H OUSING N EWS R EPORT
May 2016
insured losses.
natural disasters like wildfires, according to RealtyTrac’s Natural Disaster Housing Risk Report for 2014. Based on RealtyTrac’s wildfire analysis, the top five counties categorized as “high risk” or “very high risk” for wildfires with the most housing units were: Suffolk County, New York (883,318), Riverside County, California (587,822), San Bernardino County, California (509,209), Mecklenburg, North Carolina (325,432) and Bergen County, New Jersey (255,025). In the West, unusually dry conditions have made the western United States a tinderbox for wildfires. Wildfires, which destroy thousands of homes in theU.S. every year, aremore destructive than ever because, as populations have grown and new housing has been built in wooded areas, more homes are exposed to wildfire risk. Additionally, the cost of suppression is soaring as the fire season lengthens and grows more severe, according to a U.S. Forest Service report. In 2014, the 10 largest fires cost more than $320 million to combat. The Forest Service projects that its fire suppression costs will grow from around $1.1 billion in 2014 to $1.8 billion in 2025. California is used to battling raging wildfires. But after a four- year drought, the state is suffering more than usual — 5,255 fires have scorched 217,827 acres of land so far this year, compared with 3,638 fires burning 90,894 acres during the same period last year. Two of the most destructive fires in California’s history — the Valley and Butte Fires — ravaged nearly 150,000 acres in Northern California in 2015 and caused an estimated $1 billion in insurance losses, according to the Claims Journal. The larger of the two fires, the Valley fire, was ignited on September 12, 2015, north of the Napa Valley winemaking region, consuming 1,958 structures in Lake, Napa and Sonoma counties, and resulting in approximately $700 million in insured losses and making it the third most damaging wildfire in state history based on total structures burned. In terms of structures lost, the Butte Firewas the seventhmost destructive fire to hit California, damaging 818 structures in Amador and Calaveras counties and causing an estimated $300 million in Southwest: Wildfires, Earthquakes, Drought Valley Fire
But the granddaddy of California wildfires was the 2003 Cedar Fire in northern San Diego County — the largest in California’s history — which singed 275,000 acres, incinerated 2,800 homes and caused $2 billion in property damage, according to Cal Fire. (See Top 10 Most Structures Destroyed By Wildfires)
Northwest: Wildfires
In the northwest the big threat to the area’s picturesque landscape is wildfires. All told, the federal government appropriated $3.9 billion dollars last year alone to combat wildfires. One recent blaze — the Carlton Complex fire in Washington state — destroyed 300 homes, with an estimated suppression cost of $100 million dollars. It was the largest wildfire in state history, consuming 244,000 acres, or 381 square miles — more than four times the size of Seattle. Not surprisingly, home values in high risk areas tend to be higher than in low risk areas, and over the last three years, home price appreciation has been stronger in higher risk counties than in lower ones, according to RealtyTrac. As the 11th anniversary of Hurricane Katrina approaches on Aug. 29, the country is more vulnerable today to catastrophic losses because of extreme weather than ever before. Psychologically, it’s hard for most homeowners to worry about the risk of natural disasters, according to Kunreuther. “Most people think it’s not going to happen to me,” said Kunreuther, referring to thepsychologyof buyinghomeowner’s or flood insurance. “But the best return on an insurance policy is no return at all.” What’s Next? Paying for Future Catastrophes
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