The Houston housing market is surging ahead at record speed, despite the impact of Hurricane Harvey. The Houston Association of Realtors (HAR) said, the Harvey setback was much shorter-lived than anticipated, and the Houston metro recorded its strongest performance ever last year (1).
Hurricane Harvey hit Texas on August 25th, with 130 mile-per-hour winds. It battered communities along the coast, damaging more than 200,000 homes. Almost 1,300 of them were destroyed altogether.
The Balance reports the damage total as $180 billion with $125 billion in federal relief. It was a bad year for natural disasters across the nation, but Hurricane Harvey was the most expensive disaster for 2017.
The severity and the extent of the damage was a big surprise for Houston. The most powerful and destructive hurricanes typically hit the east coast. Harvey also hovered over the Houston area for an unusually long period of time.
But, the devastating effects of the storm didn’t keep the Houston housing market from roaring back to life. Just four weeks after Harvey struck, the “Houston Strong” housing market saw a record rebound in home sales, and that sales momentum has continued right through the end of the year.
Single-Family Sales Record
HAR said single-family home sales rose to a record-breaking 3.5% for all of 2017 compared to a previous record set in 2016. In December, they were up 4.1% for all kinds of homes. Homes priced between $250,000 and $500,000 showed the strongest performance, with a 9.1% increase. Homes worth $100,000 to $149,000 showed the second strongest performance, with a 7.3% increase.
HAR Chair, Kenya Burrell-VanWormer, said, “No one could ever have imagined 2017 turning out to be a record-setting year for the Houston real estate market.” She said, Houston had already “weathered the effect of the energy slump only to have Harvey strike such a devastating blow.”
Post Harvey home sales were not the strongest for the year, however. HAR reported, the best one-month sales figure happened in June, with 8,362 single-family homes sold. The Houston housing market has been picking up where it left off “before” Harvey struck.
Strong Market Before Harvey
The Association said the Houston real estate market was showing signs of strength before Harvey in the midst of an energy sector weakness. It said, job growth continued outside the energy sector, bringing home buyers and renters to Houston from across the nation.
That activity faltered briefly because of Harvey. It also put more pressure on inventory. HAR says the “August rampage interrupted hiring and forced those whose homes and apartments were damaged or destroyed to seek immediate housing anywhere they could, causing inventory to shrink.”
Houston began 2017 with a 3.3-month supply of homes. That grew to a 4.3-month supply right before Harvey made an appearance. The region ended the year with a 3.2-month supply. The national average, according to the National Association of Realtors, is a 3.4-month supply. The average number of days it took to sell a Houston home in December was 62.
Burrell-VanWormer said of Houston right now, “We know that many are still working tirelessly to rebuild their lives after Harvey, but overall, this clearly illustrates the incredible resilience of the people and the economy of Houston, Texas.” She said, “We also know that some neighborhoods are performing better than others, so it’s always advisable to consult a Realtor when thinking about buying or selling a home.”
We’ve invited a highly experienced property manager to give us an update on Houston investment properties at this weekend’s live event. Find out which neighborhoods have the strongest rental demand, highest cash flow and best chance for appreciation. At that event, I will also be giving my yearly housing market predictions, and my co-CEO and husband Rich Fettke will be giving his very popular presentation, “How to Be a Focused and Effective Investor.” Join us this weekend in San Mateo on Saturday, January 20th; in Los Angeles, January 21st, and in San Diego, January 22nd.