Bellaire Real Estate Recovery After 1,936 Homes Flooded by Harvey
Bellaire’s water tower. Photo by R. Bivins
BELLAIRE, Texas – (By Michelle Leigh Smith for Realty News Report) – The City of Bellaire reports that 1,936 of its 6,688 homes flooded during Hurricane Harvey.
For decades, Bellaire’s home values have remained strong. This independent, well-located municipality surrounded by the City of Houston attracted investment and redevelopment: many post-World War II houses were demolished to make way for million-dollar residences. Then Hurricane Harvey struck, changing the landscape of the local housing market.
Seven months after the storm, Bellaire’s housing market is beginning to stabilize, but responses among residents vary widely. Some have left the area entirely; others are rebuilding, elevating homes, renting, or renovating damaged properties.
Moving away — Some residents decided to leave Bellaire for good, while others moved into high-rises or relocated to drier climates. Steve Toms is selling his three-story, fully furnished townhouse in Bellaire and relocating to New Mexico.
Carol and Steven White built their Wedgewood Street home in 1992 and completed major renovations over the years. They moved into an inner-loop high-rise just before Harvey made landfall and now observe storms from 30 floors above the ground.
Rentals — Landlords have raised rents and are securing tenants on short-term leases. Houses that did not flood often rent quickly. Across Houston, multifamily occupancy rose as the storm damaged more than 200,000 dwellings in Harris County.
Lot sales — Lot prices have dropped as inventory increased not only in Bellaire but also in surrounding neighborhoods such as Meyerland and the Braeswood corridor.
“Homes listed as ‘lot value only’ after flooding are selling quickly — builders are buying them,” says Lucie Ogdee of Keller Williams Realty – Metropolitan. She notes median listing prices for new homes around $795,000 and a price per square foot near $282.
“Lot values have fallen because supply is high and demand is relatively lower unless pricing is attractive,” says Mike Livingston, a Realtor with Keller Williams. “Of the 26 single-family homes under contract in Bellaire this week, 11 were flood-damaged and are being sold for lot value only. Out of 174 active single-family listings (about 62 of which were flooded), 28 are new construction, which is moving slowly. Most new homes now are custom builds where the buyer found a lot and hired a builder.”
New construction — New homes and townhomes in Bellaire are being designed to sit above flood levels. In the first two months of 2018, building permits in Bellaire reached nearly $11.5 million, compared with $7.8 million in the first quarter of 2017.
“Bellaire is a hotspot for new luxury construction,” says Neal Hamil, president of Carnan Properties. “Like many established Houston enclaves, cottages are being replaced with larger homes. The lots are desirable because of their size and mature trees.”
Builder Marvin Blum reports eight homes under construction, three of which began before Harvey, plus three major remodels. His listings frequently note that homes are being “elevated.”
“Homeowners who have settled with insurers are contacting builders. From September to January our workload was unlike anything we’d seen before,” says Bryan Phillips, president of Cason Graye Homes. Elevation costs vary: “Depending on the scope and height, jobs can range from $80,000 to over $200,000.”
Elevating instead of razing — Many houses in Bellaire and other flood zones are being elevated rather than demolished. Existing homes are raised six feet or more and set on concrete piers, similar to beach houses in Galveston. Broker Amy Bernstein of Bernstein Realty notes recent elevations in Bellaire’s Southdale neighborhood.
Resale market — Joseph Avioli of Nan Properties says buyers seeking homes in Bellaire prioritize move-in-ready properties zoned to strong public schools and that have not flooded. “Our market typically heats up from March through September, and interest rates are rising,” he adds.
The Bellaire market was redefined when Hurricane Harvey stalled over the region on Aug. 25, 2017, dumping extreme rainfall across the area. The long-term effect on local property values is still emerging because the post-Harvey sales history is short. “The expectation is that non-flooded homes gained value while flooded homes lost value,” Avioli says.
Flooding remediation — “Water does not respect political boundaries,” says Chris Canonico, principal with the Ardurra Group and a member of Bellaire’s Flood Mitigation Task Force. “Being inside or outside a mapped floodplain offers no absolute protection, because flood behavior can change quickly with intense rainfall. We do believe that when Project Brays is completed, flood risk will be significantly reduced.”
City Engineer James Andrews’ Flood Mitigation Report shows that 72 percent (4,783) of Bellaire’s 6,688 homes carried flood insurance. During Harvey, 29 percent (1,936) of homes experienced structural flooding; 2 percent flooded both in Harvey and during the Memorial Day 2015 storm. Of the homes flooded during Harvey, 54 percent (1,039) were built before 1980.
“The areas with the most flooded structures were in the southeast quadrant of the city, followed by the south-central area — both near Brays Bayou,” City Development Services Director ChaVonne Sampson reported to Bellaire City Council on March 19.
Value in the land — Are owners of older homes repairing them or selling lots? “Traditionally, and I’ve heard this from builders even before the flood, the value is often in the land rather than the structure,” Sampson says.
“In recent years I’ve seen Bellaire homes with foundation issues, prior floods, or ground floors below base flood elevation,” says Vicki Chu of Roger Martin Properties. “These factors affect resale value. Also, flood insurance premiums can increase by more than $2,000 annually. Since the Memorial Day 2015 and Tax Day 2016 floods, I hoped the city would address flooding and foundation problems more directly. Instead, I was surprised by choices like replacing the city logo and water meters. Homeowners need attention on these core issues.”
Where can flooded residents turn for help?
Bellaire homeowner Steve Toms asks what options remain for Harvey survivors once FEMA assistance falls short of rebuilding costs. “We’re about to list our inner-loop condo at a mid-range price,” he says. “Many 2,000-square-foot units are listed below $400,000; newer and larger units start at or above $700,000.”
“Before Harvey, remodeling occurred sporadically throughout neighborhoods. After the storm, entire neighborhoods are being renovated,” Sampson says. “If you know of a house that hasn’t been remediated, we will inspect it. You may make repairs as long as structural damage does not exceed 50 percent.”
About flood insurance, Sampson adds, “You can still obtain flood insurance on your home even if it flooded before. Contact your insurance agent.”
Alanna Reed, Director of Communications for Public Works in the City of Houston, notes: “Houston homeowners can request a repetitive loss letter to support Increased Cost of Compliance claims. The Floodplain Management Office will evaluate and, if a property is designated repetitive loss, may withhold repair permits until the home is brought into compliance.”
Long-term outlook — Bellaire remains attractive to medical professionals due to its proximity to the Texas Medical Center. It’s a family-oriented community with its own police department and convenient access via Loop 610.
“Harvey prompted movement in the market as displaced residents and investors sought value-priced properties,” says Realtor Jean Shabot of the Shabot Team at Berkshire Hathaway HomeServices Anderson Properties.
“In the six months before Harvey there were 20 percent more sales than afterward,” Shabot adds. “During recovery the market slowed considerably until funds began circulating again.”
“In the six months since Hurricane Harvey there were 120 sales in Bellaire,” Shabot says. “The average price per square foot was $241.10, and average days on market was 89. A mere 1 percent drop from pre-Harvey prices indicates a resilient market.”
“In the six months before Harvey there were 150 sales in Bellaire with an average of $251.46 per square foot and an average market time of 92 days,” she says.
“Many homes remain unrepaired for various reasons, including owners’ uncertainty about returning. We expect a number of those homes will come to market for sale or lease as owners decide.”
