On August 25, 2017, Hurricane Harvey — categorized as a Category 4 storm — made landfall in Texas, reaping $125 billion in damage according to the National Hurricane Center. Harvey was classified as the second costliest hurricane on record, just behind Katrina in 2005. During the height of the storm, an estimated one-third of Houston was flooded, displacing hundreds of thousands of Texans from their homes and driving them into emergency shelters.
While the damage incurred by Harvey was catastrophic, much of the destruction was concentrated to Houston’s metro area — even now, the economic impact is difficult to wrap your head around. Houston is the fourth largest city in the country, with an estimated population of nearly 6.6 million people. After Harvey inevitably fizzled out, well over 200,000 homes had been severely damaged due to flood waters. Making matters worse, nearly 75% of the damage occurred outside of the 100-year flood plain; residents of the area hadn’t previously found themselves in the crosshairs of such a colossal storm — the vast majority elected to forego flood insurance. In the span of a few days, thousands of homeowners in Houston lost everything.
In the aftermath of the storm, Houston is making tremendous strides in making a full recovery. While there’s still a lot of work to be done or the problems that persist, the US Department of Housing and Urban Development has allocated over $5 billion toward recovery programs throughout Texas.
Houston property values after Harvey
Another area where Houston is making a comeback: property value. As you might expect, Harvey had a devastating effect on property values throughout Houston’s metro area; thousands of homes had sustained flood damage and plummeted in value. It wasn’t long before home values started creeping back up, however, with many investors jumping at the opportunity to purchase homes at lower rates. According to the Houston Chronicle, “So far, concerns the hurricane would leave a lasting stain on Houston’s reputation and keep people from coming here and buying houses haven’t played out in any obvious way.”
So, what does this mean for people looking to buy a home in Houston? For starters, Houston is still an amazing place to live with lots of affordable options for aspiring homeowners. Where there is economic opportunity, generally strong housing markets reside — on that front, recent surveys conducted by Bank of America indicate Houston leads the entire country in terms of small business optimism, as reported by from Houston Public Media. Business owners believe the area is rife with opportunity and the city’s increasing economic diversity makes it an attractive destination for business. There’s no doubt Houston will fully rebound from Harvey — this is an exciting time for people to invest in that recovery and secure themselves a great deal.
“Do I need flood insurance in Houston?”
Thousands of homeowners affected by Harvey probably never imagined they’d need flood insurance until it was too late. While everyone’s situation is unique, you never want to find yourself in a similar situation if you can avoid it.
There are a few things to keep in mind when considering how susceptible your home is to a flood. Start by checking out a flood map and considering the surrounding elevation. Keep in mind, you may be required to purchase flood insurance if your area is considered high-risk; make sure you get a sense of what’s required by the county or associated HOA. Even if you don’t live in what’s considered a high-risk area, remember floods can happen anywhere. According to FEMA, “More than 20 percent of flood claims come from properties outside the high-risk flood zone.” A policy helps you stay prepared for the unexpected, giving you a little peace of mind.
According to the Texas Department of Insurance, the average cost of flood insurance is $700 annually. That cost will vary depending on your risk, your home’s value, and your deductible. More robust policies will cover upwards of $250,000 of your home — separate policies are available for personal belongings, covering upwards of $100,000. All told, it’s a relatively small price to pay to keep your most important investment protected from the elements.
Houston has always been an amazing place to live, but now it’s also one of the most resilient cities in America. Oh, also Beyoncé is a native — there’s that, too.