Hurricane Harvey did a number on homes across the Houston area. And now it has turned the Houston housing market on its ear. Investors and house-flippers are flooding the region looking to snap up flood-damaged homes on the cheap. In some cases, homes are selling for half of their pre-storm value. "I had a home in Cinco Ranch...this house would have sold before the flood for probably 230 (thousand), and they paid 165 (thousand) for it," says Houston realtor Michael Weaster with Berkshire Hathaway.
Weaster tells KTRH he's seen a rush of eager buyers looking to get their hands on damaged homes as an investment. "I had recommended to a few of the flooded home victims that they put their houses on the market just to see (what they could get), and sure enough they're selling over list price...people are buying them like crazy," he says. "They estimate somewhere between 160 to 180 thousand homes were affected (by the storm), so you're going to be seeing this for months."
Prices are being driven down as many homeowners without flood insurance look to cash out and start over, while investors look for a buy-low opportunity. That has only led to more uncertainty in the long-term outlook for the Houston real estate market. Early predictions after Harvey were that home prices would ultimately go up due to lack of supply, but many homeowners in flooded areas worry that property values will go down due to all of the damaged and uninhabitable homes.
Weaster believes those who didn't flood should be fine in the long run, if they ride out the next few months of volatility. "In my opinion, ultimately it's going to increase your property values," he says. "If these (investors) paid 165 thousand dollars for a house, they're going to have to put 60 into it, and now you're back up to the 230-240 range, already. So I think it's going to help property values."