Study Reveals Wildfires Don’t Hurt Hot Real Estate Markets
More people than ever want to live in wildfire zones, despite the risk of property damage that wildfires pose. With wildfire zones located just outside some of the country’s most populated metro areas, a new study explores how wildfires impact home prices.
The study, led by researchers at the University of Nevada, Las Vegas, found that wildfires only affect real estate prices immediately after a disaster. In addition, home prices in wildfire disaster areas generally recover to their pre-fire levels within one to two years.
The study also found another troubling trend: not only do homeowners want to live in fire-prone areas, developers continue to meet the demand for new construction in these areas.
Homebuyers’ awareness of fire risk did not have any impact on their willingness to invest in properties that are at risk of wildfire. Even in areas with burn scars, home values declined after a fire and took more time to recover but prices still returned to pre-fire levels within one to two years.
“We have so many homeowners living in fire-prone areas that we have to come to terms with that. How do we protect those people?” said research economist Shawn McCoy, who led the study.
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