An article that details some of the impact from the fires. The area had a 1% vacancy rate, so for people who got burned out, there is no place to go. If only half of the residents rebuild, then there will be ample opportunities for new people to get in, but at what price?
https://www.realtor.com/news/trends/wildfires/
An excerpt:
The median home price in Napa County was a whopping $876,200 on Sept. 1, according to realtor.com® data. In neighboring Sonoma County, the median home price was $750,000. But that was before the fires.
More than 172,000 homes are now at risk of going up in flames in the Napa and Santa Rosa metropolitan areas, which are usually not prone to wildfires, according to an analysis from CoreLogic. (Napa is the name of a town as well as of the surrounding county.) It will cost an estimated $65 billion or more to rebuild them.
Californians are just beginning to come to grips with the scope of the disaster.
“Multiple neighborhoods are burnt out,” says Randall Bell, CEO of the national real estate appraisal firm Landmark Research Group, based in Laguna Beach, CA, which has assessed areas damaged by wildfires. “It’s street upon street of just charred-to-the-ground moonscape. All you see are chimneys and foundations. It’s a sad sight—and you see hundreds of them.”
Only about a quarter to half of the original residents whose homes were reduced to ash are likely to return and rebuild, Bell predicts.
“Emotionally they’re overwhelmed. Financially, they’re overwhelmed,” he says. “When these fires come through, they don’t just burn houses. They burn stores, restaurants, the churches, the schools. They burn everything. You may rebuild a house, but where’s your infrastructure?”
Lee, the real estate agent whose Santa Rosa home burned down, doesn’t plan to rebuild. He and his wife plan to move to Kentucky, TN, or North Carolina, where they have friends who might be able to find him work.
“I’ve started an insurance claim and hopefully I’ll do well. … [But] I’m a real estate agent and there’s nothing to sell anymore,” he says. “I’m starting over from scratch at 63 with achy joints and an achy back.”
Even homeowners with insurance premiums may not get enough money to rebuild their entire homes to what they were before, Bell says. That’s because the price of construction is likely to skyrocket with the extra demand for construction workers, for which there is currently a national shortage compounded by Hurricanes Harvey and Irma, and building materials. Some will get loans, others will tap into their savings.
Those who do rebuild are in for the long haul. The area is expected to recover only about 10% to 15% each year, according to Bell. That means it’s likely to take five to 10 years before homes, businesses (including employment and tourism), and the local infrastructure is back to normal.
Plus, they’ll have to find a place to live while they rebuild—which won’t be an easy feat.
“We had a housing crisis before the fire,” says Santa Rosa–based Realtor® Daphne Peterson, of Keller Williams Realty. “We’re in a very high-cost area. Our vacancy rate was about 1%. Now we’ve lost about 1,500 to 2,000 homes. We have no place for people to stay.”
Homeowners who decide to sell won’t have it easy, either. Those whose homes survived should expect the properties to sell at a 10% to 35% discount. That’s because it’s not as desirable to live near burnt-out houses or with fewer services and businesses nearby.
“People don’t buy a house,” Bell says. “They buy a neighborhood.”
Meanwhile, properties whose homes were charred or destroyed altogether could see discounts as high as 60%, he says. Sellers should expect an army of investors, a combination of home flippers and landlords, to swoop in.
But the price breaks won’t last forever. These will likely dissipate after about five years, he says.
Reminds me of a couple of news stories a while back:
http://www.latimes.com/business/la-fi-richfire26oct26-story.html
http://www.latimes.com/business/realestate/la-re-fire25nov25-story.html
For ya’ll who live amongst fire tinder, it’s not a matter of “if.”
It’s “when.”
Buying fire retardant and an applicator probably costs less than your fire insurance deductibles. Insurance companies should give discounts for customers who buy it, and are trained to apply it. These fires are just ridiculous. No good reason for so much destruction.
Nothing worse than just standing around waiting to get your ass kicked.
I have a feeling a bunch of Silicon Valley money will come to the rescue.
After the Oakland Hills fire of 1991, you could buy hillside view lots for $50k, which was cheap even then. It took years to get the houses rebuilt. Tough too find a contractor and building costs skyrocketed.
Unless we have a recession, I would expect some turnover, especially of properties where people died or the house was the only valuable asset, but there is a lot of money up there and my guess is the majority will rebuild.
here is a lot of money up there
We’re older now, and the entire neighborhood is gone. Those who rebuild first will be living in a construction zone for 3-5 years.
There are more speculators now – flippers looking for the big game. If it is competitive enough, and eventual home prices estimated to be the same as before, then owners might get a good enough bid to take their money closer to the grandkids, move to another area, or travel a while.
Joslyn isn’t sure if they will rebuild on the land, or when.
“It’s up to my wife,” he said. “She was thinking maybe not [because] she can’t deal with the emotion of it.”
Even if they do, it could take years. Joslyn thinks he’ll only get about half the value of the house from his insurer, with the other half going to the bank to cover the unpaid portion of the mortgage. He’s not sure it’s even worth building anew.
http://www.latimes.com/local/lanow/la-me-santa-rosa-fire-react-20171013-story.html