Regarding fires and the effect on housing costs/supply/demand:
I think the fires in all of southern California will end up driving some people out of the area. Let’s assume the majority of people in danger aren’t facing foreclosure; they are seeing values decline and some may still be able to sell at a higher price than they paid. Those facing resetting ARM’s are probably more likely, but even those who aren’t may have job affordability problems with soaring costs living, and just need the last straw to say adios.
It would take a lot more destroyed homes for this to reduce the 11 months supply on hand to drive prices up.
Not to mention, in all the areas where houses were close to fires do you thinkthe average emotion-based financial descision-maker would go buy anytime soon?