Fear of the Unknown Can Stall Home Sales

Blomquist: “I would expect that for the Porter Ranch situation, we will see the market bounce back within a year or two at the most.”

IRVINE, CA—Natural disasters can have a disastrous impact on home values and sales in a particular market and in nearby markets, RealtyTrac’s VP Daren Blomquist tells GlobeSt.com. A recent report from the firm revealed that home sales decreased 44% in Porter Ranch, CA, in the three months following the discovery of an unprecedented gas leak—more than two-and-a-half times the seasonal drop in home sales in Los Angeles County and statewide in California during the same time period. In addition, the share of all-cash sales in Porter Ranch increased 50% in the three months following the discovery of the gas leak, five times the seasonal uptick in the share of cash sales in Los Angeles County and about four times the seasonal uptick statewide and nationwide.

Median prices are still holding steady in Porter Ranch despite the drop in sales and jump in cash-buyer share. There are more than 4.8 million single-family homes and condos worth an estimated $1.3 trillion within a 10-mile radius of 319 underground natural-gas facilities like the one at Porter Ranch.