How the LA fires could impact the Arizona housing market

Southern California’s wildfires could drive a wave of people from the ravaged area to metro Phoenix, and they need homes. Requests from Los Angeles-area residents looking for Valley rentals have already increased, and many want luxury homes like the ones they’ve had to leave.

The housing demand is likely to give the Phoenix-area housing market a boost that could increase the price of rent, home costs and sales.

Catherine Reagor, a real estate reporter at “The Arizona Republic” and azcentral.com, joined “Arizona Horizon” to discuss the future spike in the housing market in the Phoenix area.

The L.A. residents whose property is covered by insurance could wait five years or more to have their houses rebuilt, according to Reagor. Within that time frame, home owners are looking for temporary homes that could potentially become permanent.

“Of course you want these people who are, you know, devastated by the fire, to have a house and to welcome them but the disparity in prices,” Reagor said.

She says that during the pandemic, there was an 30% increase in rental costs and a 50% increase in home prices. A lot of people moved to Arizona because the housing costs were previously less expensive.

There are a few areas that are predicted for price increase such as Paradise Valley, Scottsdale and the Biltmore area however those places are popularly known for their “affluent buyers and renters,” she says.

“Talking to a growth expert, they said metro Phoenix, Las Vegas and Salt Lake are going to see a lot of new residents,” Reagor said.

To compare the California residents’ current situation, Reagor referred to the Oakland fires that happened in the 1990s. If the insurance companies could not accommodate the residents’ needs, the majority of them relocated to similar cities.

Arizona is forecasted to see a new population in the coming months due to the uncertainty and fight to rebuild the Los Angeles community.