Santa Rosa California Fires are Driving UP Home Prices

THE SANTA ROSA CALIFORNIA FIRES resulted in the destruction of 3000 homes in Santa Rosa, and another 3000 in the surrounding areas of Sonoma and Napa Counties. This means 3000 fewer housing units in Santa Rosa, and 3000 families looking for a place to live. Many of them have found rentals that their insurance companies will pay for for six months or more at prevailing rental rates. Those prevailing rental rates have gone up about double because demand was already way higher than availability before the fires. These higher rents also mean the properties have a higher value from an investment point of view, and buyers will pay more.
In addition, some of the owners of burned homes are selling out to the insurance company. This puts cash in their hands and they no longer have a home loan, so they can freely buy what they can find.
Not only burned out homeowners are looking, but there are a considerable number of burned out tenants who are looking to buy now, having realized they were just satisfied to rent before, while it was not a good investment decision. Prices have gone up over 10% in the last year, meaning that a purchaser with 10% down would have doubled their equity.
With only about 1% of homes in Sonoma County turning over annually BEFORE the fires, the shortage of homes for sale vs active buyers is even greater now.
New home projects are being overwhelmed with buyers applying to purchase them, selling out new releases within a few days, with waiting lists. The County is trying to help by getting banks to allow larger releases by the new home builders.
Finally, the new homes that will be built, .. maybe finished in 18 months, will be worth far more than the older inventory they replace. In fact, in Kelseyville, where there were the Lake County fires, the homeowners who did not get to build new from the ashes are frequently saying they awkwardly feel they are envious.
With many of the Owners of burned homes selling out, there will be speculators building these new homes on vacant lots just to put them on the market. The prices they will be able to get will be much greater than the neighborhoods would have brought before the fires.
In Summary, there are no factors that I can see that would indicate the Sonoma and Napa fires will depress home values. In fact, all indicators are that property values will be driven up, in continuation of what is already being seen. The most desirable properties are being purchased quickly with generous overbids, and frequently with cash.
However, we are getting buyers, First Time Buyers and Repeat Buyers into homes with Creative Ideas. Don’t think you can buy a home? NO. It is not a matter of IF… it is only a matter of WHEN. Call me and I can explain for your situation… NO TRICKS, just our routine service from a place of being CARING, CAPABLE, CREATIVE and CONFIDENTIAL.

PREPARE YOUR HOME FOR TEMPERATURE EXTREMES, OR BUY ONE ALREADY PREPARED

“Green” homes are not just important by fears of Global Warming. “Green” homes save significant amounts of money. Cold is deadly, much more deadly than heat. Insulation is the most important thing you can look for when buying a home today. Global Warming or Global Cooling, this is the most cost effective way to stay comfortable and control the costs of cooling or heating. Add insulation if what you have is not adequate. Dual, or even Triple paned windows are also important, along with blinds on the windows that can be closed and trap air against the windows, or opened to let heat in or out. Outside air ventilation is very effective at heating and cooling a home if there are wide outside temperature swings. Cool nighttime air can be brought in and kept inside during the day. Warm daytime air can be brought in and kept inside during the night. Emergency power may be wise where freezing temperatures occur. Most central heating and cooling systems will not work at all without some electricity. It seems that Commercial Utility power is either at risk, or poised to become very expensive. Clouds are the primary cause of cold weather. Clouds make solar power inefficient. Wind power requires a lot of space and a very large investment using today’s huge wind generators. Smaller wind generators will most likely become available when Solar Power cannot be reliable. Wind generators require maintenance. Have you seen how many dead windmills there are in any given windmill farm? A diesel or gas or propane powered generator may be a good investment. Those fuels will never go away. It is even possible to use the gas that is piped to your home to run a generator to provide electricity for fans lighting, appliances and microwave ovens. Have an electrician add a way to switch to alternate energy sources in case Utility power is interrupted. This switching can even be automatic.

Prepare your home for temperature extremes, or buy one that is already prepared. Be very interested in dual paned windows and insulated floors, walls ceilings and garage doors. Make sure gaps around windows and doors are sealed when they are closed. Use low wattage lighting to save electricity that will be needed for heating or cooling. Look for energy efficient appliances, because electricity and gas utilities will get more and more expensive over time. Use water efficient fixtures because water will get more expensive over time. Droughts are making water conservation a serious financial concern. Buy a “Green” Home, or make one out of one that is not “Green”, and save lots of “Green”.