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Wildfires and Their Impact on the Housing Market

Hurricane season in the Atlantic Ocean is underway and the star of another summer in the west is a cause for concern for CoreLogic, as it revealed more than 500,000 acres were burned by wildfires during the first six months of 2019.

According to CoreLogic, the estimated value of property loss associated to the Camp Fire in California in late 2018 is around $11 to $13 billion, and the Tubbs Fire in October 2017 had losses between $5 to $7 billion. 

The Camp Fire destroyed nearly 20% of single-family housing in Butte County, and the Tubbs Fire burned 6% of single-family housing in the city of Santa Rosa, California. 

CoreLogic revealed that within the first three months of the natural disasters, mortgage default spiked. The serious delinquency rate on mortgage in Sonoma County increased 50% and Butte County saw a 70% jump. 

Rent and price growth accelerated in both Sonoma and Butte Counties followed the disaster, with prices jumping 4% to 7% points higher than the statewide average. 

Natural disasters also impact home prices, housing stock, and the increased demand for shelter. While home sales in Butte County increased 50% during Q1 2019 from a year earlier, sales fell 19% in the rest of the state. Sales also fell in Paradise, California, an area where the fire caused mass destruction. 

With that being said, CoreLogic noted that the acreage burned so far in 2019 is well below the 10-year average, year-to-date. 

Although CoreLogic’s latest Loan Performance Insights Report revealed mortgages delinquent more than 30 days fell to 3.65 in April, areas impacted by natural disasters are still struggling. 

"Thanks to a 50-year low in unemployment, rising home prices and responsible underwriting, the U.S. overall delinquency rate is the lowest in more than 20 years,” Frank Nothaft, Chief Economist for CoreLogic. “However, a number of metros that suffered a natural disaster or economic decline contradict this national trend. For example, in the wake of the 2018 California Camp Fire, the serious delinquency rate in the Chico, California, metro area this April was 21% higher than one year ago."

According to March’s report, the largest annual gains in serious delinquency rates came in areas impacted by Hurricanes. Panama City, Florida, had the largest increase at 1.9%. 

Panama City once again posted the largest annual rise in serious delinquency rates with a 1.4% increase. Albany, Georgia, recorded a 0.7% increase and Jacksonville, North Carolina, reported a 0.6% increase. 

About Author: Mike Albanese

Mike Albanese is a reporter for DS News and MReport. He is a University of Alabama graduate with a degree in journalism and a minor in communications. He has worked for publications—both print and online—covering numerous beats. A Connecticut native, Albanese currently resides in Lewisville.

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