Just two months ago, nearly 27,000 residents of Paradise in Butte County, Calif., fled the all-consuming flames of the Camp Fire, which broke out on November 8, killing at least 86 people in the region and destroying nearly 14,000 homes—an estimated $11-$13 billion in residential and commercial losses, according to CoreLogic data.
A substantial number of buildings and structures in the town of Paradise are gone; the spirit of the community, however, lives on with surviving residents and members of the surrounding towns. While concerns and uncertainty linger, nearby real estate markets have already experienced vast fluctuations.
Where Did Paradise Residents Go?
With the fires extinguished, residents of what was once the town of Paradise, now largely a mix of ash and rubble, are having to make significant long-term decisions: stay and rebuild in Paradise, or relocate.
According to Becky Prater, broker/owner of Becky Prater Real Estate in Chico, and Dennis Geare, branch manager for HomeSmart ICARE Realty in Grass Valley, the markets surrounding Paradise are seeing substantial changes in buyer, seller and renter activity, home values and inventory.
First and foremost, those left homeless by the fire had to find short-term housing before making more permanent decisions. While many are still living in shelters or staying with friends and family, the rental markets of the neighboring towns have seen big changes.
“There are basically no rental units left in Butte County; most survivors are living between 45-100 miles away from Paradise,” says Prater, emphasizing that any available vacant rental was gone within 72 hours of the fire. “This is also causing increased traffic, traffic accidents and heighted stress levels of all of our residents.”
A Ripple Effect
An unexpected result of the sudden need for short-term rentals? Chico and surrounding towns are experiencing a spike in seller activity and, therefore, in renter evictions.
“Chico renters are being evicted because their landlords are selling their homes to take advantage of the current market increases. These renters also have nowhere locally to live and are not qualified to get any FEMA disaster funds like those coming from the affected areas,” says Prater.
Geare has also seen a growing interest in relocation, not only from local residents looking to sell and move to other areas that may be deemed “safer,” but from incoming Paradise residents who are looking to purchase elsewhere rather than rebuild.
Prater believes virtually most individuals impacted by the Camp Fire are looking to relocate permanently, as the thought of rebuilding in the fire-prone areas is “scary and not something they can imagine.”
“We are seeing quite a few clients coming up from Paradise who are looking for roofs over their heads, generally in the lower price range of about $280,000-$350,000,” says Geare. “This is putting timing pressure on buyers in that category. Good houses are snapped up quickly, sometimes in as little as 3-6 days.”
The Markets Shift
There’s been a noticeable change from the pre-fire housing market to today’s demanding real estate environment. Immediately following the fire, Prater saw a sharp decline in inventory.
“We had a relatively tight market pre-fire, with 226 homes on the market in Chico on November 7. In the two weeks after the fire, our inventory shrunk to 41 homes on the market, and the few builders we have in Chico with subdivisions sold out of all available inventory and phases of lots not even finalized yet,” she says.
Now that the urgency has waned, inventory is starting to grow once again, also being spurred on by homeowners who are afraid of being caught in similar circumstances by living in fire-prone areas, or by those who understand there is still a growing need for housing in the area, which could lead to quick and profitable sales.
“As of [press time], we have 107 homes on the market, and even during the holidays homes were coming on the market. Those thinking of selling in the spring or anyone with a vacant home were getting their homes on the market,” says Prater. “This demand has caused an almost immediate increase in value of between 10-20 percent. Most homes in good locations and conditions are selling within days and at prices considerably over the seller’s asking price.”
As homeowner insurance checks are disbursed, more and more Paradise residents are becoming cash buyers in nearby towns, or are using the funds as significant down payments, as well as to purchase essentials such as clothing and home furnishings, says Prater.
While Geare is not located in the immediate vicinity of Paradise—instead about an hour away from the town—he has also felt market changes.
“We have a remarkably stable market here in Western Nevada County. Months of inventory based on closed sales has increased from 2.5 months a year ago to 5.5 months as of November; price-per-square foot is up slightly from $218 to $234; and days on market is stable at about 53 days,” says Geare.
Real Estate Community and Locals Come Together
Geare and Prater have both witnessed an outpouring of assistance in the aftermath of the destructive fire. From REALTOR® and Association participation to community involvement, the surrounding towns have come together in support of those affected.
“I’m so proud of our local, state and national Associations of REALTORS®. All have stepped up in donations, grants and personal help,” says Prater. “Our local Association, the Sierra North Valley Association, has donated thousands of dollars in cash, gift cards, clothing, furnishings, and more. Our state Association made $2,500 in grants available to local REALTORS® and others.”
Geare’s office also accepted donations for new items of clothing, gift cards and various other essential items that were delivered to Chico to be distributed to those in need.
“Other broker offices collected donations, as well,” says Geare. “Our five Rotary clubs made donations and ran crowdfunding campaigns—fundraising was everywhere. One local jewelry store ran a watch battery campaign, donating the proceeds to assistance efforts. The community outpouring is just too extensive to recapitulate.”
An Unescapable Truth
The fires may be out, but this devastating event will have long-lasting effects on not only those directly affected, but on residents of nearby towns who are helping to rebuild a fragmented community.
“This horrific event has forever changed the way that our local communities will live,” says Prater. “Our immediate goal is finding housing for as many possible. The long-term goals are rebuilding a community with better housing protections for fire safety and a community that will be able to sustain itself.
“The financial and emotional impact on all of us is still hard to quantify even today, almost two months after that date that will forever be etched in our minds for those who escaped with their lives and for those of who lived in black smoke for days and witnessed the fire,” adds Prater.
Liz Dominguez is RISMedia’s associate content editor. Email her your real estate news ideas at email@example.com.