8 Impacts of hurricanes on real estate market in Texas

Industry Observer with ValuePenguin

Hurricane damage can be both physical, with high winds and floodwaters hurting homes and cars, and psychological. Weeks of clean-up, destroyed homes and lost jobs can have a long-term impact on current residents and prospective buyers alike. Yet Texas and other hurricane-prone states are resilient, and the image of neighbors helping each other during the worst of 2017’s Hurricane Harvey resonated with people who hope to share strong community connections. 


A hurricane or other natural disaster has the potential to shift housing market patterns based on what areas were damaged the most (and least), while also bringing in investors in search of bargains. Real estate agents who know their market well and follow the storm’s impact carefully can provide additional value to buyers, sellers and investors. 

8 impacts to the real estate market after a hurricane

While everyone hopes to avoid a repeat of the Hurricane Harvey experience, if another hurricane hits, agents can anticipate:


  1. The housing market initially slowing down. In the immediate aftermath of a storm, closings may be delayed while homes are inspected for damage. Buyers may hold back initially from making offers until the storm recovery begins.

  2. Rents, especially for short-term rentals, spiking due to high demand. Depending on the level of storm destruction, residents of damaged or destroyed homes may need to move into rental housing for anywhere from a few weeks to over a year. Some rental properties may need to be evacuated as well, with those residents also competing for apartments and single-family rentals.

  3. Car insurance rates rising. After Hurricane Harvey, insurance rates for car owners in Houston increased due to massive flood damage. With an average annual rate of $2,811, the highest in the state, the added financial burden can make it hard for consumers who may already be maxing out their budget to move to the area. Buyers need to factor in all costs, including car insurance, particularly if they are relocating to a hurricane-prone area.

  4. Rising home insurance rates. Home insurance rates vary by location, home size and construction materials, but when insurance companies must pay out for storm damage, rates are likely to rise. And the increase can even impact homeowners outside of the area where the storm struck — and potentially even outside the state

  5. Buyers needing additional insurance policies. According to USAA, homeowners may need separate home insurance policies for wind damage and excess flood insurance depending on where their home is located and how it is constructed. Many of the homes damaged during Hurricane Harvey were not in a federally-mandated flood insurance zone. New buyers may want to buy flood insurance or be required to buy it by their lender, but be prepared to spend some money. Premium prices in some of Texas’ largest cities range from $468 to $1,117 per year. 

  6. Volatile home prices. Property values, particularly in areas that typically flood during a hurricane, are likely to drop just after a storm. Residents who can’t pay for repairs or higher insurance rates are more likely to sell for a bargain rate. At the same time, demand may increase for homes in neighborhoods that don’t flood or that have been built to withstand storms, causing prices to rise in those areas. 

  7. A lack of competition could introduce a buyer’s market — unless investors rush in. While most people associate “storm-chasers” with tornado watchers, real estate investors sometimes flock to hurricane-damaged areas after the floodwaters recede. If large numbers of investors enter the market, that could skew home prices again due to high demand, pushing out some homebuyers looking for a bargain. And tech companies are starting to develop methods for identifying climate risk in areas that are impacted by natural disasters, giving even more insight, and a potential advantage, to real estate investors. 

  8. Long-term market impact may be minimal. While short-term market shifts are inevitable, in the long term, buyers are likely to return to desirable neighborhoods once the storm damage is repaired. 

Tips for selling real estate in a hurricane zone

If your real estate business includes working with buyers or sellers in a hurricane-prone area, you can add value to your customer service in the following ways:


  • Stay up-to-date on insurance issues. Be aware of increases in rates or new requirements for additional coverage. Be ready to recommend insurance companies known for lower rates and excellent service.

  • Follow the news on storm damage and repairs. Knowing where the damage is worse or neighborhoods that experienced minimal storm impacts can be valuable to buyers and sellers.

  • Look for potential bargains. Vacant homes or damaged homes could be a deal for your buyers if they’re willing to take on home improvement projects.

  • Be aware of new construction options. Newly built homes typically meet higher standards to stand up to storms.

  • Always recommend a home inspection. Home inspections are even more important when a property may have been repaired in a hurry after a storm or has damage that went unnoticed.

  • Educate yourself on storm mitigation techniques. Find out when a home was built or remodeled so you understand whether it was built to meet today’s construction codes. Look for home improvements — or suggest them — such as metal clips or straps in an attic to strengthen the roof or raised elevations to reduce the likelihood of flood exposure. 



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Joe Resendiz

Jr. Research Analyst
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