Early estimates reveal that approximately 100,000 homes have been damaged or lost to Harvey. It is estimated that nearly 80% of affected homes were without flood insurance protection. The scope of the economic disaster is already estimated at being the most costly in U.S. History.
In five short days time, Houston received a year's worth of rain. Nearly no preemptive human measure could have prevented the massive floods, loss of life and sheer destruction that followed. We are in the first days of containment and recovery. Shelters are full, Texas citizens displaced, possessions lost and thousands of lives on hold.
Here in D/FW we are already seeing the effects of Harvey at 1000's of local gas stations. Fuel shortages have also spread to Austin and San Antonio. Still these temporary inconveniences as frustrating as they are, pale in comparison to the 1000's of shuttered Houston area businesses, tens of thousands of long-term displaced residents and the years of reconstruction that now lies directly ahead.
One of the fundamental unanswered questions concerning Harvey is its impact on the Dallas/ Fort Worth and other Texas Housing Markets, who for years has represented some of the fastest growing housing markets in the United States.
Harvey's Impact on DFW Real Estate Market Home Pricing
Since 2012, Dallas/ Fort Worth area home builders have complained of labor shortages, the cost of labor and the ever escalating cost of building materials. Those shortages have strained the system, raised new home prices and increased the time it takes builders to complete new homes. However, 2017 saw a percentage of the D/FW housing market take a pause or correction from some of the best years ever. In fact, some of the best D/FW new home deals in years (depending upon location and price point) can now be found, but will these steeply discounted new home deals turn out to be a short lived market correction blip due to Harvey's expected cost impact on future housing?
Only time will tell, but higher costs, based upon increased labor and material demand, seem unavoidable in light of record breaking storm damage losses. There are already accounts by Houston area contractors of their inability to secure building materials like lumber and drywall and Dallas Morning News is reporting housing market problems are inevitable. Even before Harvey, the National Association of Home Builders on August 14, 2017, was reporting a severe construction labor shortage, and now looming supply disruptions for building materials.
Already, an armada of contractors has arrived in Houston, with many thousand more expected. A percentage of these Houston bound contractors will be the same people building today's new homes in Dallas Fort Worth and their loss will further strain an already short supply of construction contractors. Over the years, I have talked with scores of construction crews, who expressed they liked working for insurance companies who generally pay better when they can get work from them. For insurance companies, Houston will represent an unprecedented need for contractors from all the construction trades for years.
Since this is week one of a lengthy and difficult process, it is simply impossible to know how the completed book on Harvey will read, but what we do know is this, Harvey is a watershed natural disaster event that is expected to have far reaching economic implications that will to an uncertain degree, impact housing in Dallas/ Fort Worth.
Many builders are reporting an upturn in sales activity. Inventory availability has created a micro-buyers market, but as home supplies are reduced, future prices will be subject to storm related cost factors.
God Speed Houston Texas!
Mike Askins, Realtor, Owner ARG
Got questions for Realtor Mike? Call me at 214-727-3686 (mobile)