More than three weeks after tornadoes tore through Dallas neighborhoods, it’s still too early to gauge the impact on the local property market.
The Oct. 20 storms destroyed or damaged thousands of homes in a swath from northwest Dallas to Richardson and Garland.
The real estate markets in Houston and South Texas saw a significant impact from recent hurricane and flooding damage. The Dallas-area storms weren’t on the same scale, but there will be an impact.
Local analysts expect that the Dallas storms will result in an increase in homebuilding, property sales and apartment leasing — they just don’t know how much.
“A lot of these homeowners will have to find somewhere to live while their house is being rebuilt,” said Paige Shipp of housing analyst MetroStudy. “Some of the more affluent residents may decide to buy.
“There is an assumption there will be a dip in home inventory on the short term in the $500,000 to $1 million range,” she said. “Many of the people in those price ranges don’t want to rent.”
Real estate agents anticipate that residents whose houses have been destroyed or significantly damaged may opt to sell and move rather than wait for a long and complicated rebuild.
“I think you will see an influx of buyers who just decide to buy a new home when they realize what dollars they are getting from the insurance,” said David Nichols of Allie Beth Allman & Associates. “I had one client that said she bought the North Dallas house because of the back yard and all the trees that are now gone.
“She wants to move on.”
Builders may take advantage of the sudden availability of new sites in prime North Dallas neighborhoods if owners decide not to rebuild.
“In Houston, a lot of people sold their properties for lot value,” said agent Barry Hoffer of Ebby Halliday Realtors. “Builders looking for teardowns in the Preston Hollow and North Dallas area may find an abundance of lots.”
Rebuilding blocks of ravaged homes will stress the local construction market, which is already facing labor shortages and rising building prices. But Phil Crone, who heads the Dallas Builders Association, said the number of houses that need to be replaced after the storm is manageable in a market that builds almost 80,000 homes and apartments a year.
“In the grand scheme of things, I don’t think it will make the labor situation any worse than it is,” Crone said. “The biggest delay will come from the cities trying to get the permits and demolition approved.
“We are in a difficult labor market, and things are expensive,” he said. “I’m worried some homeowners may be underinsured.”
Property agents say there has been a scramble to lease houses in some North Dallas neighborhoods.
After Houston’s storms, there was a big jump in apartment leasing. “There was a giant impact in Houston" but it was short-term, said Greg Willett, chief economist for Richardson-based RealPage. “There could be a little bit of an increase in apartment leasing here.”
But it will be nothing on the order of what South Texas communities experienced, Willett said.
“We have lots of brand new luxury rental product close to the areas impacted by the tornadoes,” he said. “Landlords would be very happy to see these people.”
More than 40,000 apartments are being built in the Dallas-Fort Worth area — the most of any U.S. metro area.
Willett said that if October’s tornadoes do move the needle on D-FW apartment leasing, it will be easy to see.
“It’s occurred at the time of year that demand normally slows down in the fourth quarter and we don’t see much leasing,” he said.
