Houston is the 4th biggest American city, accounting for 25% of Texas housing market. Before Harvey, it was a fast-growing area in the United States.
Furthermore, the homes were noticeably affordable even though the costs had increased in recent years but remained the same throughout the 2014 oil crash.
In spite of the catastrophe, Houston’s overall real estate market didn’t waste much time recovering from the resulting devastation. If you’re thinking of investing in real estate, here’s what you need to know about the apartment boom post-Harvey.
Houston’s Real Estate Market Post Harvey
Every segment of the housing market registered sales gains in October apart from homes priced under $150,000. Homes priced from $750,000 and above registered the greatest increase in terms of sales volume.
The condominium and townhome market increased 5.8% with 543 units selling throughout October. Additionally, the rental market increased in October, reinforced by flood-victims seeking temporary housing.
It’s also worth noting that leases for single-family homes increased 13.6% while condominium/townhome leases jumped 34.8%. Interestingly, real estate agents are seeing an increase in buyer interest post-Harvey.
According to reports, neighborhoods with considerable damage are in high demand; this applies to the homes that didn’t flood. Experts also assert that people with flooded homes won’t have a problem selling because several people are already speculating on the market’s recovery.
Houston has about 1.6 million single-family homes and a total housing of 2.45 million units. Beware that the damage suffered so far has affected single-family homes more than commercial properties.
Experts estimate the value of Houston’s property market at $130 billion and the demand for apartments is expected to rise. Furthermore, experts believe the catastrophe will generate a ripple throughout the city’s economy.
According to reports, commercial properties and homes seem to have faced irreparable damage. Therefore, the demand for apartments is expected to increase. Simultaneously, the inventory will decrease because of the storm and this may boost rent.
It’s also worth noting that the comparatively elastic supply curve will mitigate elevated rent growth because of constrained supply.
Rental Market Post Harvey
Before the catastrophe, plenty of luxury units were available at rents of $1,500 and above. However, the market for reasonably priced rentals for working persons was tighter.
While it isn’t clear how much of the rental housing has faced destruction in the region, losing a considerable portion would hike prices fast amid an increase in rental demand. A number of landlords report that most of their empty units attracted demand days after the catastrophe.
Hurricane Harvey will undoubtedly have an enduring effect on the city’s real estate market, in terms of home prices and sales. Furthermore, it will shape how Houstonians think about zoning, building, and infrastructure in the years and months to come.
Reports reveal that real estate investors are looking to benefit from the catastrophe. According to reports, their strategy involves buying flooded properties for a fraction of their worth, repair them, and flip them for a considerable profit.
While the Harvey catastrophe has resulted in far-reaching effects, the city’s real estate market has rebounded fast. Therefore, if you’re thinking of investing in this market, check out this guide.
For information on the Houston real estate market, contact us at Apartment Agents or leave a comment.