Bellaire’s water tower. Photo by R. Bivins
BELLAIRE, Texas – (By Michelle Leigh Smith for Realty News Report) – The City of Bellaire reports 1,936 of its 6,688 homes were flooded during Hurricane Harvey.
For decades, home values have been strong in Bellaire, an independent well-located municipality that’s surrounded by the City of Houston. Over the years, thousands of Post World War II houses have been torn down to make way for million-dollar dwellings. Then, Harvey hit.
Seven months after the storm, Bellaire’s housing market is starting to come into focus again. The resident’s responses are diverse. Some Bellaire residents have left entirely; others are rebuilding, or elevating their homes, or renting or rehabbing.
Moving out — Some residents are electing to get the heck out of Dodge, while others have moved to a high-rise or to climates with no humidity whatsoever. Steve Toms is selling his 3-story fully furnished townhouse in Bellaire and moving to New Mexico.
Carol and Steven White built their home on Wedgewood Street in 1992, designing major renovations through the years. They elected to move to an Inner Loop high-rise just before Harvey made landfall in late August. Now, they watch thunderstorms high-and-dry from 30 floors up.
Rentals – Landlords are demanding and receiving higher rents on temporary, short-term leases. If a house did not flood, it is leased immediately. Across Houston, multifamily occupancy increased quickly after the storm damaged over 200,000 dwellings in Harris County.
Lot Sales – Lot prices have decreased because there is more inventory available not only in Bellaire, but the immediate surrounding neighborhoods of Meyerland and the Braeswood corridor.
“Homes that flooded and are listed as “lot value only” are selling quickly – builders are picking them up,” says Lucie Ogdee of Keller Williams Realty – Metropolitan. She notes that new homes have a median listing price of $795,000 and a price per SF of $282.
“Lot values have gone down, with high supply and relatively less demand unless the price is right,” says Mike Livingston, a Realtor with Keller Williams. “Eleven of the 26 single family homes under contract this week in Bellaire were flooded and are being sold for lot value only. Of the 174 active family listings (about 62 of these were flooded), 28 are new construction which is moving very slowly. Most new houses going up now are custom where the buyer found a lot and hired a builder.”
New Construction – Newly built homes and townhomes in Bellaire are being designed to be elevated above flooding levels. In the first two months of 2018, new home permits in Bellaire approached $11.5 million, compared to $7.8 million in the first quarter of 2017.
“Bellaire is a hotbed of new construction luxury homes,” says Neal Hamil, president of Carnan Properties. “Like so many older Houston enclaves, new construction homes are replacing little cottages. The lots are desirable because of their size and the mature trees.”
Builder Marvin Blum has eight homes under construction – three of which he began before Harvey. “I also have three big remodels underway,” says Blum, of Blum Custom Builders and Remodeling. His website frequently notes “elevated” in the description.
“People who have settled with their insurance companies are reaching out to builders. From September to January, our business was unlike anything we’ve seen before,” says builder Bryan Phillips, President of Cason Graye Homes. For elevation costs, he says, “Depending on the scope of work and how high, the job can cost anywhere from $80,000 to over $200,000.”
Elevating a House: Raise, Don’t Raze – Scores of houses in the flood zones of Bellaire and Houston are being elevated. Existing homes are being raised six feet or more and placed atop concrete piers, similar to beach houses in Galveston.
Houston real estate broker Amy Bernstein of Bernstein Realty said it is amazing to see recently built homes in Bellaire’s Southdale section going through elevation procedures.
Resale – Joseph Avioli, a Realtor with Nan Properties, says “Buyers looking in Bellaire want a home that is move-in ready, zoned to good public schools and hasn’t flooded. Our market is heading into the busiest time of the year, from March to September, and interest rates are going up.”
The Bellaire real estate market was redefined when Hurricane Harvey made landfall on Aug. 25, 2017. The storm parked over Texas for days, dumping 50 inches of rain on Houston area. The complete impact on Bellaire real estate hasn’t been determined yet. There’s not a long track record on Post-Harvey sales to determine the new property values. “Predictions are that homes that didn’t flood increased in value by 6 percent and homes that flooded decreased in value,” says Avioli.
Flooding Remediation – “Water does not know political boundaries,” says Chris Canonico, a principal with the Ardurra Group and member of Bellaire’s Flood Mitigation Task Force. “There’s no magic about having a house in or out of the flood plain because flood-points can change at any point in time, depending on rainfall amounts within an hour. We do believe that when Project Brays is complete, the flooding risk will be significantly decreased.”
According to the numbers presented in City Engineer James Andrews’ Flood Mitigation Report, 72 percent (4,783 homes) of the 6,688 homes in Bellaire had flood insurance. 29 percent (1,936 homes) of Bellaire homes suffered structural flooding during Harvey, and 2 percent were flooded both during Harvey and the Memorial Day 2015 storm. Of the homes flooded during Harvey, 54 percent (1,039) were built prior to 1980.
“The areas with the most structures flooded were located in the southeast quadrant of the City followed by the south-central area of the City. Both areas are near Brays Bayou,” said City Development Services Director ChaVonne Sampson in her March 19 report to Bellaire City Council.
Value in the Dirt – Are any of the owners of old homes repairing their houses or do they just sell them for lot value? “Traditionally, and I’ve heard this from homebuilders even before the flood, the value of these properties is not in the structure, it’s in the land,” says Sampson.
“In the last few years I have seen more Bellaire homes with foundation problems, previous flooding, and/or with a ground floor below the base flood elevation,” says Vicki Chu with Roger Martin Properties. “All these factors can affect a home’s resale value. In addition, the increased flood insurance can be more than $2,000 per year,” says Chu. “Since the Memorial Day flood in 2015 and the Tax Day flood in 2016, I had hoped the city would focus its attention on our flooding and foundation problems. Instead, I was stunned by the decision to replace our logo and water meters. We need to pay attention to the real problems facing homeowners in our city.”
So where can flooded residents turn?
Bellaire homeowner Steve Toms asks what options do local Harvey survivors who lost everything plan to do once FEMA support doesn’t seem to cover rebuilding? “We’re about to list our inner loop condo at a mid-range price,” Toms says. “Many 2000 SF units are listed below $400,000; newer and larger units start at or above $700,000.”
“Prior to Harvey home remodeling happened randomly throughout neighborhoods. After Harvey entire neighborhoods are being remodeled. If you know about a house that has not been remediated, we will go out and check it out,” says Sampson. “You can make repairs to your home as long as the amount of damage to your structure is not more than 50 percent.”
With regard to flood insurance, Sampson, says, “You can still get flood insurance on your home even if you flooded in the past. Contact your insurance agent.”
“Homeowners in the City of Houston can request a repetitive loss letter to facilitate their Increased Cost of Compliance Coverage claims,” says Alanna Reed, Director of Communications, Public Works, City of Houston. Houston Public Work’s Floodplain Management Office (FMO) will evaluate the request, determine if the home is a repetitive loss property and issue a response letter. If the FMO determines that the home is a repetitive loss property, permits for repair are withheld until the home is brought into compliance.”
In the Long Term – The good news is that the City of Bellaire will always be popular for medical professionals because it is convenient to the vast Texas Medical Center. It’s a family-friendly neighborhood with its own police department (being a municipality separate from Houston). Loop 610 cuts through the city.
“Harvey stimulated the market as people needed to move due to the flooding issue. Investors and displaced residents wanted to pick up value priced properties,” says Realtor Jean Shabot, who with her husband Jack Shabot, form the Shabot Team, Berkshire Hathaway Home Services Anderson Properties.
“In the six month period before Harvey, there were 20 percent more sales than we have currently,” says Shabot. “For a period of time during recovery, the real estate market slowed to a crawl, until money began to circulate.”
“In the last six months since Hurricane Harvey there have been a 120 sales in Bellaire” says Shabot. The average price per sq. ft. was $241.10 SF. and average days on market was 89 days. The fact that there was only a 1% drop in Bellaire from pre Harvey prices is indicative of a very, healthy market.
“In the six months leading up to Hurricane Harvey, there were 150 sales in Bellaire with an average price of $251.46 per SF, with an average market time of 92 days,” Shabot says.
“There are still a significant number of homes which have not been repaired for a variety of reasons including whether the home owners will return to their properties. Many homeowners are undecided whether to re-occupy their homes after being repaired. We expect many homes to enter the market for sale or lease, as owners make their decisions.”
April 2, 2018 Realty News Report Copyright 2018