Local real estate after Harvey
By: Coral Dworaczyk
Hurricane Harvey has impacted every life in the Coastal Bend in one way or the other. Some through the devastating losses of life and property, and others emotionally or financially, but all significantly. Even as we continue to strive to return to some sort of normalcy and routine, it is interesting to see how Harvey has impacted and will continue to impact the real estate market for years to come.
The September sales data (provided by the Corpus Christi Association of REALTORS) for our region is the most current data report available at the time this article went to press. Overall, the overall Nueces County and Corpus Christi-specific markets are holding steady.
In Nueces County, the median sales price is down only 0.3 percent, the active number of listings are up 4.2 percent and the total number of closed sales is down 14.1 percent, all compared to September of last year. In Corpus Christi alone, the median price is up 1.7 percent, active listings are up 8.7 percent and closed sales are down 6.4 percent, also compared to September 2016.
Jim Wells County is showing similar trends, with an increase in sales prices of 8.7 percent, an increase of 14 percent in active listings on the market and a slight drop in the number of closed sales (6.7 percent). Without a doubt, Port Aransas has shown the greatest significant decline in sales since Harvey, with only four transactions successfully closing, and, sadly, our Rockport neighbors are likely experiencing similar challenges.
If you are considering buying or selling a property that was affected by Harvey, there are some important considerations you should keep in mind. Sellers: Do not be afraid to explain how you repaired your property, or chose not to repair your property. The biggest issue will always arise from a lack of true and honest disclosure about a property’s condition and damages. Buyers: Do not be afraid to ask how a property was repaired and who did the work, and plan to always employ a full round of inspections to make sure you know what you are buying.
As we are learning, bad things can happen to properties, but thankfully, they can be repaired and renovated to be returned to a safe and useable condition. All parties just need to be aware of the realistic circumstances surrounding a transaction.
Thousands of properties in Texas were under contract before Harvey made landfall, and many are now in a state of limbo due to both major and minor damages incurred. Per the Texas Association of REALTORS’ One to Four Family Residential Contract (Resale), the seller is responsible for making repairs to restore a property to its previous condition as soon as reasonably possible. If this is not possible, the buyer may:
• Choose to terminate the contract and receive a refund of their earnest money
• Extend the time for performance of the repairs for up to 15 days (which may also extend the closing deadline)
• Accept the property in its damaged condition with an assignment of any insurance proceeds, if permitted by the insurance carrier, and receive a credit from the seller at closing in the amount of the deductible
Keep in mind that the property must still meet any lender’s underwriting requirements of property condition, so the last of these options may not always be available to all buyers.
Landlords and tenants should not be overlooked under our current circumstances, especially considering the huge number of people who are displaced from their regular housing and seeking rental properties. Many have inquired regarding the legality of terminating leases (by either the landlord or the tenant) post-Harvey. If the subject property is deemed to be partially or completely uninhabitable, the Texas Property Code Section 92.054 explains acceptable procedures.
First, if the damage from the casualty loss leaves the property “totally unusable for residential purposes,” and the tenant is not responsible for the loss, either the landlord or the tenant may terminate the lease by giving written notice to the other party property to the completion of repairs.
If the property is “partially unusable for residential purposes,” and the loss is not caused by the tenant, the tenant is entitled to a reduction of rent in an amount proportionate to the extent of the property that is unusable, but only upon a county or district court judgment. In this case, the landlord and tenant may agree otherwise in a written lease. In regard to timely repairs to an insured casualty loss to a property, the period for the repairs does not begin until the landlord receives insurance proceeds.
Regardless of the circumstances, the most in-demand commodity in the local real estate industry right now is patience. Whether you are selling, buying or leasing, these are trying times, but an objective, yet tolerant, mind will help most navigate their transactions. Please remember to also consult your real estate attorney for any legal guidance.
For more information, contact Coral Dworaczyk, M.S., Ph.D., REALTOR, at 979-229-2836 or www.realestatebycoral.com.