[quote=UCGal]If I recall, real estate prices dropped for about a year in the LA area after the Northridge earthquakes. I personally know two families who took advantage to purchase from freaked out people who decided the sunshine was not worth the earth quake risk and moved back to wherever they were from. One was in OC, one was in the Valley. Admittedly, this is anectdotal evidence.
It’s hard to say how much of the home price decline was due to the earthquake – there was a dip in housing prices during the same window for economic reasons. But the persons I know had been looking, and felt it was the time to get a bargain.
Yep, the earthquake caused a lot of people to move back to their home states, if not from California. Even native Californians left.
As you said, prices were already going down, but I definitely think the Northridge earthquake caused them to drop further. Even I was starting to look for a home before the earthquake happened, and decided against it after the quake. It took me a few years to get the courage up to buy.
I think it really depends on how large and damaging the earthquake is. What many who’ve never experienced it can’t understand (until you’re in one) is how powerful a large quake is, and how frightening the aftershocks can be if you’re already traumatized by the first one. People were literally thrown from their beds, all of the furniture was knocked down (even some with furniture straps).
At my work, the roof of one of our warehouses collapsed. We often worked 24-hours/day, but had just finished the Christmas rush, so were back to two shifts. If not for that, we would have had multiple casualties. In another warehouse, the walls had separated from the roof, but the structure was still standing (it eventually ended up “red tagged” as well). It started raining a few days later, and it was like Niagara Falls, with water cascading down the interior of all the walls. All the employees were using shop vacs to suck up all the water that was flooding the inventory. Fun days…
IMHO, if there were a large, destructive earthquake in Southern California, prices would drop like a rock. So many people are already not paying and/or underwater, and the market is being 100% supported by the Fed/govt already, a large EQ would throw things over the edge.
