HOUSTON – (Realty News Report) – Houston home sales remained strong in November as the market shrugged off the shock of Hurricane Harvey and recorded the best November in Houston real estate history.
The Houston Association of Realtors reported 6,184 single-family home sales in November, up 7.4 percent over November of 2016.
Despite the hurricane, which damaged over 100,000 homes and shut down sales activity for over a week in late August, the housing market survived the storm and rallied.
Homes are selling at a pace to make 2017 the strongest year ever for home sales. Year-to-date through November, sales are up 3.3 percent over the comparable 11 months of 2016.
“After Harvey, people feared that the market would be silent. It wasn’t silent. The market was very, very busy in November,” said Amy Bernstein of Bernstein Realty.
Thousands of flood victims remain in rental housing, awaiting repairs to existing homes or for their new homes to be constructed. Some homeowners have been selling flood-damaged houses for lot value and moving on with their lives. The flooding has redirected the housing market, as buyers and sellers grapple with the damage and neighborhoods are being redefined.
Many owners are electing to tear down their old homes and build new houses. Others are spending heavily to elevate their homes above today’s flood plain.
Meyerland, a southwest Houston built in the 1950s and 1960s, was a popular neighborhood that existed for decades without widespread flooding. But heavy storms in the last three years were catastrophic in Meyerland and the floods exposed inadequate flood control policies and delayed drainage improvements.
On the west side, neighborhoods near the Addicks and Barker reservoirs were hit by deliberate floodwater releases that kept homes inundated for many days because flood control decision-makers insisted on draining the reservoirs in a rapid fashion.
Mold problems are being remediated. Homes are being repaired, elevated or torn down as the Houston housing market adjusts to post-Harvey reality.
“The landscape for those neighborhoods will change tremendously,” Bernstein said.
As a result of the storm, demand for rental housing has been very strong. Leases activity in townhomes and condos was up 20 percent in November, the Realtors association reported. Single-family leasing was up 7 percent. Apartment leasing surged and many complexes are more than 95 percent leased.
The supply of homes for sale is tight. HAR reports a 3.7-months inventory in November. A 6-months supply is considered a balanced market.
“The key to boosting supply will be restoring salvageable homes to sellable condition and ramping up new construction, both of which we want to see sooner than later,” said HAR Chair Cindy Hamann.
Housing inventory remains tight in many parts of the nation, not just Houston. Increased home building is crucial to solving the supply problem, Lawrence Yun, chief economist of the National Association of Realtors, told a gathering of reporters in Chicago last month at the Realtors annual convention.
In Houston, the constricted inventory has been an issue for the last five years. This places upward pressure on home prices.
Houston’s median single-family home price in November was $225,725. A decade ago, in November 2007, the median price was $148,950. During the economic crash of the 1980s, Houston’s median home price dipped below $60,000.
Affordability is a significant blockade, preventing advancement of home ownership across the nation, Yun said last month.
Since 2011, Yun said, income grew by 15 percent but home prices surged 48 percent.
“Affordability is getting out of hand,” Yun said, adding that more residential product is needed. “We need to get home builders to build more homes.”