Houstons Recent Floods- What Changed?

Question

Since the recent flooding here in Houston occurred, I have noticed changes in investors attitudes towards different parts of town- which is inevitable to a point. People wont touch houses that are in certain neighborhoods that were once the hottest neighborhoods to buy in. Even at discounts.

Has anyone noticed this? What areas/neighborhoods do you need to watch out for and why?

Any input would be appreciated.

Has anyone noticed this? What areas/neighborhoods do you need to watch out for and why?

Any input would be appreciated.

Eric Tait · Answer

I am not an expert, but if something like greater than 50% of the home's value was determined to be damaged, the city is going to make the owner raise the property above the flood plain.

Again, I am not an expert, but I think this is the number.

Chris Uhler · Answer

We had a house in Maplewood that gave us a wake up call.  In the beginning of the year, MLS comps were 318K (ARV 450K).  We closed on the property just after the flood, had multiple delays with buyers and sold it last month for 270K.  Our house never flooded but the amount of new properties coming up for sale as well as the stigma the flood, really hurt the value.  Thankfully we had a huge spread in the deal and were still able to make it a win.  Those flooded - rehabbed houses should be hitting the market here soon.  It will be interesting to see what the retail buyers and appraisers are thinking.

The new builds should be fine - only trouble is most sellers in that area want pre flood ARV for their As-Is flooded house.....

Jeff Greenberg · Answer

My Houston property is in a 100 year flood plain, and was high and dry during this flood  that was touted as a 500 year flood. Go figure.

Kenneth Sok · Answer

@Eric Tait - Agreed. I've heard many veteran investors now discounting them even further now to hedge for any possible changes that may come from city hall to elevate the houses X ft.

With some of these houses, it's too much of a gamble to invest into them when you don't know what type of regulations the city will lay down in the near future.

Unless you're buying at a deep discount, it's a bit too risky.

Eric Tait · Answer

Meyerland has been caught up in this recently.  There were parts that had never flooded even during Hurricane Carla, T.S. Allison or Hurricane Ike, that flooded this summer.

Houstons Recent Floods- What Changed?

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