Wildfire’s Impact on Real Estate

Probably the biggest impact to our market occurred in the immediate aftermath of the Little Bear Fire back in the Summer of 2012.  With the large number of homes partially or completely destroyed, our real estate market experienced a dramatic lull in sales activity. Some, in the path of destruction, we're never ready to move forward with their rebuild and others had inevitable delays with insurance claims. Many, who were looking to buy in the area before the fire hit delayed their purchase or looked elsewhere.  The natural beauty of our land was drastically altered in the burn area that the desire to move here could only decrease, at least in the short run.

As Ruidoso moved forward forward, displaced residents who rented sought new accommodations in other locales. They could ill afford to wait for rebuilding to have a home to rent again. And with our owners, insurance delays and and the time it takes to rebuild noticeably slowed normal real estate activity. Owners near and in the burn placed but not damaged by fire, will find fewer potential buyers interested in their homes. This increaseed the time on market and eventually eroded our property values to some degree. 

Premiums Up

Homeowner’s insurance is a localized product with every area subject to specific risks and having its own distinct loss history. During and immediately following the Little Bear Fire, some insurers stopped writing policies primarily because they didn’t want to insure an already damagea bit more in Ruidoso as loss ratios were finalized over the 2-4 years following the blaze. Premiums we pay are as much a look at future risk as they are an insurer’s attempt to recover losses from previous claims.  Any fire increases the potential of higher premiums as well as tougher underwriting standards in Ruidoso and similar communities. Some insurance companies may even begin to mandate loss control efforts like brush removal and new roofing materials before issuing policies.

Should You Stay or Should You Go?

Fire is unique with its devastation often quick and complete.  The post fire imagery in Ruidoso is still unsettling within our burn landscape. It’s a lingering reminder of the destruction which inevitably will be with us for years. The emotional and psychological impact on those who lost homes I’m certain is enormous. Some fought doggedly to rebuild and return to the life they had while others simply moved away from here never to return again.  It will take a while to predict the percentage of residents who return versus those who will leave but the scars from Little Bear will last and these includes those scars on our housing market.

Valuations and Taxes

Little Bear also had a lingering impact on our property taxes.  Should the County have reappraised the homes that were destroyed, providing a much-needed break to already stressed fire victims? It would have seemed a compassionate thing to do but would come at a price. Reappraisals at lower values would have our County taking in less money to provide nearly an identical amount of services.

Our budgets were already tight and shortfalls loomed around every corner. Lowering our tax revenue may actually have hurt our community more than it helped the people for whom it was intended. The County already experienced a tax impact from the properties that will not rebuild. Our tax collections decreased to some unknown extent. Immediate reappraising would only have accelerated this decrease. By some estimates, the values of just land decreased 50% or more in and around burn areas. With value a measurement inherent in supply and demand, the visual beauty of an area destroyed or damaged simply will have fewer people desiring it and values will come down.

We’ve took a hit back then that’s certain, but don’t think all is doom and gloom in our mountain paradise. Thousands still phone and email our real estate office with their dreams of mountain living intact. And many will come after them. Fire and its impacts are just now part of our physical and economic landscapes in which we choose to live.