CA - How A Blistering Housing Market Could Be Making Wildfires Even More Dangerous
Whether it's fires or floods or hurricanes or rising sea levels, climate change is poised to wreak havoc on property and insurance markets throughout the nation.
Plumes of smoke waft through California. Popular vacation spots have become evacuation zones. Neighborhoods are burning to the ground. As the climate changes and rainy days become even fewer and further between, the state is being forced to reckon with a demonic new season sandwiched between summer and fall: fire season, the time of year you wear an N95 mask for reasons other than just a pandemic, and the smoky skies can make it feel like Armageddon.
Yet even in the areas at the highest risk for wildfires, property values seem almost impervious to the fiery destruction. Despite battling catastrophic annual fires, Napa County has seen its median home price rise almost 42% over the last five years, according to data from real estate company Redfin. Sonoma County, another high-risk area for wildfires, has seen its median home price rise more than 40%. And, nestled next to Lake Tahoe, El Dorado County, which has battled the Caldor Fire in recent weeks, has seen its median home price rise almost 60% over the last five years.
Despite fires, the demand for housing in California still dwarfs the supply
Climbing home prices in fire-prone areas may seem strange. There are, after all, many reasons why wildfires should lower property values — the risk of houses burning down, smoke poisoning the air for weeks at a time, charred scenery, skyrocketing home insurance premiums. Studies find fires have a history of reducing an area's housing demand and its property values, especially for homes with ruined views that remind residents of future dangers.
But with its job opportunities, temperate climate and outdoor amenities, Northern California remains desirable, and the supply of homes remains scarce. Housing is so scarce that even if a regular fire season decreases housing demand, an army of eager homebuyers is waiting to snatch up what they consider to be a deal.
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