Houston Market Analysis – Bellaires Recovery Since Harvey
Wealthiest Suburb in Texas
Bellaire, is a City incorporated 100 years ago in 1918, in the Houston market area. A recent article by 24/7 Wall St. on richest towns in each state declared Bellaire as the wealthiest suburb for Texas where the typical household earns $187,895 a year, the most of any town in Texas, and more than triple the median income of $54,727 across the state.
In his recent blog post, the Mayor of Bellaire, Andrew Friedberg wrote “We knew a year ago we’d emerge stronger than ever, and indeed we have”. This is in remembrance of the devastating damage Bellaire endured about one year ago from Hurricane Harvey.
Devastation from Harvey
The Houston Chronicle reported about one-third of the approximately 6,500 homes in Bellaire sustained structural damage in the August 2017 flooding. The combination of topography and proximity to the Bray’s Bayou watershed has been the main source of flooding in this area during severe rain events even prior to Hurricane Harvey.
The City of Bellaire has worked along with the City of Houston and FEMA on elevation standards and flood control infrastructure. The City has applied for grant funding from various disaster recovery and mitigation programs to help elevate the residences but were turned down due to being too wealthy a community to qualify.
Bellaire’s recovery can be analyzed through its residential market, comparing the past year to previous years. The following is a trend analysis for the Bellaire Area from January 1st to December 31st over the past several years. This includes closed sales of single family residences except for sales sold at lot value.
Year to date, in 2018, there have been 145 closed sales. The median sales price is $975,000. The market trends indicate steady volume with minimal but consistent growth in values, despite the re-occurrences of flooding in this area. Homes priced properly in this market typically sell within 60 days. The momentum of the residential real estate in this affluent market seems almost extraneous to the Category 4 hurricane from only a year ago.
Neighborhood in Transition
While Houston is well-known for its lack of zoning, Bellaire although surrounded by the City of Houston, does have zoning. The neighborhood is a mix of older resale homes and recently built homes. Older homes being razed in favor of new construction. New construction homes are higher priced, typically larger and contain superior interior fit and finish than the older homes.
New custom construction and speculative built homes are scattered throughout the area with a wide variance in price due to lot prices and quality of construction. This trend of redevelopment should continue into the foreseeable future.
The following table highlights the sales of older residences sold at lot value over the last several years.
For homes sold at lot value in the Bellaire area, year to date in 2018 there have been already been 48 closed sales with a median sales price of $427,500 with median cumulative days on market (DOM) of 71. Currently there are 53 Active and Pending listings of lot with a median list price of $460,000 with median cumulative DOM of 180. This sharp increase in volume is indicative of the damage sustained in this area from Harvey. Overall there appears to be a softening in this market and prices appear to be stabilizing with increased cumulative days on market (CDOM) and market sentiment appears to be moving toward a buyers’ market.
Bellaire is still Bellaire
The devastation caused by Hurricane Harvey was unprecedented and will be etched in the minds of Houstonians for a long time to come. However, Bellaire’s residential real estate market has proven resilient and is well on its way to recovery in a considerably short period. To reiterate the words of the Mayor “Bellaire is still Bellaire”.
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Certified Residential Appraiser, Gynell has a diverse appraisal background covering Commercial, Residential, Rural, Complex and Luxury Properties as well as National Appraisal Review work in the secondary Market. She began her Appraisal training in Oklahoma in 2001 covering Rural and Commercial Properties. With several years as a National Review Appraiser at Fannie Mae and other big banks, Gynell has keen insight into the secondary market guidelines and requirements.