California Counties Begin Listing Empty Lots
The December Home Data Index™ (HDI™) report is revealing, for the first time this year, a decline in quarter-over-quarter (QOQ) home price growth for the Western region. The Western region decreased slightly from previous month at 1.3 percent to 1.2 percent, which may be attributed to the recent barrage of wildfires across the state.
While Northern California continues to recover from fires that raged across Sonoma and Napa counties, a series of new wildfires are burning in Southern California’s Ventura County. As of December 12, at least 150 structures and 65,500 acres have burned with numbers expected to increase.
Data shows that Oxnard, California has seen lackluster growth since November with a quarter-over-quarter (QOQ) increase of only 0.01 percent to 0.59 percent. Because Oxnard is in Ventura County, it may experience short-term growth as wildfires continue to burn and diminish the already limited supply of homes in that area.
“Destructive wildfires are consuming homes and buildings in southern California, which is impacting an already tight housing market. Displaced homeowners may be forced to compete for temporary dwellings during rebuilds in tandem with a shrinking and expensive rental inventory to choose from,” shared Clear Capital CEO and Co-Founder Duane Andrews.
Despite the recent devastation in the northern part of the state, many of the burned down homes are going up for sale, but now as empty lots. The lots are being listed at approximately a third of what they would have sold for if a home was still standing on the parcel.
Where some homebuyers may see these listings as a deal, for others the lots may have less appeal based on expenses and time needed to make the property habitable, or rebuild altogether. Conversely, investors and developers may see opportunity. For instance, many of the lots are already connected to utilities and have been permitted for development, which could work to turn a profit. The effects of these investors though will not be felt until a couple of years later as home construction lags behind as well in these areas.
“The lack of homes available before the crisis may cause overall housing prices to increase, simply because undamaged homes are in high-demand, but in limited supply,” continued Andrews.
Despite a small dip in QOQ home price appreciation for the West, several metros within the region continue to accelerate in growth. In fact, eight of the top 15 fastest growing metros belong are part of the Western region, including:
- San Jose, California at 2.6 percent
- Las Vegas, Nevada at 2.1 percent
- Seattle, Washington at 1.85 percent
- Riverside California at 1.6 percent
- Tucson, Arizona at 1.35 percent
- Bakersfield, California at 1.31 percent
- Fresno, California at 1.30 percent
- San Francisco, California at 1.30 percent
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