California's battle against wildfires entered another day Tuesday with little hope that the hot Santa Ana winds driving the blazes will stop any time soon.
President Bush declared a state of emergency for the state, opening the way for federal aid and assistance to a region stretching from north of Los Angeles to the Mexican border.
Fire officials were pessimistic overnight, according to reports, suggesting that hundreds or perhaps even thousands of homes might be lost. In many cases the fires are burning without any containment whatever.
Such damage to infrastructure has been seen before in California.
In 2003, fires in the region destroyed 3,640 homes. Ten years earlier, in 1993, fires damaged or destroyed 1,200 structures. And in 1991, a fire in the Oakland hills, east of San Francisco, burned more 2,800 residences.
Economists have noted the perverse reality that in the wake of disasters, re-construction spending helps the economy, even as people are still struggling to recover from their personal losses.
The impact can be relatively small: rebuilding in the wake of the California fires of 2003 came against a backdrop of tens of thousands of new homes under construction.
Then again, in early 2006, reconstruction related to Hurricane Katrina, may have helped bolster the national economy.
So in Southern California, one of the hardest hit housing markets in the country, the temporary reduction of available supply may not be enough to turn things around completely, but it could at least act as a brake on the housing crash.
That would be a small consolation from so wide spread a disaster, of course, and no comfort whatsoever to those who suffer losses from the fires.
But as the saying goes: "It is an ill wind that blows nobody any good."
http://www.marketwatch.com/news/story/co...
Prices will continue to skid downward. Foreclosures will increase even though Countrywide and other lenders may adjust the rates because most of the owners in CA bought their home and hoped to make money from the continued appreciation. Now that the cat is out of the bag, how many do you think will keep making their payments and the cost of keeping up a home? If this site is still up and running in late 2011, people will still be posting questions like, "when will we hit the bottom"? Then, a couple of years after that, people will be posting the question, "when do you think that prices will start rising again"?
This is a long-term "down cycle" to the bottom and it's going to be a long, long, time before prices start climbing again. (In bubble markets) I now live in Greenville, SC (left SD in the spring of 2005) which has a good economy but never had the run-up in prices like CA and other bubble markets so we're not feeling hardly any drops in value with real estate. We are like the majority of the country. So, when you read these proclamations from the NAR, they may apply (somewhat) to many markets such as the one I live in but they aren't going to apply to CA for a long time.
I guess this is a sign of how desperate people have been the past few months and how much financial stress has been weighing on many minds. I recognize this could be seen as an attempt to find the "silver lining" but it comes off kind of strange. In good taste this question probably shouldn't be asked before the danger is past. I'm not referring to OC Scam or anyone else who responds, but the writer of the article.
Now the answer to the question:
"Standard Piggington response".
I agree with you guys ....It was also written in London if that help with the views of the author... just thought it to be interesting to hear views from others looking into our country.
As much as these disasters may be a temporary "brake" on price declines, it will be even more of a negative impact on sales.
Values can decline with or without sales, and I don't see how these fires can be anything but bad news for an already troubled market.
I think the author just wants to think he was the first one to point out how this will affect the housing crash. He's not saying anything worthwhile.
I would think that with so many people permanently displaced this will change the supply and demand for rental units. WIth more people needing to rent I would thiunk this would allow for an increase in rental prices.
If the rental prices reach a new ground it changes the rent buy equilibrium.
On the jobs front constuction and builders are going to have business up to their eyeballs.
Additionally with government intervention and encouragement to lending institution to assist with the mortgage mess you may housing decline could easily decelerate and plateau earlier than people think.
I would think that with so many people permanently displaced this will change the supply and demand for rental units. WIth more people needing to rent I would thiunk this would allow for an increase in rental prices.
If the rental prices reach a new ground it changes the rent buy equilibrium.
On the jobs front constuction and builders are going to have business up to their eyeballs.
Additionally with government intervention and encouragement to lending institution to assist with the mortgage mess you may housing decline could easily decelerate and plateau earlier than people think.
It's going to become even more difficult to buy, IMHO. Why? Because getting insurance is going to be more difficult and cost more. Allstate is declining to write more fire insurance in CA. Look what has happened in Florida after the hurricanes of recent years--insurance costs have gone through the roof.
The fires will stimulate construction-related employment, for sure.
It never ceases to amaze me, the differing emotive language used to describe the current housing market. "The hardest hit housing market ...consolation ...brakes on the housing crash." Shouldn't this read "housing market that is at last correcting itself ...the unfortunate or misguided ...may slow the imminent correction."
My understanding is that we were (are) in a bubble, and that somewhere inside the definition is the term hyper-inflated, in other words over-valued. Please forgive my ignorance, but isn't that generally a bad thing, viz; it has an eventual negative impact on things. So tell me then, why do so many articles seem to use a language emotionally charged with terms that seem in denial.
The current number of homes lost in SD County is something like 1100, and hopefully the final total won't be much more than that if at all. That is going to be, what, 3000 or so folks displaced? How many tens of thousands of homes are on the market in SD County? Those numbers are a drop in the bucket, particularly when you consider the fact that most of those burned out will choose to rebuild.
I can see there being an impact on the short-term rental market, but won't FEMA provide trailers for those burned out?
Really, the main impact here is that after two rounds of disastrous wildfires in a four year period, it will be harder to sell properties in areas that are more fire prone.