It might seem like Houston’s historic flood would make America’s fourth-largest city a less desirable place to live, but it’s going to get more expensive, real estate experts say.
The supply of homes and apartments is expected to drop sharply with tens of thousands of them flooded and uncertain prospects for the cost of flood insurance that will be required for many homeowners to rebuild.
Following a pattern seen in New Orleans after Hurricane Katrina, that’s likely to drive up home prices and rents in high-and-dry neighborhoods. Displaced buyers and renters will compete for a limited number of properties, said Nela Richardson, chief economist for the real estate brokerage and data firm Redfin.
Before the flooding from Hurricane Harvey, Houston had been a rare, fast-growing U.S. metropolitan area that had retained an affordable housing market, though prices had risen in recent years and held steady through an oil-price crash starting in 2014 in this center of the U.S. energy industry.
Houston’s median home price in July was $230,000, unchanged from a year earlier, and the median value of all off-market homes was substantially less, at $190,000, according to Redfin estimates. That compares with a national median sale price of $293,400.
The experience of New Orleans gives some insight into what may lie ahead for Houston’s market. In the ten years after Hurricane Katrina, average home prices rose to $339,743 in 2015 from $228,620 in the first half of 2005 – an increase of 48 percent, according to an analysis of New Orleans Metropolitan Association of Realtors data by Real Property…Read More