Homes in wildfire risk zones are more affordable

Homes in wildfire risk zones are more affordable

Homes in wildfire risk zones are more affordable
Wildfires along the west coast of the U.S. continue to wreak havoc on communities from Washington to Southern California. With more than 4.5 million residential properties considered to be in high risk wildfire zones, an estimated $3.3 trillion in home values could be in jeopardy. Still, that hasn’t stopped people from wanting to move to these high-risk areas, particularly as they tend to be more affordable.

The median sale price of homes in ZIP codes with low wildfire risk has increased 101 percent since 2012, compared with an 88 percent increase for homes in high-wildfire-risk ZIP codes, according to a new Redfin analysis. In low-risk areas, 35 percent of homes sold above the list price during the 12 months ending in August 2020, compared to 27 percent in high-risk areas.

Home values in fire-prone areas have been struggling to keep up with low-risk regions since the 2015 Camp Fire became the most destructive wildfire in California history, killing 85 people and destroying over 18,000 structures.

Meanwhile, conforming no-point 30-year fixed mortgage rates are averaging 2.875 percent and 15-year rates are near 2.5 percent.

Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.