Low inventory means buyers are still purchasing homes left unscathed by wildfires that hit the Los Angeles area a few weeks ago
Low inventory means buyers are still purchasing homes left unscathed by wildfires that hit the Los Angeles area a few weeks ago.
People have quickly picked-up homes that others backed out of during the fires, according to Joanne Nelson, a real estate agent for Prudential Real Estate in Newbury, California.
She said of the 20 homes she had on the market during the 2 May fire, only two buyers fell out of escrow and they were quickly replaced by two other buyers with similar offers.
The area is full of million-dollar homes, but on average, home prices are approximately US$ 730,000, according to Trulia.com, a real estate market website.
“I have seen the fires not as a negative, but as an advantage,” Nelson said. It shows how talented our firefighters are for saving our 2600 homes, she added.
She said that homebuyers have not been deterred from buying a home in the area, despite the high-risk nature of living in a canyon. “You can’t give up lifestyle for fear,” she said.
But part of that lifestyle could mean ballooning insurance premiums.
“Insurance companies are always quick to react,” Nelson said.
Though no homes were damaged in Nelson's area, she said insurance companies are still likely to use the fires as an advantage point.
By law, mortgage brokers cannot assist borrowers finding homeowners insurance, says Ray Gallegos, branch manager at WJBradley in Henderson, Nevada. But homeowners insurance is a very common concern that he receives as a loan officer, he said.
Policies typically cover the entire home amount, should the property be destroyed. The one thing that is commonly not covered is flooding, however, so borrowers should be aware of this if they are in a risky area.