We like to think of change as being steady and continuous. For instance, we get a little bit older each year, and depending on our age, we get a little bit stronger or weaker.
A “State Change” in Peoples’ Lives
But in nature, the major changes are not steady and not continuous. They are sudden, jarring and dramatic. They involve toggling from one “state” to another. For instance, water is a liquid until the temperature drops to 32ºF; then it becomes a solid. A tenacious leaf hangs on the tree through spring, summer and fall, until a winter storm finally blows it to the ground. Snow piles high on the mountain until weight and temperature … create an avalanche.
So it was with many Kingwood seniors – safe and comfortable, living a somewhat privileged existence in the center of Kingwood…right up until the moment a monster named Harvey crept under their front doors.
Bill Fowler, a real estate expert, worked for ExxonMobil until he retired. He is now co-chair of the Lake Houston Area Grass Roots Flood Prevention Initiative. Fowler has been analyzing the impact of Harvey on local real-state. Recently, he concluded an analysis of home values in The Enclave. This post is based on his hard work.
About The Enclave
For those of you not familiar with the Enclave, it is an upscale subdivision in the heart of Kingwood, south of Randall’s in Town Center. Homes average 2369 square feet. All but one or two are single story. Most of the homes are zero-lot-line or have postage-stamp yards, perfect for empty nesters who hate mowing lawns.
Enclave residents can walk to shopping, restaurants, banks, drug stores, public transportation, the library, parks, trails and more. Virtually all are on a series of short cul-de-sacs where people get to know their neighbors for an exceptional sense of safety and security.
In the Heart of the Heart of One of Houston’s Most Prestigious Communities
For all the reasons above, the Enclave has always been popular with older people approaching or reaching retirement. People didn’t just move there, they put down roots there. A home in the Enclave put you in the heart of the heart of one of Houston’s most prestigious communities.
- Of 165 homes in the Enclave, 74% had over-65 exemptions on their real-estate taxes in 2017.
- According to the National Association of Homebuilders, 12% of Americans have lived in their homes for 20-29 years; but 35% of Enclave residents have lived there that long, virtually triple the national average.
- Half of the residents have owned their homes for at least 13 years.
- Despite the age of the residents, many years have gone by with less than five homes changing hands.
- While 11.2% of Americans moved in 2016 (a historical low), only 3.2% of Enclave residents moved that year, about one fourth of the national average.
Then Came Harvey
Things changed suddenly. All 165 homes in The Enclave flooded. Harvey uprooted all residents – at least temporarily.
Forty-four owners sold damaged homes “as-is” that were their primary residences. We know they were primary residences because they received Homestead Exemptions from the Harris County Appraisal District [HCAD]. Thirty percent of all owners decided to bail (pardon the pun) rather than go through the challenge of restoration: ten times the percentage that moved the prior year!
Sixteen additional homes in the Enclave did NOT have homestead exemptions, according to HCAD. This indicates they were being rented or leased. It is highly unlikely that renters would return to damaged homes; they had no equity, only risk.
So if we add those sixteen to the other 44 homes, we have 60 homes where residents likely chose not to return after Harvey. That takes the percentage of those not returning up to 36% of the community. Twelve times the prior year’s rate!
Due to limitations of the available online HCAD data, it is not possible to further delineate the demographic makeup of the non-owner occupied homes.
However, it is interesting to note the following about those over 65:
- 74% of all owners had an Over-65 exemption before Harvey.
- 89% of owner/residents choosing to sell were over 65. This indicates the flood was disproportionately harder for older people to deal with.
- 36% of all primary-residence homes owned by those over 65 were actually sold.
- Of those over-65 electing to sell their homes, on average, the owners had lived in their homes 15 years—some as many as 25 years.
- 49% of primary-residence homes sold by those over 65 were owned by a single owner (divorced, widowed or never married), rather than jointly owned.
- Eighteen homes remain for sale or rent, many by owners rather than through agents.
- The total HCAD value for all 165 homes in the subdivision dropped from $40.7 million before Harvey to $30.4 million after. Owners lost more than 25% in market value due to Harvey.
- The City, County and School District lost more than $10 million in assessed value from this one subdivision.
- The average home went from $247,000 in value to $184,000, a loss of $63,000 overnight.
- Those who chose to stay and repair their homes, but who didn’t have flood insurance, lost even more.
Fourteen months later, construction trucks still line the otherwise quiet streets and driveways. The shrill whine of circle saws still pierces the afternoon calm. Construction permits still dot the windows of empty homes. Eighteen homes remain for sale.
Waiting for Mitigation
Retirees who lost their largest investment pray the politicians aren’t playing games with flood mitigation. Dredging has started, but is leaving the largest blockage in the river where it will do the most damage in another flood. More flood gates for the Lake Houston Dam are still two or three mayors away. Most residents won’t live long enough to see the benefit of additional upstream detention. And the grant application for a watershed study that’s a pre-requisite for all of those mitigation projects? Well, that has been sitting on someone’s desk at FEMA for seven months.
The residents I have talked to say they will rebuild this one time, but never again. More on that later this week in another Impact interview.
Statistical Analysis by Bill Fowler, Co-Chair, Lake Houston Area Grass Roots Flood Prevention Initiative
Posted by Bob Rehak on November 2, 2018
430 days since Hurricane Harvey