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August Home Sales Off 25 Percent as Hurricane Harvey Hits Houston Housing Market

HOUSTON – (By Realty News Report) – Houston home sales declined 25 percent in August as Hurricane Harvey knocked out hundreds of deals at the end of the month.

The Houston Association of Realtors reported 5,917 single-family homes were sold in August, down from 7,927 homes sold in August 2016.

“Home sales were humming throughout the first three weeks of August, but the moment Harvey struck the region, everything came to a screeching halt,” says Cindy Hamann, chair of HAR.

When a hurricane enters the Gulf of Mexico, insurance companies restrict the initiation of new policies for homeowners and this delays many closings. Homes that were slated for closing have to be re-inspected for flood damage. And many would-be deals collapsed after flood waters entered the homes.

“Hurricane Harvey dealt a severe blow to the Houston area and Texas Gulf coast and it will probably be several weeks until we can gauge the storm’s full impact on our housing market,” Hamann says.

Houston’s housing market had been moving at a record-pace in 2017, running at about 8 percent above last year’s sales. Even with the Harvey devastation, year-to-date home sales are still running 1.8 percent ahead of last year’s pace. So it is still possible for 2017 to be the strongest year ever for home sales.

Construction labor will be in high demand as thousands of homes are in need of repair, remodeling or demolition. Home builders will face the pressure of the labor shortage. But builders with an inventory of completed homes are expected to see a quick uptick.

Rental housing is strong. Single-family home leases jumped 9.4 percent while townhome/condominium leases shot up 17.0 percent, HAR reports.

The storm has given a boost to apartment owners.

“I have spoken with a developer whose 90 percent occupied Class A multifamily property in Katy, jumped to 100 percent occupancy overnight,” says Teresa Guidotti Lowery, Senior Managing Director, Multifamily at Houston Colliers International. “The process of rebuilding could take 12 to 18 months.  The timing will be closely tied to the builder’s ability to have ample construction workers and materials.  During this period of time, displaced residents will remain a part of the Houston rental community.”

Sept. 14, 2017 Realty News Report Copyright 2017

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