Bailout by fire?

[tothjj]

So if the appraised value is way higher than the actual value, could the lienholder take the money and just leave the property an empty burned out lot.

[Eugene]

The fire will reduce supply and increase demand for houses. (For rental apartments, too.) Ergo, prices go up. Not so much (or not at all) in peripheral areas – it’ll be hard to sell a house that sits on the edge of thousands of acres of dry grass waiting for the next wildfire. More so – in safe areas like LJ, PB, Clairemont.

[Eugene]

The fire will reduce supply and increase demand for houses. (For rental apartments, too.) Ergo, prices go up. Not so much (or not at all) in peripheral areas – it’ll be hard to sell a house that sits on the edge of thousands of acres of dry grass waiting for the next wildfire. More so – in safe areas like LJ, PB, Clairemont.

[Eugene]

The fire will reduce supply and increase demand for houses. (For rental apartments, too.) Ergo, prices go up. Not so much (or not at all) in peripheral areas – it’ll be hard to sell a house that sits on the edge of thousands of acres of dry grass waiting for the next wildfire. More so – in safe areas like LJ, PB, Clairemont.

[bsrsharma]

Emotions aside….

In cases of extreme loss, the market gets depressed as the people severly hurt like to stay away from the place of loss. Look at south Florida after major hurricanes and NOLA after Katrina. Mass psychology has its tipping point too.

[bsrsharma]

Emotions aside….

In cases of extreme loss, the market gets depressed as the people severly hurt like to stay away from the place of loss. Look at south Florida after major hurricanes and NOLA after Katrina. Mass psychology has its tipping point too.

[bsrsharma]

Emotions aside….

In cases of extreme loss, the market gets depressed as the people severly hurt like to stay away from the place of loss. Look at south Florida after major hurricanes and NOLA after Katrina. Mass psychology has its tipping point too.

[TheBreeze]

Do insurers even pay out for fires like these which may be considered “acts of nature” or “acts of terrorism”? I wonder if there might be a clause in most homeowners’ insurance that distinguishes between a fire caused by say faulty electrical wiring in the home as opposed to a massive fire like this?

This would seem to be a somewhat parallel situation to what happened after New Orleans. One side was arguing that the damage was caused by flooding and the other side was arguing that the damage was caused by the hurricane because the typical policy only covered one of those acts.

In any event, I sure wouldn’t want to have to rely on an insurance payout in a situation like this. I’m sure the insurers will fight hard and it’s not like they have infinite capital anyway. We may soon be reading about FIs (effed insurers).

[TheBreeze]

Do insurers even pay out for fires like these which may be considered “acts of nature” or “acts of terrorism”? I wonder if there might be a clause in most homeowners’ insurance that distinguishes between a fire caused by say faulty electrical wiring in the home as opposed to a massive fire like this?

This would seem to be a somewhat parallel situation to what happened after New Orleans. One side was arguing that the damage was caused by flooding and the other side was arguing that the damage was caused by the hurricane because the typical policy only covered one of those acts.

In any event, I sure wouldn’t want to have to rely on an insurance payout in a situation like this. I’m sure the insurers will fight hard and it’s not like they have infinite capital anyway. We may soon be reading about FIs (effed insurers).

[TheBreeze]

Do insurers even pay out for fires like these which may be considered “acts of nature” or “acts of terrorism”? I wonder if there might be a clause in most homeowners’ insurance that distinguishes between a fire caused by say faulty electrical wiring in the home as opposed to a massive fire like this?

This would seem to be a somewhat parallel situation to what happened after New Orleans. One side was arguing that the damage was caused by flooding and the other side was arguing that the damage was caused by the hurricane because the typical policy only covered one of those acts.

In any event, I sure wouldn’t want to have to rely on an insurance payout in a situation like this. I’m sure the insurers will fight hard and it’s not like they have infinite capital anyway. We may soon be reading about FIs (effed insurers).

[Anonymous]

It is surely within the realm of possibility that someone could intentionally torch their own home. Let’s be honest and admit that even if it did happen, we are likely talking about a very limited number of instances, like one or two in the entire county if any at all.

Big picture impact on the housing market and economy, I have to think that the net will be negative considering the costs of fighting the fire, the losses that individuals will face even if they get an insurance payment, and the impact it will have on insurance premiums and the fear people will have about buying in fire prone areas. Of course, there will be more work for builders and money from insurance payments will lift up the housing related industries, so who knows.

[Anonymous]

It is surely within the realm of possibility that someone could intentionally torch their own home. Let’s be honest and admit that even if it did happen, we are likely talking about a very limited number of instances, like one or two in the entire county if any at all.

Big picture impact on the housing market and economy, I have to think that the net will be negative considering the costs of fighting the fire, the losses that individuals will face even if they get an insurance payment, and the impact it will have on insurance premiums and the fear people will have about buying in fire prone areas. Of course, there will be more work for builders and money from insurance payments will lift up the housing related industries, so who knows.

[Anonymous]

It is surely within the realm of possibility that someone could intentionally torch their own home. Let’s be honest and admit that even if it did happen, we are likely talking about a very limited number of instances, like one or two in the entire county if any at all.

Big picture impact on the housing market and economy, I have to think that the net will be negative considering the costs of fighting the fire, the losses that individuals will face even if they get an insurance payment, and the impact it will have on insurance premiums and the fear people will have about buying in fire prone areas. Of course, there will be more work for builders and money from insurance payments will lift up the housing related industries, so who knows.

[cr]

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?

[cr]

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?

[Author]

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