More than 4 million acres have burned in California through September, already a record and about 4% of the land in the state.
It’s just the latest evidence that there are more — and larger — wildfires in the state in recent years.
Climate change has created near-perfect conditions for wildfires, from the foothills overlooking Los Angeles to the rolling hills of wine country in Northern California. Thousands of buildings, many of them homes, have burned and dozens of residents have died from the wildfires.
Now, last fire season was better than the record-setting 2017 and 2018 seasons, but the annual fire seasons are getting longer and much worse. Just ask residents in Paradise and Santa Rosa, where 11,500 and 5,300 homes were lost to recent wildfires, respectively.
The 2017 and 2018 fire seasons were “incredibly destructive, record-setting years for wildfire, followed by a comparatively quieter 2019,” says Tom Jeffery, principal hazard scientist for CoreLogic. “When we talk about wildfire trends, it’s important to treat any decrease in fire activity as only temporary. Like most natural hazards, there is no reason to believe that the amount of wildfire acreage, or the number of homes in the path of future wildfires, will be any less.”
And California is definitely the epicenter for wildfires. California has seven of the 10 highest-risk metro areas in the nation, including the top four spots, according to CoreLogic.
Los Angeles is firmly in first place, with about 155,000 homes at risk with a potential loss of $90 billion. Riverside County is a distant second place, with 126,600 homes at risk from fires for a maximum financial loss of $50.6 billion.
San Diego and Sacramento are in third and fourth place.
Yep, buying a home in these communities is expensive. Need another dose of sticker shock? The monthly mortgage payment for the average Atherton house — based on a 30-year loan with a 20% down payment — would be about $27,300, including $4,500 for property taxes, according to NerdWallet. The annual property tax would be $54,000.
Of course, if you’re buying a house for $6 million, you’re probably not too concerned with property taxes.
Feature photo of a fire threatening homes in Anaheim Hills. Aarti Kalyani/Shutterstock
California’s most at-risk fire regions based on the number of single-family homes and potential financial losses
Los Angeles: 154,462; $90.3 billion
Riverside: 126,628; $50.6 billion
San Diego: 98,970; $47.5 billion
Sacramento: 73,863; $30.6 billion
San Francisco: 37,600; $18.8 billion
Thousand Oaks: 27,331; $13.8 billion
Truckee: 35,523; $12.3 billion
Top housing official warns fire victims, licensees about price gouging
Californians affected by wildfires could become victims a second time — of price gouging for rental housing.
The California Department of Real Estate, the state agency that oversees real estate agents, is warning that price gouging is a criminal offense in counties where a state of emergency has been declared, such as Fresno and Napa counties.
Punishment includes a fine of as much as $10,000 and/or prison. Unlawful business practice allegations can also be brought against licensees for price gouging.
“Paying more than they should for a roof over their head is the last thing these wildfire victims need to worry about right now,” Department of Real Estate commissioner Doug McCauley says. “That’s why this reminder is vitally important — not only is it unethical, it’s illegal to price gouge in a declared state of emergency.”
McCauley encourages consumers to research property companies and licensees at the department’s website, where they can also report illegal conduct under the “Consumers” tab and then click on “File a Complaint.” California Penal Code 396 details what constitutes price gouging in disaster zones.
San Francisco rents plummet, Fresno soars
Work-from-home options for employees continue to have a dramatic effect on the apartment rental market, with big cities cutting rents at a record pace and lower-priced markets hiking prices in California.
San Francisco’s average rent for a one-bedroom apartment declined to $2,830 in October, a record 20.3% drop, according to Zumper. It’s the third straight month of a record-setting drop — and the first time the city’s fell below $3,000 in several years.
While San Francisco’s double-digit drops in rent get attention, the City by the Bay has plenty of company. Across the Bay, Oakland had the second-largest decline in the nation at 13.5% compared to a year ago, with the average rent falling to $2,130.
Los Angeles’ average rent fell 11% to $2,020 and San Jose was off 9.3% to $2,230.
Renters are abandoning big cities nationwide in favor of the lower-priced suburbs, where their dollars go farther — and they may be able to get more space.
Need proof of the trend? Fresno’s average rent for a one-bedroom apartment has soared to $1,080, a 14.9% increase from a year ago. Bakersfield has climbed 11% to $810, and Sacramento — a popular destination for those abandoning the Bay Area for lower-priced housing — is up 8.5% to $1,410.
California tops priciest ZIP codes list
California is expensive. Very expensive, especially when it comes to housing — even when you get a big paycheck and have deep pockets.
More than two of every three of the nation’s most expensive ZIP codes are in California, with Atherton at $6.7 million leading the way. The Bay Area city, about 45 minutes south of San Francisco and 20 minutes from Facebook and Google, is home to many well-known business leaders and athletes, including Golden State Warriors all-star point guard Stephen Curry, former eBay and HP CEO Meg Whitman and former Google chairman Eric Schmidt.
How expensive is Atherton? Well, the nation’s second-most expensive ZIP code is Beverly Hills’ 92010 (sound familiar?) at $4.1 million, according to Property Club. That’s almost 40% cheaper than first-place Atherton.
California boasts 87 of the 125 most expensive ZIP codes in the U.S., and six of the top 10 positions — and half of the top 20.
California’s top 10 most expensive ZIP codes:
- Atherton (94027): $6.7 million
- Beverly Hills (90210): $4.1 million
- Santa Monica (90402): $3.63 million
- Ross (94957): $3.61 million
- Los Altos (94022): $3.58 million
- Portola Valley (94028): $3.5 million
- Palo Alto: (94301): $3.4 million
- Tiburon (94920): $3.15 million
- Burlingame (94010): $3.1 million
- Newport Beach (92657): $3.1 million
Source: Property Club
Many buyers want backyards — not condos
Remember the condo craze a few decades ago in California, when fast-rising home prices encouraged home-shoppers to share a wall or two with their neighbors?
Well, despite few single-family homes on the market and record prices, condo sales are far from sizzling in California. The median price for a condo climbed to $506,000 in August, an 8.1% increase from a year ago — but almost half the gains of home prices for the same period, according to the California Association of Realtors.
And while condo sales are up 6.2% in August from a year ago, home sales soared that much from July to August — one month.
So why are condo prices and sales so far off compared to single-family homes? Like so many other things, blame the coronavirus. Buyers want more distance from their neighbors.
“Condos have experienced relatively modest price growth because the coronavirus pandemic has motivated many homebuyers to instead bid on single-family homes, which typically offer more space and privacy,” says Redfin lead economist Taylor Marr. “But if prices of single-family homes continue to surge to unsustainable levels, condos may make a comeback, as they could become the only type of home that buyers in some areas can afford while also avoiding intense bidding wars.”
Perhaps, but don’t bet on it. With record-low mortgage rates, buying a house has become more affordable — at least when it comes to borrowing the money — and if you can get a backyard and square footage, many shoppers are opting for the house. Plus, condos have homeowner association dues, while more single-family homes can escape those pesky monthly costs — and the annoying board meetings and neighborhood requirements.
The average monthly mortgage payment for the median-priced home in California was about $3,100, based on a 30-year loan and 20% down payment. The average payment for a condo would be about $2,300.
Redfin crunched the data on condo prices in several metro regions of California, and there is evidence that Southern California condos are enjoying more demand and higher prices compared to Bay Area condos, except for Oakland.
Median sale price of CONDOS in August compared to a year ago
Anaheim: $513,000, up 9.1%
Los Angeles: $529,000, up 9.8%
Oakland: $570,750, up 11.5%
Riverside: $319.250, up 8.2%
Sacramento: $280,000, up 3.7%
San Diego: $433,750, down 1.0%
San Francisco: $1.09 million, down 1.4%
San Jose: $713,500, up 2.1%
New law bans buying a large block of homes at auction
More than 1 million Californians lost their homes to foreclosure during the Great Recession, and private equity firms and real estate companies snatched them up as part of a bargain-buying frenzy.
They often bought those homes at deep discounts, sometimes at one-third the previous market value. But the controversial practice has ended, thanks to a new law that goes into effect Jan. 1.
SB 1079, signed by Gov. Gavin Newsom, bans selling a block of foreclosed homes at auction to a single buyer. Instead, tenants, affordable housing organizations and local governments will get an opportunity to match the best price at auction, an effort to ensure consumers get a fair shot at homes.
State Sen. Nancy Skinner, a Democrat from Berkeley, said her bill “sends a message to Wall Street: homes are not yours to gobble up; we won’t tolerate another corporate takeover of housing.”
There is also another message in the new law — maintain those houses or face a $2,000 fine per day. Some large companies bought on the deep discounts but scrimped on keeping up the residences.