Tracking Harvey’s Effect on the Luxury-Home Market

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Hurricane Harvey wreaked havoc on Houston and caused billions of dollars in property damage. One segment of the real-estate market, however, was less impacted: luxury homes.

While the number of sales that closed fell markedly after the hurricane, both listing prices and sale prices fell only slightly, according to Multiple Listing Service data from the Houston Association of Realtors. The median list price was down 3.1% and the median sale price was down 2.2%.

For its analysis, the association looked at luxury-home listings, defined as $1 million and up, between Jan. 1 and Aug. 24 and compared data to listings between Aug. 25 and Sept. 11. In its analysis of home sales, the association compared sales between Aug. 7 and Aug. 24 to those between Aug. 25 and Sept. 11.

Only a slight price decrease for luxury homes is predicted in the coming months, says James Gaines, chief economist at the Real Estate Center at Texas A&M University. “We’re expecting it to bounce right back up,” he says. “For the most part, these [homeowners] were able to absorb it.”

Real-estate agent Tim Surratt says he’s fielding dozens of calls from homeowners who are considering listing their flood-damaged homes. He’s also hearing from potential buyers looking to buy a fixer upper. “It’s a juggling act,” says Mr. Surratt, who is with Greenwood King Properties. Those looking to make a purchase are now more concerned about previous flooding, he adds.

Celebrity photographer Evin Thayer is keeping his $1.2 million contemporary home—not damaged in the flooding—on the market. He’s betting that some buyers are eager to invest in a never-flooded home in Houston Heights, which sits on high ground. Despite regular showings, the Mr. Thayer, who is working with Mr. Surratt, hasn’t received any offers. “It’s been quiet,” he says.

More buyers are thinking vertically these days, says Robert Bland of Pelican Builders, developer of the Wilshire, a luxury condo building under construction in the River Oaks District. Ten days after the storm, Mr. Bland signed four contracts for units ranging from $800,000 to $3 million. “In a twisted kind of way, it’s been a plus,” he says.

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