Harvey distorts housing market

Sales show spike over last August

Houston-area home sales in August were up an eye-popping 37 percent over the same month last year, capping off a strong summer with an even bigger splash.

But there’s a reason for the astonishing increase: Hurricane Harvey.

After last year’s storm hit Houston at the end of August — and even days before — closings, showings and mortgage lending in this area effectively came to a halt as buyers and home shoppers put their plans on hold. For the last week of the month, real estate offices were dark.

Yet a comparison of the first three weeks of August with the same period in 2017, shows that sales activity still increased, especially for higher-end homes, the Houston Association of Realtors said Wednesday in a monthly report.

Despite the hurricane, which flooded 154,170 single-family houses in Harris County — many of which are still empty or not yet repaired, the housing market has shown resilience.

Investors have purchased thousands of homes, boosting sales, but an improving job market has helped, too.

This region gained more than 100,000 jobs between July 2017 and July 2018 — the fastest rate since 2014, when the last oil

boom peaked, data from the Texas Workforce Commission show.

At certain price points, houses don’t stay on the market long if they’re in good shape, said Judy Berno of Keller Williams. Some generate bidding wars.

Berno recently sold a bungalow with a garage apartment in Montrose for more than $600,000 in just a couple of days.

In Pearland, she said, well-maintained homes priced under $400,000 sell fast.

Supply is building up in some neighborhoods, however, where it’s taking longer to sell.

And Berno said she’s seeing buyers get pickier on inspections and more sellers accepting contingency contracts.

“I’m beginning to see a little more negotiation,” she said.

Buyers last month closed on 8,358 single-family homes, compared with 6,090 in August 2017, according to the HAR report, which tracks properties sold through the Multiple Listing Service throughout primarily Harris, Fort Bend and Montgomery counties.

Comparing just the first 24 days of August 2018 and 2017, activity was up 7.6 percent last month when there were 5,844 sales.

Distortions in the data will likely continue.

“Harvey’s effects lingered, however current market conditions are healthy, with single-family home sales and rentals up despite constrained inventory,” Kenya Burrell-VanWormer, the association’s chair said in the report.

Based on the adjusted figures, sales of all homes over $150,000 saw increases last month. Homes in the $500,000 to $749,999 price range were up 16.7 percent in sales. Those selling for more than $750,000 were up 15.4 percent, HAR’s data show.

Heights resident and owner of Boulevard Realty Bill Baldwin put his historic 6,700-square-foot home on the market late last week for just under $3 million. He had a contract to sell it three days later.

“There were a good number of showings,” Baldwin said, “a little more than I thought given the fact is it’s the most expensive house for sale in the Heights.”

Several of the people who came through had young families.

“Typically, what we’d ben seeing for big, expensive houses were older people downsizing from Memorial, Kingwood or The Woodlands,” Baldwin said.

The entire summer was stellar for Houston real estate, with sales above 8,000 from June through August.

June was a record month with buyers closing on more homes than any other month in history and at sales prices never before reached.

Last month, the median price of a home was up 3 percent to $236,870. The June record was $240,000.