It was like a scene from the pre-oil-bust housing boom: A steady stream of prospective buyers trekked through an open house last Saturday in a family neighborhood in northwest Houston. Their cars were parked up and down the block.
The owners of the house, a three-bedroom traditional with brand-new everything, had five offers by the end of the day. They accepted the highest of the two that came in above asking price.
“It was a very good offer we could never have imagined,” said Amber Ambrose, whose home just north of White Oak Bayou flooded during Hurricane Harvey and at least once before that.
Whether they flooded or stayed dry, whether they’ve been fixed up or remain gutted, houses in Houston are selling at a solid clip.
Single-family home sales across the Houston area were up 7.4% in November compared with the same month last year, according to the latest report from the Houston Association of Realtors. Buyers closed on 6,184 homes, in what was the third consecutive month of sales gains.
Homes priced under $100,000 and those between $150,000 and $250,000 saw strong sales gains while demand for luxury homes declined compared with last year.
The Ambrose family listed their Candlelight Forest house last Wednesday for $147,000. After the storm dumped a foot of water in the house they quickly remodeled it, using their own money while they waited for their insurance money. The property is in the 500-year flood plain.
Even though the house flooded in Harvey and during the Tax Day storm of 2016, the Ambrose’s real estate agent pointed out the positives: It was move-in ready, at a desirable price point and on a huge lot in a wooded subdivision with good neighbors.
“Actually, it’s extremely attractive,” their agent told them.
Demand for homes priced less than $250,000 has been extremely high in recent years as home values have been on an upswing, leaving many would-be buyers priced out.
The median price of the single-family homes that sold last month was flat from a year ago at $225,725, according to the association, which tracks sales handled through the Multiple Listing Service primarily throughout Harris, Fort Bend and Montgomery counties.
Housing inventory in November inched up though supply remains constrained.
“The key to boosting supply will be restoring salvageable homes to sellable condition and ramping up new construction, both of which we want to see sooner than later,” association chairwoman Cindy Hamann said in the report.
Many of the flooded homes that have been cleaned up are being snapped up by investors.
Ambrose doesn’t know who is buying her house, but she did get a couple of “low-ball cash offers” likely from investors.
Brian Spitz, president of real estate investment company Big State Home Buyers, said statistics would probably show a decline in home sales were it not for flooded homeowners wanting out and plenty of investment capital.
“We bought a ton of houses in Canyon Gate,” Spitz said of the Fort Bend County neighborhood where all 721 homes flooded.
“They make great rentals,” he said, “and people can get a lot more of their value back.”
The company buys many of its houses from homeowners wanting to avoid foreclosure. Since Harvey, it has purchased 91 flooded houses.
The number of calls he’s getting from interested sellers is up significantly. After a major flood event, there’s typically a pattern.
The first callers are usually homeowners who had their properties on the market before they flooded.
The second set of calls are those who can’t afford or don’t want to fix their homes.
The third round are owners who begin to remodel, get frustrated by the process and then decide to sell.
Homes that flooded just once, Spitz said, and are outside a flood zone, are generally the most desirable to investors.
“There’s not a high premium on flood insurance,” he said. “There’s not a history of multiple floods so the risk is lower and the areas will redevelop. Areas like Katy and Cypress are areas people want to live in. That’s where investors want to buy.”
Tribune Content Agency