Need Help! Appraising in a fire area

[Dee Dee]

Hi Mike,

Just tell me when and where on the meeting and I'll do my best to be there. Would love to get a pulse on the wildfire impact topic with other appraisers.

Up until two days ago I was evacuation standby in JeffCo, but the worst of our worries ended well over a week ago. I've been talking to a couple of lender and they said that the local realtors have been scrambling to find what HO insurance companies will still cover in this area so that they can close their sales. Still too early to tell what the future might bring. I was afraid that the Hi Meadow fire two years ago would sour the market surrounding it, but the impact was barely felt by anyone other than those who were burned out or have views of the burn areas.

As for your Florissant appraisal request....how could you NOT disclose the fire and the lack of knowledge as to what the market effect might be. You're smart to back outta that one. It might take a few more months before you find a few comp sales to begin making a somewhat educated analysis.

Keep me posted.

Dee Dee

 

[Craig in Oregon]

May I suggest the Colorado and Arizona appraisers in fire areas contact Missoula Montana and Idaho City Idaho appraisers for their rather recent expertise in dealing with before and after value scenarios. Climate, vegetation are similar area to area. The main variable in my mind would be: how much demand was there (appreciation, continued subdivision, partitioning and new construction) before the 2001 fires and what have they seen after? The employment bases for each individual fire area also must be considered. Is the fire area around a growing or declining city or is it in a growing or declining recreational area? People have options; choosing a burned-out firest for a homesite location isn't usually the first choice.

The observation that demand will/may increase in non-burned areas would be borne out if the residents of non-burned areas actually learn from the inevitable misfortunes of the burned areas and do something about the fuel load before the "next fire". That is, you can not totally
eliminate the risk (look at the accused in the CO and AZ fires, one a USFS fire guard and one a private company firefighter, let alone the lightning) but you can reduce or minimize the hazard. If this means cutting/thinning trees, so be it. Evidently the folks in CO didn't learn from the killer Storm King fire of a few years ago and there was plenty of fuel remaining and available (because we love trees?) the "next time" a little too much concentrated heat got out of hand.

Craig in Oregon

 

[Dee Dee]

Hi Craig,
Most of the burns in CO have been in areas where the terrain is too steep to make thinning or logging profitable. No profit, no interest. Even if someone were to attempt it the trees prevent erosion and flash flooding that inevitably occurs on that kind of incline.

 

[Terrel L. Shields]

Just my opinion, and that and 75 cents will buy a cup of coffee at the Speedy Mart. I am beginning to wonder that after the initial shock of blackened unsightly view, if in fact, property that has not been burned over will not suffer a great deal of stigma precisely because they HAVE NOT been burned around. i.e.- a new fire could burn the unscathed homes whereas the areas burned over are unlikely to be burnable within the next 10 years.

I do hope at least one outcome of this will be to to rethink the issue of allowing homes to be built in forests likely to become tinderbox dry in drought years. Something akin to allowing homes to be built back right on the beach in Fl or the edge of the Mississippi River in the flood plain. Someone besides the government ought to be picking up the tab. Fire suppression plans are being designed to protect homes instead of stop the fire.

 

[Ross (CO)]

Our major metro area newspaper has obviously covered the fires story well and now presents the news of how affected families are coping with their losses, how trees slowly regenerate over years of slow recovery, how some will build anew and how others are not going to attempt to do so......and quotes from area Realtors about how prices and values may be forced downward ! Nice to see that expression of honesty in these times of local economic recovery. Added to that we have (had) 4000 Worldcom employees in three building locations in the city and last Friday 500 were released, with more likely to go in days or weeks ahead. The word "stigma" was used in an earlier post here. So much of the fire traversed slopes with considerable steepness. The pine needle tinder which was the fuel is nearly all gone from 137,000 acres and so goes the blanket of protection to slow or stop excess surface material erosion. Roads will wash-out more easily now in some places and slides will occur. Had our big local fire moved further south and east then easily a 1000 or more homes would have been burned out and this tragedy all the greater. The prevailing winds during the greatest advance drove those flames into territory with much lesser human population. Last September we watched how the events of terrorist attacks began a process which trickled down into so many elements of our economy and is still affecting things. This summer parts of the west get the fires and so many others in central and eastern parts of country worry about too much water. If it isn't one thing it's another and we appraisers simply record the facts and see how those facts portray what sellers do and how buyers respond. Supply and demand. Last fall one could see certain evidence in the MLS as pre-Sept. 11th......and the post-Sept. 11th effects later in fall and into the winter. Now, the data to watch for will be pre-June 8th and post-June 8th. Supply and demand.