Just six weeks after floodwaters from Hurricane Harvey damaged thousands of homes in Houston, home sales there have rebounded.
Sales rose 4 percent in September in Houston from the prior year, after plummeting nearly 24 percent in August, according to the National Association of Realtors. That helped push home sales nationally higher by 0.7 percent; estimates had been for a slight drop.
“I don’t think anyone expected to see home sales in positive territory this soon after a natural disaster of Harvey’s magnitude,” Houston Association of Realtors Chair Cindy Hamann said in a statement. “The September report speaks volumes about the incredible resiliency of the Houston real estate market,” she said.
The Houston gains are due in part to delayed closings in August that were pushed forward, as well as investors buying up damaged properties.
“The September report speaks volumes about the incredible resiliency of the Houston real estate market.”
In the weeks following the storm, as homeowners emptied the wet remains of their belongings in the hardest hit neighborhoods, signs lined avenues advertising, “We buy houses. Close fast!!! Any condition.”
“There are many investors looking to buy properties as-is, damaged property, at discounted prices, and there were some home sellers willing to take that bite,” said Lawrence Yun, chief economist for the realtors association.
And it’s not just small investors looking to flip properties, either. Single-family rental companies, which have a growing footprint nationwide, also took advantage of owners seeking to get out fast.
“Looking at the biggest buyers of homes in the Houston area in August and September, three stand out as ramping up on purchasing,” said Daren Blomquist of ATTOM Data Solutions, which derived its data from buyer names on sales deeds:
Red Door Housing purchased 15 homes in August, up from four in August 2016.
Cerberus SFR Holdings purchased 20 properties in September, up from no purchases in the previous month and a year ago.
Cordova Capital LP purchased 14 properties in September, up from three in August and none a year ago.
Several large single-family rental real estate investment trusts, namely American Homes 4 Rent and Starwood Waypoint, own hundreds of homes in Houston and some sustained significant damage. The two REITs were quick to come in and repair the properties. Their damages were estimated at least $10 million.
The Houston rental market, not surprisingly, surged dramatically in September. Leases of single-family homes were up 83.6 percent, with average rent rising 7.9 percent to $1,886, according to the Houston Association of Realtors.