30
WHERE
WILDFIRES BURN,
ALL-CASH BUYERS
SOON FOLLOW
More often than not, the scourge of a wildfire
does not end when the flames are extinguished,
and the consequences of losing your home can
last for years.
According to a new study by Redfin, in the
three years following a fire, home prices only rose
by 21% on average while homes outside of the
wildfire area grow by 33%.
According to report authors Lily Katz and
Sebastian Sandoval-Olascoaga, in areas within
fire perimeters, home purchases declined by 38%
in the following three years. is is due to the
lack of available properties that are available to
sell.
Buyers are also leery of returning to areas
that went up in flames. Areas inside of a wildfire
perimeter saw purchases drop by 43%, while areas
outside of the fire perimeter only dropped by 3%.
"Like much of the U.S., California is facing
an acute housing shortage. at means there are
often intense bidding wars for the homes that are
for sale—even those in fire-prone areas—which
contributes to the rise in prices," Redfin Chief
Economist Daryl Fairweather said. "e wildfires
themselves are also making housing more
expensive. After a town burns, builders come in
and construct new homes, which are typically
more expensive. And homeowners who stay
frequently invest in making their homes more
fireproof, which increases property value."
According to the report, all-cash offers after
a fire also increase by 17% due to new builders
and investors entering the local market taking
advantage of the circumstances. And when
homes are rebuilt, they are typically rebuilt with
luxuries and fire-resistant materials, which also
drives up costs.
"In the Napa Valley, builders show up right
after fires happen. Communities want to rebuild,
so local authorities tend to fast-track permits and
design reviews, and push properties hit by fires to
the front of the line," said Christopher Anderson,
a Redfin real estate agent in Napa, California.
"ey build homes in four to six months after
fires, whereas normally it can take a year and a
half for a builder to get a shovel in the ground."
Journal
