Redfin Reports Price Growth Slows in Wildfire-Struck California Towns
According to a Redfin report, home prices in wildfire-hit areas rose by an average of 21% over three years, compared to 33% in surrounding areas. Home purchases in affected areas dropped 38%, initially plummeting 43% the year after fires, but recovering to a 29% decline by year three. Cash purchases surged 17% in these zones, driven by investors and builders. Consequently, 595% more homes were built in fire-impacted regions, while property-tax revenue fell 6%, contrasting with a 12% increase elsewhere.
- Home prices in wildfire-hit areas increased by 21% over three years.
- Cash purchases rose by 17% in affected areas, indicating strong investor interest.
- Home construction surged by 595% in directly impacted regions.
- Home purchases in wildfire-impacted areas dropped by 38% on average.
- Initial home purchases plummeted by 43% in the first year post-fire.
SEATTLE, Oct. 6, 2021 /PRNewswire/ -- (NASDAQ: RDFN) — In the three years following major fires, home prices rise
In the areas within the fire perimeters, home purchases declined by an average of
"Like much of the U.S., California is facing an acute housing shortage. That 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," Fairweather said. "The 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."
Cash Purchases Jump
In areas directly impacted by the fires Redfin analyzed, there was a
An increase in home and land purchases by investors and homebuilders—who frequently pay with cash—is likely the driving force, said Christopher Anderson, a Redfin real estate agent in Napa, CA, which was hit by the Tubbs Fire in 2017.
"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," Anderson said. "They 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."
In the areas Redfin analyzed that were directly impacted by fires, there was a
Builders wouldn't be rebuilding homes in high-risk areas if they weren't confident people would move in, and research shows that they're right. More people are moving in than out of areas facing high risk from wildfires and other natural disasters tied to climate change, according to an August Redfin report.
Recovering lost tax revenue is another incentive that drives communities to rebuild quickly after wildfires, Fairweather said. In the areas Redfin analyzed that were directly impacted by fires, property-tax revenue dropped
To view the full report, including charts and methodology, please visit:
https://www.redfin.com/news/california-wildfire-housing-market-impact
https://www.redfin.com/news/climate-migration-real-estate-2021
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, instant home-buying (iBuying), rentals, lending, title insurance, and renovations services. We sell homes for more money and charge half the fee. We also run the country's #1 real-estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can take an instant cash offer from Redfin or have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than
For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.
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SOURCE Redfin
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