After disasters, will Bay Area exodus grow?
Home sweet home: History shows that many will stay
Evacuations, intermittent blackouts, swaths of destroyed homes and apartments — the equation for buying a Bay Area home may be changing with more intense fire seasons.
Past Wine Country fires have crunched the already tight housing supply, driving up rents and mortgages, and pushed the lowest earners even farther outside the region or stacked into San Francisco and East Bay housing.
The Kincade Fire in Sonoma County forced nearly 200,000 evacuations. The turmoil and heartbreak may crack the patience of already taxed Bay Area and Wine Country residents and lead to a hastened exodus and reluctance to buy homes.
“The marks and scars of these fires are
quite deep,” said George Ratiu, senior economist with Realtor.com.
But history and interviews with locals suggest many are willing to stay in their besieged communities and return to their jobs, families and the place they call home.
Record-setting fires have ripped through Northern California in the last three years, destroying lives and property. The Tubbs and Camp fires in 2017 and 2018 caused more than 100 deaths, destroyed 24,000 homes and commercial buildings and uprooted thousands of residents.
This year, the Kincade Fire has decimated more than 75,000 largely undeveloped acres. PG&E blackouts blinkered power on and off throughout the region for much of October. Southern California is burning as well, forcing more evacuations.
Economists and disaster experts say the cycle from previous disasters is likely to repeat: an immediate increase in housing prices, rising steadily for six to nine months before resetting back to pre- disaster levels. The decimation of homes and apartments will compound the state’s housing shortage.
Higher housing prices in fire- damaged counties are expected to spread to nearby communities, Ratiu said. “That’s something we’ve seen in every one of the significant fires,” he said.
Tom Jeffery, senior hazard scientist with real estate data firm CoreLogic, said California residents have been willing to return to high-risk fire zones. He noted that large subdivisions in Southern California now rest on property decimated by blazes just 15 years earlier.
“It’s really about the resilience of the homeowner or the business owner,” Jeffery said.
Jeffery said blazes have grown more powerful. Intense weather brought on by climate change has put more people and property at risk, with high gusts carrying embers as far as 2 miles away.
Fire officials are signaling that increased risk by ordering the evacuations of hundreds of thousands of residents. “That’s really sending a message,” Jeffery said.
The developing annual ritual of blackouts, air masks and evacuations may be the tipping point for some residents.
A steady rise in Bay Area home prices since 2012, coupled with traffic and other high costs, have created a rush for the exit ramps. Silicon Valley lost 22,300 residents last year, replaced by nearly as many foreign immigrants settling into the region, according to a recent study by Joint Venture Silicon Valley.
Jeff Tucker, an economist with Zillow, said it’s unclear how much PG&E’s planned blackouts will hurt home values, because there’s “no precedent” in the U. S. for property owners losing regular access to electricity. Tucker believes most people will dismiss the blackouts as an inconvenience.
The risk remains high for homes in Napa and Sonoma counties. Nearly 10,000 homes in Sonoma are in high or very highrisk fire zones, with an estimated value of about $10 billion, according to a Zillow estimate based on real estate data and U.S. Forest Service designations.
About 2,000 homes in Napa are in similar highrisk fire zones, with an estimated combined worth of $3 billion, according to the Zillow analysis. The average cost of homes in the very high-risk areas, typically hillside estates, was more than $1 million in Sonoma and $1.6 million in Napa — far more than the $629,000 median value in Sonoma and $668,000 in Napa.
“This will be a permanent risk, and you’ll be rolling the dice every year,” Tucker said. “And a lot of times they’ll come up snake eyes.”
Wine Country residents say they understand the growing risk, and some have considered moving.
George, a home builder who asked to be identified by only his first name, moved himself and his company to Santa Rosa nine months ago. The builder was in the middle of a $4 million custom home project when the owners, spooked by the fires, told him to pause.
He is reconsidering his decision to move. “People are realizing that even if your area wasn’t affected by this fire, it just as easily could have been,” he said.
During the 2017 Tubbs Fire, Janine and Steve Lowery woke up in their home in the foothills near Santa Rosa to car horns honking. They spotted a wall of glowing orange flames engulfing their neighbor’s home and encroaching the creek behind their house.
“There’s a difference between being evacuated and running for your life,” Janine Lowery said. Despite their brush with disaster, the couple elected to stay put during the Kincade Fire.
They spent more than eight hours every day and night hosing down their fences, trees and the roof of their home. By Wednesday, they felt as if they were almost safe.
“A lot of anxiety goes with all of this,” Janine said. “Because of the Tubbs Fire, we know how fast this can all go.”
The two lifelong Santa Rosa residents chuckled when asked if they would ever consider leaving. “Oh,” Janine said, “it’s never even crossed our minds.”