I wouldn’t guess that all that many of the burned homes were horribly overencumbered. We like to toss around the idea that our society has devolved and everyone in it has been behaving irresponsibly, but I’d like the think that the people who’s behavior has been garnering all the attention are among the minority, not the majority.
OTOH, I would guess that a lot of those homes were underinsured. When coupled with the standing inventory of new homes it wouldn’t surprise me is some of the fire victims just moved on.
Maybe the sales activity from the last few months was bolstered by some of these buyers, who would otherwise have remained in place. Maybe without the fires 2007 would have ended even worse than it did.
