Houston Real Estate Market Forecast 2018
Homes sales normally recede as late summer and fall approach but the devastation of Hurricane Harvey plunged the Houston Real Estate market in 2017 much deeper than normal.
2017 was a year of big weather events including the California wildfires and the Miami Florida Keys Hurricanes.
Harvey reportedly flooded about 114,000 homes totalling $29 billion in real estate. That is 6.7% of the local market, and may have affected as much as 14.2% of the housing stock in the Houston area, according to Ralph McLaughlin, chief economist at Trulia.com.
Fortunately, the worst is over and the Greater Houston Area is recovering fast and the forecast for 2018 is positive for more growth (estimated 2.8%).
It can take months to a year to recover from the damage typical in hurricane and flood ravaged areas. Houston seems to be very resilient.
In fact, Houston is one of the healthiest housing markets in the US now, with damaged homes coming back on the market and all housing related personnel and resources back in action. The average price for a detached house rose 2.7 % to $285,858 which is a new record for the month of October.
October sales of all property types in Houston totaled 7,614, an increase of 6.6% more than October 2016. Total dollar volume climbed 10.8 % to $2.1 billion.
Houston Not Like Other Housing Markets
What’s unusual about the Houston housing market is how low priced homes have not sold well, yet high priced homes $750,000 are in demand. That contrasts with New York, Miami, Los Angeles, San Francisco Bay Area, and Boston and the housing market in Florida 2018 where high priced homes have waned. In fact, luxury homes have dropped in Calgary, Toronto and Vancouver up in Canada as well.
Hurricane Harvey has stimulated the construction and home rehabiliation sectors and has generated heightened demand for leased properties and property management companies in the Houston area. The Hurricane flooded homes and displaced thousands of home owners and renters.
Cindy Hamann HAR Chair Person describes the Houston market
Demand for lease properties in Houston stayed strong in October. Single-family home leases rose 13.6% while townhome/condominium leases rocketed 34.8%. The average rent for single-family homes rose 2.8% to $1,776 while the average rent for townhomes/condominiums increased 2.9% to $1,533.
Houston’s market rebounded in September and it’s continued into October
In Woodlands TX, the recovery continues as well. Enjoy this infographic report from communityimpact.com about the Woodlands market in November.
What’s the Forecast for the Houston Housing Market for 2018 and beyond?
A bloomberg reports says it well: “Far from declining, prices and rents are expected to rise given the sudden housing shortage. Out-of-state investors have even started to swoop in to acquire damaged homes to repair and sell or rent.” “It’s one of the few cities that’s been fast-growing and relatively affordable. That’s going to change now,” said Nela Richardson, chief economist for Redfin.
The new economics of Houston will take hold. Research reveals that hurricanes typically raise home values for 3 to 4 years, so there’s no reason to expect any change. In addition, Houston has been home to immense sprawl creating very cheap housing but that access to cheap land may change.
Pre Harvey forecasts were of growth, and post-Harvey, Houston may have one of the strongest markets going into 2018 and 2019.
The Houston-The Woodlands-Sugar Land metro area reportedly created 43,200 jobs in October, according to the Texas Workforce Commission – the largest singlemonth job gain on record. This job and economic strength will drive home sales and draw in more workers from other states and cities.
With the price of oil rising slightly, the Houston economy looks poised to excel in 2018. Rents andhome prices will rise. And if billions were knocked off Houston property values, that’s about to get recovered in 2018. The situation might well be the same for Los Angeles real estate as the fires go out and rebuilding begins in LA County.
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