ClosingCorp estimated that there is more than $7 billion in loan value and $60 million in service fees and transfer tax revenue at risk due to recent wildfires in California.
This basis of the report is “in-flight” residential mortgage applications in the FEMA designated areas for the Easy, Getty, Kincade, Saddleridghe, and Tick fires. An “in-flight” mortgage application are mortgages due to close between October 24, which is when FEMA initially declared the fire and the end of the year.
Redfin previously reported that Los Angeles, Orange, and Santa Clara Counties are at risk of losing more than $2 trillion worth of housing as a result of the fires.
Los Angeles County has 1.49 million households valued at $1.2 trillion, with an estimated median home value of $625,000. Orange County has a total housing value of $502.6 billion, with a median home value of $709,800.
“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. “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’ll increase in safer parts of the state. California is in the midst of a housing shortage, and the state should take wildfire risk into account when deciding where to focus its building efforts.”
The San Francisco Chronicle reported Wednesday that the Kincade Fire that burned Sonoma County was 100% contained.
The 77,758-acre blaze began on October 23 and destroyed 374 structures, including 174 homes. Another 60 structures, including 35 houses, were damaged. Four firefighters were injured fighting the wildfire.