The wildfires in California have been devastating to the state for many reasons, including excessive property damage, loss of lives, and destruction of numerous vehicles and equipment. Understandably, the real estate market has been significantly affected by the fires.
At this point, experts have declared that almost 90,000 homes in Los Angeles county and Ventura county are at risk of facing damage from the fires. Almost 14,000 of these have been declared high risk homes, meaning it’s even more likely that the fire will cause damage to the property. The homes in Southern California are some of the most expensive real estate in the country, so this potential damage would be incredibly costly. Experts have estimated that the cost could be close to 30 billion dollars.
At a recent estimate, the fires have already destroyed or at least damaged thousands of homes and businesses all over the state. The number could be above 20,000 at this point.
The problem is that many of the victims cannot afford to rebuild their homes, so they are being forced to relocate. Even people with insurance may not be able to get the amount of money they need to rebuild, especially because construction prices may skyrocket in light of the increased demand for housing in the region.
Additionally, many of the areas that have been affected are desirable areas of the state where there are very few vacant properties. So, even if people could afford to stay, there simply would not be space for them. This could mean that there will be a surge of people buying or renting homes in other parts of California that have not been affected by the fire and are cheaper places to live.
Those who are looking to sell their homes that have survived should expect a 10 to 35 percent decline in selling price. After all, a majority of buyers probably would not find it appealing to live in areas where much of their surroundings have been destroyed, or where there are few services.
Homes that have been charred or partially destroyed will likely sell for less than half of what they are worth, meaning investors and individuals looking to buy and flip homes will swoop in. However, this dip in prices will not last forever. Some estimates state that after about five years things will return to normalcy as the areas are improved.