How the recent fires have impacted our Real Estate market

by arlene on October 9, 2020

With anxiety already high from the pandemic and the election, the fires became the final straw for some clients who now plan to leave the state, or at least leave the highest fire-risk areas of California. Others were only temporarily dissuaded from looking at properties during periods of extremely bad air quality. And many, while expressing concern about the fires, will consider the long-term picture and be reminded just how wonderful is their current community. The specific impact of the fires of course depends on how close you are to them, both physically, and in time.

For properties very near the fires there are new issues during transactions:

lenders are conducting drive-bys before funding to be sure the structure is still standing. Obtaining fire insurance now requires that the property be a certain distance from an active fire, and the fire must be largely contained before a policy will be issued. In the Berkeley/Oakland/Alameda area where I work, many buyers are actively avoiding the hills for new purchases. This is not a new trend, just a more pronounced one. Insurance will be a factor for many residents, even in areas not previously considered high risk. In high fire zones insurance became substantially more expensive and more difficult to obtain after last year’s fires; that trend continues. All California residents should review their coverage, and

be sure that is both accurate and adequate to cover you should you need to file a claim.

At the same time there are buyers who purposely are purchasing in hill areas of Berkeley and Oakland, believing they are getting a better value by being contrarians.

All of us have gained a new appreciation for two things: air conditioning, even in the areas of normally temperate weather. And all of us have gained further appreciation for the first responders fighting horrific fires, and helping to preserve communities. These are true heroes!

[This is an expanded version of the response I shared on SF Gate last weekend. You can see the original post here. I’m the final entrant in the on-line version.]

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