’s so much available.”

Shifting landscape

In a recent study of the Mid-Brays Bayou region, researcher David Abraham with the Kinder Institute at Rice University wrote that with the anticipated growth of the Brays Bayou watershed, one thing needs to be kept in mind: It might be the most flood-prone bayou in the city of Houston.

“Brays is a bayou with a concrete channel that no longer functions naturally,” Abraham said. “When its concrete, the sheet flow runoff no longer follows a natural path underground … and when the water can’t find the bayou, then you get ponding.”

What that means, Abraham said, is that it is less effective to restrict development and move people away from the bayous in order to clear the flood plain. Even with Project Brays making headway, when it is complete, over 4,500 properties will still be in the 100-year flood plain, he said.

He is working with neighborhood leaders to advocate for community-based solutions that take into account the unique features of Brays, including the need for affordable housing and funding for home elevations.

“We want to see how we can help with targeting the city’s new grants and resources into actual on-the-ground difference,” Abraham said.

Protecting existing property with flood insurance is also important, said Mark Hanna, spokesperson for the Insurance Council of Texas.

“Just because you’re outside a designated flood plain does not mean your house will not flood. Hurricane Harvey was a clear example,” Hanna said.

The cost of owning property in the watershed could also be affected by flood insurance rates, which are under review by the Federal Emergency Management Agency.

Evans said if flood insurance premiums rise significantly, it can cut into the buying power of first-time homeowners.

“If you’re talking $2,000 a year or more on insurance, that reduces how much you can pay each month on a mortgage,” she said.

With gradual turnover of repaired properties, new infrastructure and a better approach to housing, the area can become even more desirable, Abraham said.

“Yes, we need to flood-proof, but there is also a sense of changing the narrative and changing the perception of these areas from being devastated to an area where people want to live,” he said.

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Matt Dulin
Matt joined Community Impact Newspaper in January 2018 and is the City Editor for Houston's Inner Loop editions.
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