When the Carr wildfire started in California, homeowners were naturally very concerned about the safety of their property. Once the wildfire was contained, about two months ago, most real estate analysts expected a run-up in prices after the smoke cleared. This is what happened in Sonoma County in Fall 2017. However, in the Redding area of California, it’s not happening.
“We are not getting the Santa Rosa response at all here,” said local broker Brad Garbutt. A local homebuilder noted that wildfire-burned lots are “reasonably priced” for the market, unlike in the North Bay area after 2017’s wildfires. Median home prices in Santa Rosa rose 5.5% in March thanks to housing shortages after the fires, and Sonoma County homes added more than $81,000 to their value as well. Furthermore, according to Trulia, in Santa Rosa inbound home searches rose eight percent after the wildfires were contained.
In Redding, local brokers say demand for homes in the area has slowed, although median home prices are still up year-over-year. Between August and September, however, home prices fell 11%. Garbutt reported he had expected about a third of homeowners who lost their homes in the fire would opt to purchase properties elsewhere in the area rather than try to rebuild their old houses. However, “We are not seeing a third of the people going out and buying houses, let’s put it that way,” he admitted.
The issue may be, in part, that interest rates are rising. Rebuilding may be a more attractive option if a homeowner can retain financing obtained when interest rates were at their nadir.
Carr Fire Facts
The Carr fire was the sixth-most-destructive wildfire in California history and the seventh-largest recorded. It caused more than $1.6 billion in damages, and burned from July 23, 2018 to August 30, 2018, when it was reported 100% contained. The fire started when a flat tire caused a wheel rim to scrape against asphalt and created sparks. Redding itself experienced a “fire wheel,” the equivalent of an EF3 tornado spreading the fire, that toppled transmission towers, stripped and “scoured” foliage and growth, and killed three people not in the immediate are of the fire when their home collapsed around them.