How Will The SoCal Fires Affect the Playa Vista Real Estate Market?
For the past week, Ventura County and Malibu have been suffering from one of the worst fires these locations have ever seen. While the Camp Fire in Northern California is the most destructive ever in terms of loss of life and property damage, the Woolsey Fire located in Malibu, and Southern Ventura County has been no joke either. As of this morning, 370 structures have been destroyed by this fire, many of these are residences. Many more structures are still in jeopardy.
The question a lot of my clients are asking is how will this affect the real estate market in Playa Vista or elsewhere. My answer is in the short term, this creates more demand. Many of the people who lost homes will need to find a place to live and the short term answer will be rentals in the non-affected areas. I have already received calls on my lease listings from agents of homeowners who have lost their homes looking to move into a rental quickly. Rentals will be where there is the greatest increase in demand and this event should not lead to a noticeable up-tick in sales since most homeowners with the financial capabilities or lack of financial sensitivity to immediately purchase another property as the result of a natural disaster probably already have another home to live in.
In the long run, these fires, as well as the seemingly yearly blazes that impact Southern California, will likely have a negative impact on the real estate market in rural and hillside areas and probably a net neutral impact in urban areas such as Playa Vista. The high probability of a fire not only scares potential or existing residents, causing them to live elsewhere, but it dramatically increases the price of insurance. The result of this will increase demand for homes in the more urban areas of the city with lower fire danger, such as Playa Vista, relative to rural and hillside areas, ultimately increasing prices at a faster rate than areas more susceptible to fires. Don’t get too excited as much of this may be nullified by people choosing against living in California entirely due to fire danger. Some people who lost their homes may not re-build and some may be hesitant to build in the first place. This will lead to an overall net decrease in population due to fewer people owning properties in the hillside and rural areas, which reduces tax revenues that are essential for fire fighting in the first place or because of higher taxes levied on those who remain to make up for this lost revenue.