Harvey Flooding Unlikely to Depress Houston's Housing Market

Vigorous continued demand for Houston homes left some realtors surprised after the city endured catastrophic flooding. For a lot of new construction, elevated homes may become the norm.
September 15, 2017, 12pm PDT | Philip Rojc | @PhilipRojc
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Houston has long symbolized the Sun Belt's magic brew of abundant housing and plentiful jobs. Annie Correal and Conor Dougherty write, "The Houston metropolitan area grows by about 400 people a day and builds 40,000 housing units a year, making it the nation's largest new-housing market, with 7 percent of residential construction. With light regulation and a civic model tied to growth, it has kept housing prices low by building everywhere and anywhere, and fast."

All of that got thrown into question when Harvey did its damage. But now there seems to be little doubt that Houston's bumper housing market will live on. "But as insurance and government money comes in, developers and real estate agents are betting that the area will quickly clear the backlog and continue along its normal trajectory of adding homes and people."

In the short term, undamaged homes may be at a premium. "At the same time, many economists are forecasting that the price of undamaged homes will rise as demand outstrips supply. Early estimates suggest that tens of thousands of homes were damaged, and developers are worried about labor shortages as repairs get priority over new construction."

As you'd expect, elevated homes fared better in the floods. They may become the new normal as flood insurers make elevation a requirement to head off future storms. 

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Published on Tuesday, September 12, 2017 in The New York Times
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