The Houston metropolitan area has grown by about 400 people a day, building about 40,000 housing units a year. This has made Houston the nation’s largest new-housing market, with seven percent of the nation’s residential construction. Regulation has been light, the civic model tied to growth. Building everywhere and fast, the city has kept housing prices low.
“You have a country that’s divided between high cost places like Bay Area and New York and higher unemployment areas like Detroit, and places like Houston pick up the slack,” observed Issi Romem, chief economist at BuildZoom, a startup that helps people find contractors, both residential and commercial.
The New York Times reported on September 12 that people in Houston are “betting that nothing can stop Houston’s continued growth”.
“Redfin, a national real estate brokerage firm, said its agents had 45 home buyers lined up to purchase homes here when the storm hit. Only eight buyers backed out because of the storm, and tour requests immediately rebounded a week later.
“‘I was shocked,” said Glenn Kelman, the company’s chief executive, who lives in Seattle.
“For now, buyers and sellers are trying to figure out how prices have changed after the flood. The Powells’ potential buyer and many others are looking for a deal on a damaged home.
“At the same time, many economists are forecasting that the price of undamaged homes will rise as demand outstrips supply. Early estimates suggest that tens of thousands of homes were damaged, and developers are worried about labor shortages as repairs get priority over new construction.”
Then, on September 13, Inman reported that Houston homes sales have declined 24% year-over-year in August.
“Home sales were humming throughout the first three weeks of August, but the moment Harvey struck the region, everything came to a screeching halt,” said HAR (Houston Association of Realtors) chair Cindy Hamann.
“HAR’s latest monthly report shows that all segments of the Houston housing market felt the strain.
“August sales of property types across the board totaled 7,077, a 24 percent decline compared to the same month last year, while total dollar volume dropped 22 percent to $2.0 billion. After 10 consecutive months of gains, single-family home sales took a 25 percent year-over-year hit.”
In August, Business Insider gave some thought to the Houston housing market and vulnerabilities. Houston is a city with 800 miles of creeks and bayous that can easily overflow during a storm surge. It has seen 38,000 acres of wetlands disappear in the last two decades due to a construction boom in greater Houston. The city is flat and drainage systems are outdated. Developers, further, have often not followed the federal wetlands mandate. And building regulations have not accounted for historic flooding levels.
See:
“Houston housing comes to ‘screeching halt’ after Harvey” | Gill South, Inman, 13 September 2017
“Houston’s Unsinkable Housing Market Undaunted by Storm” | Annie Correal and Conor Dougherty, The New York Times, 12 September 2017
“A Storm Forces Houston, the Limitless City, to Consider Its Limits” | Manny Fernandez and Richard Fausset, The New York Times, 30 August 2017
“Houston was a ticking time-bomb for a devastating hurricane like Harvey” | Leanna Garfield, Business Insider, 28 August 2017
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