In 2017, more than 505,000 acres of land burned in the state of California due to wildfires. Santa Barbara County, as well as Ventura County, were affected by the recent wildfires. A wildfire can cause devastating damage to property, with home and business owners left with complete overhauls needed of property, with millions needed to be spent in order for the region to recover. Because of the recent California wildfires, like the Thomas fire that took place last month, California’s real estate market will be affected.
For potential investors in California, the region may be looked at as a risk due to the recent wildfire damages. Investors may be leery to invest in property within the state, particularly in the regions where the wildfires took place. This can cause a downturn in the real estate market and essentially see prices for property go down, rather than increase.
Current California Property Owners
With current property owners in the state, you have two groups, those who suffered damages due to wildfires and those who did not. For those who did not suffer any damage, the property owners may be looking to get out, due to fear of fire in the future. This can lead to the potential for new investors to be able to purchase the property at a premium price. If investors want out, they may sell below the value of the property, just to avoid the risk they see due to potential wildfires.
Also, current property owners who suffered damage due to wildfires must be considered. The real estate market can be affected by those owners who look to get out of the region, rather than rebuild. Some property owners may be too afraid to start over after the wildfires, due to potentially losing their property yet again. However, there will also be property owners who seek to rebuild and stay in the area after the wildfires have been put out.
With a rebuilding period, comes opportunity. Buyers may be looking to scoop up properties at a lower price while developers may be looking at communities for a complete overhaul. The use of the land can change or stay the same, depending on who is in charge.
Overall, when wildfires occur in a state, the real estate landscape can change. The real estate environment is susceptible to the decisions made by current property owners, both those who have property that was damaged due to the fire as well as those who did not see damage take place. For investors, it is a good time to consider moving into the region as prices can be low and investment opportunities vast.