How Hurricane Harvey Has Affected Housing in Houston

Before Hurricane Harvey devastated the city, Houston was making a name for itself as an affordable city with a strong economy that was attracting more and more millennials every year. How will Harvey's destruction affect Houston's housing market? Read on for our breakdown of the short-term impacts of the hurricane.

Average rent before and after harvey

Pre-Harvey, Houston on the Rise

In the past few years, Houston has received a lot of media attention for its booming job market and growing cultural scene. Millennials make up 14.5% of Houston's population, drawn to the city by high paying jobs in the energy market, and a plethora of affordable housing options. With a vibrant art scene and plenty of youthful energy, all signs pointed to Houston becoming one of the next millennial hotspots.

A City in Trouble

Hurricane Harvey was the costliest cyclone in history, causing over 200 billion dollars in damage. Classified as a category 4 hurricane at its peak, Harvey made landfall along the eastern shore of Texas on August 24th. Over the course of four days, areas in Texas received over 40 inches of rain, an unprecedented level of rainfall for the state. The storm caused catastrophic flooding in eastern Texas, displacing more than 30,000 people from their homes and resulting in 77 fatalities.

The hurricane shook not only the day-to-day lives of thousands of Texans, but also the Texas housing market. Thousands of homes in Houston, Corpus Christi, El Campo, Victoria, Bay City and other neighboring towns were destroyed by the storm. Homeowners with flood insurance will be able to rebuild their homes, but it will be years until Houston returns to its pre-Harvey condition. The federal government has already pledged more than 1 billion dollars towards Harvey relief. In addition, non-profits and local charities have raised millions of dollars from corporations and private citizens to help areas affected by the hurricane.

Housing Post Harvey

The outpouring of national support to help areas affected by Hurricane Harvey suggests that Texas will be able to bounce back from the catastrophe. In the meantime, the rental market in Houston has remained surprisingly stable.

The average rent in Houston has dropped 5.69% in the three months following the hurricane. In Houston the average rent for an apartment in July of 2017, a month before Harvey, was $1440 per month. In November of 2017, almost three months after the hurricane, the average rental price is $1358 per month. Overall, rents in Houston have dropped 5.45% in the past 12 months.

Other Harvey-affected cities show similarly stable housing markets. The average rent for an apartment in Corpus Christi in July was $1130 per month. Now, in November of 2017, rents are essentially the same, apartments averaging $1126 per month.

In Victoria Texas, rent trends showed a similarly miniscule dip. A month before Hurricane Harvey, rents in the metro area were $930 per month. Three months after the storm, reports showed that rents averaged $920 per month.

While rental prices in the immediate aftermath of Harvey have proven to be relatively stable, rents could definitely shoot upwards as the city rebuilds. In the past, reconstruction after devastating hurricanes has brought thousands and thousands of construction workers to the affected city. As the rebuilding process ramps up and brings more people to a city already facing a depleted housing stock, we should expect to see rental prices rise.

The Wealthy Face the Greatest Consequences

Forbes found that the properties most affected by hurricanes were expensive beachfront properties in affluent areas. Even though these locations face the highest risk, their scenic coastal views retain value, even after storms like Harvey prove their vulnerability. Inland locations are both more affordable and more protected from the risks posed by monumental storms.

In Houston, El Campo, Bay City and Corpus Christi, the median home value of flooded areas was higher than the median value of homes in non flooded areas, showing that wealthier areas were more prone to flooding. These damaged, affluent areas raise the price tag of Hurricane Harvey's havoc. However, these types of neighborhoods are more likely to be properly insured for flooding, and therefore should recover well in the aftermath of Harvey.

Forbes estimated that the total value of all of the flooded homes caused by Harvey comes in at around 32.1 billion dollars, with the bulk of the flooding affecting the Houston metro area.

Until Houston is rebuilt, its status as a growing millennial hub may be on hold. Right now, Houston and neighboring cities affected by Hurricane Harvey are focused on rebuilding their communities. So far, Texas has proven resilient in the face of disaster, and it looks like the areas affected by the hurricane will come back stronger than ever. Check out our rental listings to learn more about how Harvey has affected the Houston housing market.

 

Beware of rental ad scams: Rent Jungle is a rental search engine for apartment hunters and is not responsible for the content of rental listings found on the site. Rent Jungle encourages you to use common sense while apartment hunting. Beware of fraudulent listings. Click here to learn about common scams.