An inside look at the residential real estate market in Southeast Texas including: the hottest neighborhoods, proven home selling strategies, home buying and negotiating tactics, median prices by neighborhood, average days homes are on the market, and professional advice on how to get the best deal when buying or selling a home.

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September 2017

Establishing the Value of Flooded and Gutted Homes Post Hurricane Harvey

I've been posting about "as is value" and how to determine the value of a flooded and gutted home lately because so many people are considering this option.  Now we have the first two homes under contract.  Not closed yet.  Just under contract but this starts to establish a market value for flooded and gutted homes.  Data from the Southeast Texas MLS

F&G under contract

 

This is information from an earlier post.  I’m sharing it again. 

I have been asked to provide a formula on how to calculate a price on selling a flood damaged home when the seller wants to sell “as is” to an investor.

Here are some parameters to consider when making a calculation.  Keep in mind, the market value for this category of home has yet to be established.  (Is only beginning to be established)
 
-Start with the value of the home prior to the flood.
-Discount that price by 10%-20% to account for stigma due to the flood.  The extent of the damage to the house/neighborhood will determine how much to discount.
-Subtract the estimated repair costs.
-Subtract 20% to account for profit.  (20% of the anticipated repaired sales price).
 
Example:
 
Pre Flood Value –            $200,0000
15% Stigma Discount –     $30,000
After repair value –         $170,000
 
Repair Costs –                     $60,000
20% Investor Profit –         $34,000
 
“As Is” Value -                 $76,000
 
This information should be taken with a healthy dose of salt.  Stigma, repair costs, and investor profit expectations are all moving targets.  
 

If you would like help determining the market value of your home please contact me.  There is no cost for the analysis. 

#409Sold

Sincerely,

Diane

 

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Thanks to Hurricane Harvey. Flooded and Gutted Homes added to Southeast Texas MLS.

 

RiShown below a photo of a flooded and now gutted home in Wexford Park in Vidor. 

IMG_5939

Its not common that the MLS adds a new category of homes.  Thanks to Hurricane Harvey it has.  We now have a category called "Flooded and Gutted".

Flooded and gutted chart

 

There are 30 homes for sale in the category  "flooded and gutted".   The prices are all over the place.  Right now there are no "pending sales" in the MLS of flooded and gutted homes.  Right now the market is trying to figure how to price these homes.  Once there are some sales then we will have a better idea how to price a flooded and gutted home.  My best guess right now is that we will see these homes start to sell around $30/SF.  

 

 

 

 

 

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"As Is" Value of Flooded Homes in Southeast Texas

IMG_5939

 

I ran this post earlier this week.  I'm running it again because a lot of people are asking the question "What is my home worth if I sell it "as is" with flood damage but gutted.  

Here's the chart that I posted earlier this week. 

As Is Value

I've spent the past week driving around showing flooded homes to investors and talking to people who are thinking about selling their home "as is".   My advice is if you have any way (any way at all) to fix your home then you will come out better in the long run selling once it is fixed up.  

The sheer number of flooded homes is going to far surpass the number of buyers who can buy homes in "as is" condition.  

Here's is an example of a homes "as is" value

Pre Flood Value –            $200,0000
*15% Stigma Discount –     $30,000
After repair value –         $170,000
 
*Repair Costs –                     $60,000
20% Investor Profit –         $34,000
 
“As Is” Value -                 $76,000
 
*estimate
 
Now, the next factor to consider is how much inventory there will be of flood damaged homes.  If there are a lot for investors to choose from, this will have a downward effect on the prices.  And vice versa. 
 
Hope this helps.   These numbers are potential starting points for negotiation.  We are using our best guess since we don’t have any recent history to draw from.  Ultimately, the market will determine the sales prices.  
 
If you are considering sell your home and would like a professional market analysis, contact me.  There is no cost for the analysis.  This is a very difficult time for all of us.  Gather as much information as you can before you make any decision regarding your home.
 
Sincerely,
 
Diane
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"As Is" Value of Flooded Homes in Southeast Texas

As Is Value

 

For Example:  

Pre- flood Value –                $150,000
15% Stigma Discount –        $22,500*
After repair value –             $127,500
 
Repair Costs –                         $40,000
20% Investor Profit –            $25,500
 
“As Is” Value -                         $62,000
 
Now, the next factor to consider is how much inventory there will be of flood damaged homes.  If there are a lot of homes for investors to choose from, this will have a downward effect on the prices.  
 
These numbers are potential starting points for negotiation.  We are using our best guess since we don’t have any recent history to draw from.  Ultimately, the market will determine the sales prices.  
 
*This information was provided by Andy Hemmings, Sales Manager with Coldwell Banker Southern Homes.  I've put it in a chart and shared it with the readers of my blog.  
 
If you would like a post-flood market analysis to help determine the value of your home, please contact me for a no cost analysis.  
 
Sincerely,
 
Diane
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Hurricane Harvey Aerial View of Homes in Southeast Texas

Wexford Flooding

If you have wondered why there haven't been posts for the past several days, two words, Hurricane Harvey.   So many areas had flooding that is hard to comprehend.  My home was an island for about five days.  We couldn't leave because there were flooded roads keeping us from going anywhere.  

One thing I found fascinating during the storm was looking at the aerial images taken by NOAA.  This link will show you any address you want to see that was affected by Hurricane Harvey.

Aerial Images of Hurricane Harvey Flooding Homes

So many areas were flooded but some of the worst:

  1. Orange County - Wexford Park, 1131 and Four Oaks Ranch areas
  2. Jefferson  County - Northwest Forest, Pinewood and Bevil Oaks

Look at these addresses.  12755 Tanoak Ln,  427 W Pineshadows,  1865 Wexford Dr

This will give you an idea of how much of Southeast Texas flooded.   The residential real estate market was low on inventory before Hurricane Harvey hit.  It is going to extremely low now and for the next several months while people recover and rebuild. 

If you are looking to buy or sell a home in Southeast Texas, I can help.  

Sincerely,

Diane

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