HOUSTON – Stephen Compton and his fiancé, Noelle, are planning to buy their dream home together.
"We were just looking at all of the neighborhoods closer to the city. Those that had good character, size for a family. Growing neighborhoods," Compton said.
For three months, the search was going pretty well -- until Harvey hit, forcing them to re-evaluate their entire game plan.
"We definitely like the Westbury area, (but) we know that area got affected pretty hard," Compton said. "We were looking in the south, 45 area, and that area was deeply affected. Now those areas, we're kind of trying to stay away from."
Real estate associate broker Shad Bogany said Stephen and Noelle are not alone. Many of his clients were interested in areas that had never flooded -- until Harvey.
"They are now allowing us to be able to put a check if the house had flood, or did it have flood or water on the lot itself, or did water get in the house," Bogany said.
Even after Harvey, Bogany said even with thousands of homes flooded, there is still a strong surplus of available homes.
"It is a great time to continue to buy, because the key to home ownership is low interest rates," Bogany said.
Buyers should expect sale prices to go up on homes that didn't flood.
"Even if the price has gone up a little bit, for every thousand dollars, the notes only change about eight bucks," Bogany said.
Homeowners making repairs to flood-damaged homes can expect to pay more for supplies as demand grows.
"Any sort of building material is gonna rise. You're gonna have consumers competing with the builders for that. Anything that could have been damaged -- light fixtures, sheetrock, appliances," Bogany said.
Investors are already scouring neighborhoods, looking to make deals on flooded homes they can rebuild and rent out. Homeowners who sell can expect to take a hit financially.
"If your house flooded two or three times, you're probably looking at close to land value. If your home flooded once, you're probably looking at about a 20-30 percent discount on that home," Bogany said.
But there is some good news for those homeowners who have decided to walk away, rather than rebuild. The Federal Housing Administration is offering a loan designed to help ease the burden of a sudden and unplanned home purchase.
"A lot of the people who flooded are gonna be doing two transactions, selling one and buying another. (The) FHA Disaster loan called the 203 H. It allows the consumer to be able to buy a home at a hundred percent, with no down payment, and they don't use your other mortgage to qualify you," Bogany said.
Bogany said prospective homebuyers should do a lot of homework. Don't just ask if the home has flooded. Ask about retention ponds and flood insurance requirements.
Compton said he and his fiance definitely plan to get flood insurance.
"We're thinking no matter where we go, we're always gonna get flood insurance," Compton said.
Bogany expects the Houston housing market to return to a more normal state in about six months to a year.
"The key to that is that time heals everything," Bogany said.
For more information on the FHA Disaster loan, click here.
To view a map of how Houston neighborhoods rank on the flood plain, click here.
To view the listing of the home Stephen and Noelle visited, click here.
