HURRICANE IKE: GREAT FOR HOUSTON REAL ESTATE! “. . . the storm, which might have left about 50,000 homes uninhabitable in the Houston-Galveston-Brazoria metro area, could actually give a boost to the housing market, University of Houston Professor Barton Smith told me today. The local job market, which has remained robust thanks to the booming energy sector, has helped to fuel the need for housing. The storm has created a shortage of homes, some of which will likely never be rebuilt, Smith said. And new home starts could drop as builders turn their attention to repairing damaged homes, he added. ‘This is probably going to create a strengthening of the housing market,’ Smith said.” [Hot Property]
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“The local job market, which has remained robust thanks to the booming energy sector, has helped to fuel the need for housing.”
Sounds very 1981 to me. Surely there are people like me who remember Houston in the 1980s. True, I was a high schooler, but I do remember seeing every other house in Lakewood Forest either foreclosed on or for sale. I also remember the vast sea of abandoned strip shopping plazas that littered Houston.
If you are a “peak oil/Y2K” weirdo, go buy some Houston houses. I’ll sell you mine for what Zillow says it’s worth. The fact is, real estate inside 610 is grossly overpriced, there will be massive defaults on the trendoid housing built inner loop over the past 5 years, and there is a massive sea (not just a wave) of cheap foreclosures about to wash over the Houston area coming from the ‘burbs. Unlike some, I don’t subscribe to the “it’s different this time!” theory.
I bet you’re a big hit at parties Lou.
Thank you, jgriff. I just spit all over my keyboard.
It’s easy to be Debbie Downer on this one and tougher to stay optimistic. It seems like they’ve built so many homes in the last 5 years at the expense of the overall wellfare of the housing market. It seems like the town homes around Washington St and the “Hot on Houston” suburb houses are set up to fail from the get go. I could be wrong, but all that seems to point at inner loop house prices gaining in popularity. For example, I don’t see the Upper Kirby or Montrose or Braeswood areas as overpriced. I see them as highly desirable and where I’d want to live if I had the money. Since I’m not the type to buy a new, cheaply made town home just to get closer in to the city and I can’t afford the areas I already mentioned, I (and lots of people in my earning range) settled on the Willowbend/Westbury area and are reasonably happy with that decision so far.
With high fuel costs to stay for the foreseeable future, inner loop properties will stay firm compared to outer suburban properties. Naturally, lower rung builders properties will have trouble keeping up with quality products, but there will always be a market for inner loop properties… and the availability of land to build those inner loop dwellings on will become more and more expensive to buy. There certainly will be suburban exceptions to the rule, such as The Woodlands, but most suburban properties will take a while to recover. I refuse to buy into that whole doom and gloom mantra.
I’m more of the opinion that real estate inside the loop was, with a few exceptions, grossly under-priced for years and is now becoming more realtistic. Low fuel prices and massive amounts of road building have made the suburbs and exurbs artificially popular for decades. The current, and probably long term, increase in fuel prices is going to be hard on some of these communities.
I have strong beleive in Inner Loop properties. As the gas price go up, people will like to be closer to work. Houston begin the 4th larger city in the Nation, we still have the most affordable housing. Our price is still have a long way to catch up. With the Hurricane Ike, it was help out housing market, and the strong job growth will help.