Housing Price Decrease Image compressedMany areas of Houston were impacted by the recent flooding associated with Hurricane Harvey and the release of water from the Addicks and Barker reservoirs. In an attempt to estimate the impact on housing prices, HSSK researched the listing prices of houses proximate to Brays Bayou in Southwest Houston. We concentrated on houses listed in the area generally bound by Loop 610 to the east, Braeswood Boulevard to the south and Bissonnet to the west and north. Within this area are many developments, including Maplewood, Maplewood North, Maplewood South, Maplewood West and Meyerland.

What we found were several houses listed prior to Harvey making landfall were re-listed after Harvey made landfall and the subsequent flooding. These houses showed list price reductions ranging from 35% to 50%. Several houses listed pre-Harvey were not re-listed but were withdrawn from the market or the listings were terminated. We also noted many of the listed homes had comments indicating the houses never flooded or did not flood during Harvey.

Of the 110 houses in the defined area that are currently listed as active or pending, fully 50% have had price reductions post-Harvey. Many “For Sale” signs in the yards of houses in this area now also include an additional sign indicating that the house had not flooded. Anecdotal evidence also points to houses previously for sale are now offered for rent which may be another indication of a potential stigma associated with these houses. These houses, regardless of whether they have ever flooded, may be stigmatized due to their location in an area which has experienced repeated flooding. This stigma could conceivably manifest in the areas proximate the Addicks and Barker reservoirs. Since August 25, 2017, 45 listings have been withdrawn or have been terminated and only 15 active listings have been posted in the MLS. However, some of those 15 Active are re-listings of houses which had been previously listed, withdrawn or terminated, and then listed again at lower prices.

The apparent lack of reliability of FEMA maps was recently pointed out in a joint study from Rice University and Texas A&M University Galveston, which indicated that FEMA flood maps failed to capture 75% of flood damage from five recent serious floods. None of those previous five floods were 100-year events.

For further reference, here is a link to the SSPEED Flood Inundation Map for Brays Bayou as of August 28, 2017: http://sspeed.rice.edu/sspeed/

What does this mean for the future of homes located near bayous, but have never flooded?

It is quite possible they will be stigmatized by the flooding for several years. A big unknown is the potential loss in value to the flooded homes, not only during Harvey but in previous storms and hurricanes. These homes may be difficult to quantify in the long term, but in the short term, it is likely these properties will suffer the greatest.

In our next article, we’ll look at housing prices in west Harris county following the Addicks and Barker reservoirs water releases.