{"id":67049,"date":"2019-11-01T05:00:22","date_gmt":"2019-11-01T12:00:22","guid":{"rendered":"https:\/\/redfindevelop.wpengine.com\/blog\/?p=67049"},"modified":"2021-06-22T12:39:12","modified_gmt":"2021-06-22T19:39:12","slug":"california-wildfire-hazard-risk-housing","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/california-wildfire-hazard-risk-housing\/","title":{"rendered":"Los Angeles, Orange & Santa Clara Counties Are at Risk of Losing More Than $2 Trillion Worth of Housing Value Due to Wildfires"},"content":{"rendered":"

California Redfin agents say this year\u2019s relentless wildfires, along with sky-high insurance premiums and mandatory electricity shutdowns, are causing residents to move away from fire-prone areas and buyers to question purchasing homes in dangerous parts of the state.\u00a0<\/span><\/i>
\nFour counties in California top the list of places at risk of losing the most housing value due to destruction from wildfires. <\/span>Los Angeles County<\/span><\/a>, home to more than $1.2 trillion worth of homes and one of the regions most susceptible to wildfires in the U.S., stands to lose the most housing value. Next come <\/span>Orange County<\/span><\/a> ($502.6 billion in total housing value), <\/span>Santa Clara County<\/span><\/a> ($488.5 billion) and <\/span>San Diego County<\/span><\/a> ($417.6 billion).\u00a0<\/span>
\nAlthough the areas most at risk for wildfires–those that experienced more than 20 wildfires from 1960 through 2016–account for just 4 percent of all U.S. households, those homes account for 8.1 percent of total U.S. housing value, or $2 trillion worth of housing.<\/span>
\nThat\u2019s from a Redfin analysis that aggregates the total value of U.S. homes<\/a> at risk of wildfires and ranks at-risk counties by the total value of homes in that area.\u00a0<\/span>
\nLindsay Katz<\/span><\/a>, a Redfin agent in Los Angeles, said <\/span>this year\u2019s wildfires<\/span><\/a> are impacting local residents more than they have in the past.<\/span>
\n“Southern California is such a desirable area that residents generally put up with the negatives, like several weeks of fire and smoke each year and paying high premiums for home insurance. But I think this year is a turning point,” Katz said. “People who live here and people buying homes here are getting fed up because not only are the wildfires particularly bad right now, but they’ve been relentless over the last few years. In the past, residents would get a few years off between fires and they would kind of forget about them–but we haven’t even recovered from the Woolsey Fire that hit <\/span>Malibu<\/span><\/a> last November and people are evacuating and losing their homes again.”\u00a0<\/span>
\n“A friend of mine was forced to evacuate from her home in <\/span>Westlake Village<\/span><\/a> during the Woolsey Fire, and although her house didn’t burn down, she decided to move to Denver to get away from the threat of wildfires. I also worked with a couple a few months ago who sold their home in Los Angeles and moved to <\/span>Gilbert, Arizona<\/span><\/a>,” Katz continued. “Once you’re impacted multiple times and you know people who have lost their homes, the threat feels more real.”<\/span>
\nTop 10 U.S. Counties at Risk of Losing Most Housing Value Due to Fire<\/b>
\nMany of the most desirable and expensive areas in the country are at high risk for destruction from wildfires. Seven of the 10 counties at risk of losing the most housing value on account of potential wildfires are in California, many of them in expensive areas.\u00a0<\/span>
\nTwo of the remaining three are in Texas, and the other one is <\/span>Clark County, Nevada<\/span><\/a>, home to <\/span>Las Vegas<\/span><\/a>.\u00a0<\/span><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
10 counties at risk of losing the most housing values due to wildfires<\/b><\/td>\n<\/tr>\n
Rank<\/b><\/td>\nCounty<\/b><\/td>\nMajor fires in county, 1960 through 2016<\/b><\/td>\nEstimated median home value of homes in county\u00a0<\/b><\/td>\nEstimated total value of homes in county (in billions)<\/b><\/td>\nNumber of households in county<\/b><\/td>\nYear-over-year change in number of homes for sale (Sept. 2019)<\/b><\/td>\n<\/tr>\n
1<\/span><\/td>\nLos Angeles County, CA<\/span><\/a><\/td>\n42<\/span><\/td>\n$625,200<\/span><\/td>\n$1,219.7<\/span><\/td>\n1,499,576<\/span><\/td>\n-11.9%<\/span><\/td>\n<\/tr>\n
2<\/span><\/td>\nOrange County, CA<\/span><\/a><\/td>\n14<\/span><\/td>\n$709,800<\/span><\/td>\n$502.6<\/span><\/td>\n581,506<\/span><\/td>\n-17.4%<\/span><\/td>\n<\/tr>\n
3<\/span><\/td>\nSanta Clara County, CA<\/span><\/a><\/td>\n6<\/span><\/td>\n$1,110,600<\/span><\/td>\n$488.5<\/span><\/td>\n354,255<\/span><\/td>\n-1.9%<\/span><\/td>\n<\/tr>\n
4<\/span><\/td>\nSan Diego County, CA<\/span><\/a><\/td>\n25<\/span><\/td>\n$606,200<\/span><\/td>\n$417.6<\/span><\/td>\n581,635<\/span><\/td>\n-24.2%<\/span><\/td>\n<\/tr>\n
5<\/span><\/td>\nHarris County, TX<\/span><\/a><\/td>\n6<\/span><\/td>\n$187,100<\/span><\/td>\n$232.3<\/span><\/td>\n837,912<\/span><\/td>\n-2.8%<\/span><\/td>\n<\/tr>\n
6<\/span><\/td>\nRiverside County, CA<\/span><\/a><\/td>\n27<\/span><\/td>\n$364,900<\/span><\/td>\n$196.7<\/span><\/td>\n454,924<\/span><\/td>\n-15.9%<\/span><\/td>\n<\/tr>\n
7<\/span><\/td>\nSan Bernardino County, CA<\/span><\/a><\/td>\n28<\/span><\/td>\n$353,400<\/span><\/td>\n$145.5<\/span><\/td>\n365,576<\/span><\/td>\n-21.6%<\/span><\/td>\n<\/tr>\n
8<\/span><\/td>\nClark County, NV<\/span><\/a><\/td>\n5<\/span><\/td>\n$286,600<\/span><\/td>\n$141.5<\/span><\/td>\n384,239<\/span><\/td>\n16.9%<\/span><\/td>\n<\/tr>\n
9<\/span><\/td>\nDallas County, TX<\/span><\/a><\/td>\n7<\/span><\/td>\n$196,300<\/span><\/td>\n$139<\/span><\/td>\n452,284<\/span><\/td>\n5.2%<\/span><\/td>\n<\/tr>\n
10<\/span><\/td>\nTravis County, TX<\/span><\/a><\/td>\n14<\/span><\/td>\n$355,200<\/span><\/td>\n$113.8<\/span><\/td>\n227,590<\/span><\/td>\n-23.1%<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Redfin agents in <\/span>Sacramento<\/span><\/a> and <\/span>El Dorado<\/span><\/a> counties in Northern California are also reporting a major shift in housing markets located in fire-prone areas, particularly those where premiums for fire insurance are rising and where <\/span>PG&E is cutting power<\/span><\/a> for days on end in an effort to prevent wildfires, something that could continue for decades. <\/span>Debbie Olson<\/span><\/a>, a Redfin agent in Sacramento, said homebuyers and sellers in the area are concerned about the impact of wildfires on home prices and total housing costs.\u00a0<\/span>
\n\u201cEarlier this year, I worked with a couple who was selling their home in <\/span>Auburn<\/span><\/a> [located northeast of Sacramento] and looking to buy in the same neighborhood. But they were priced out because insurance premiums have risen so much due to wildfires,\u201d Olson said. \u201cThey were quoted around $9,000 per year just for fire insurance. Even though the seller offered to pay half the cost for the first two years, my clients ultimately decided to buy a home in a neighborhood that\u2019s less fire-prone to avoid paying such a high premium.\u201d<\/span>
\nEllie Ruiz Hitchcock<\/span><\/a>, a Redfin agent in El Dorado County, located between Sacramento and <\/span>Lake Tahoe<\/span><\/a>, said the housing market is adapting to the wildfires and mandated rolling blackouts this fall. As buyers become more nervous about purchasing homes in fire-prone neighborhoods, sellers are getting creative with incentives, offering things like covering the cost of fire insurance, trimming trees and brush to create a defensible space and, as a last measure, lowering the price of their home.\u00a0<\/span>
\n\u201cIt hit me about a month ago that the new normal in our area includes scheduled electricity blackouts to allow utilities time to rebuild and upgrade infrastructure, which is giving buyers pause but will help property values in rural communities in the long run,\u201d Hitchcock said. \u201cSellers are struggling right now as often the best-case scenario is settling for a lower sale price than they would have gotten a year ago, and the worst-case scenario is holding off on entering the market until the fires and blackouts settle down. That\u2019s a tough conversation for agents to have with sellers, and one that\u2019s gotten very real in the last six months. It\u2019s going to be some time before rural sellers feel stability back in the market, but I\u2019m hopeful that time will calm the nerves of buyers.\u201d<\/span>
\n\u201cOne scary component is that even highly sought-after country-club communities within one mile of rural cities are feeling the impact. One is <\/span>El Dorado Hills<\/span><\/a>, a high-end community located an hour drive from Lake Tahoe,\u201d Hitchcock continued, noting that while El Dorado Hills isn\u2019t any more fire-prone that other parts of the county, it is impacted by the rolling blackouts. \u201cThere are far fewer homes sold<\/span> in that area than there were last year, and that\u2019s in great part due to the fear of fires and the cost of associated insurance<\/span>.\u201d<\/span>
\nThe seven counties at risk of losing the most housing value due to wildfires are also places where housing supply is declining annually. For instance, supply was down nearly 12 percent year over year in Los Angeles County in September, and it declined more than 17 percent in Orange County. Wildfires in those areas could exacerbate the housing shortage, partly because many homeowners are <\/span>choosing not to rebuild<\/span><\/a> after their homes are destroyed.\u00a0\u00a0<\/span>
\nThe average acreage burned by wildfires annually in the U.S. has nearly doubled since the beginning of the century, from 4 million between 1990 and 2000 to 7 million between 2008 and 2018.\u00a0<\/span>
\n“Homes in places like Malibu, the hills around Los Angeles and wine country in Northern California have historically been desirable because the natural beauty of the surroundings has outweighed the risk of natural disaster,” said Redfin chief economist Daryl Fairweather<\/a>. “But with homebuyers and sellers in fire-prone parts of California really starting to feel how environmental risk factors are impacting both the safety and value of their homes, long-term demand will change, though California overall is unlikely to lose its luster. Demand and prices for homes in fire-prone areas will go down, but as a result they\u2019ll increase in safer parts of the state. California is in the midst of a housing shortage, and the state should take wildfire risk<\/a> into account when deciding where to focus its building efforts.\u201d<\/span>
\nCheck out the interactive map visualization below to see the risk of fire by county across the U.S.\u00a0<\/span><\/p>\n