When Hurricane Harvey hit Houston, upwards of 100,00 homes flooded; however, despite suffering catastrophic damage, the Houston real estate market bounced back quickly. According to data collected by the Houston Association of Realtors, predicted setbacks were shorter than expected, and home sales rebounded only four weeks after the widespread devastation.
The housing market finished strong through the end of 2017, but how will it behave moving forward? Our 2018 Houston real estate forecast reinforces the ongoing upwards trend:
A State of Rebuilding
Many homeowners are still recovering from Harvey’s destructive reach, currently in the process of repairing or, in some cases, rebuilding their property. It’s projected that once completed, these newly repaired houses will be placed back on the market in spring just before prime buying season begins in summer, ensuring the probability of profit. However, be aware that such an overwhelming demand for repairs results in limited supply of both materials and workers. This could result in a decline of quality due to purchasing more readily available materials of lower quality as well as hiring overwhelmed workers with limited availability.
A Strong Seller’s Market
The Houston housing market continues to perform above expectations despite stigma associated with weather-damaged areas. In their annual market comparison, HAR reports that single-family home sales, total property sales, dollar volume, and medium pricing increased in December 2017 compared to 2016. Single-family homes inventory has also decreased, shrinking from 3.4 to 3.2. This limited supply of houses paired with a high demand predicts Houston will remain a seller’s market in 2018. Sellers will have the ability to demand a higher sale price, refuse concessions such as seller-paid inspections, and choose the most profitable outcome from multiple offers.
A Prime Investing Opportunity
Investors who fix and flip houses may discover financial opportunities in this post-Harvey market. Some homeowners will find it is unfortunately far too costly or labor-intensive to fix their damaged property, so they may decide to sell their home to an investor instead of rebuilding. Since the population of Houston continues to grow, fixing and flipping houses – both damaged or untouched by Harvey – on a seller’s market can yield profitable results. And any stigma associated with purchasing a previously flooded home is most likely to dissipate within 12 – 18 months.
For more information about investment opportunities in Houston’s 2018 real estate market, please contact Noble Mortgage today.