But it has a view
Bluebird CANYON residents Robert Cassard and Bara Waters sympathized with neighbors a few blocks away who lost their homes last month in the Laguna Beach landslide. But the disaster that destroyed or damaged 18 homes just days after the couple opened escrow on their four-bedroom house may as well have been in another county for the lack of slide-related fallout the sellers have faced.
“I never had a worry about the deal,” said Cassard, adding that the slide was limited to one small area. “It’s like saying, ‘Do you worry about being struck by lightning?’ It’s such an unusual thing.”
Realty agents across the Southland continue to praise the resiliency of the market, even in areas that slid, oozed and flooded in the year’s near-record rains. After a mere blip in purchase activity in affected areas -- lasting from days to, at most, a couple of months -- buyers and builders leapt back in with enthusiasm. The lure of canyon and hillside properties still propels people to pay top prices, agents say.
Whether in Bluebird Canyon in Laguna Beach, where homes are being built just above the recent slide area, or the hills of Malibu, where for-sale signs have sprung up like wildflowers near streets that were closed by mudslides just three months ago, buyers remain bullish on hillside properties, no matter the slippery slopes.
Although the landslides were tragic for those whose homes were damaged or destroyed, real estate experts say that, overall, Southern California’s booming housing market escaped unscathed.
Certainly, some listings were briefly affected: If a road is closed and buyers can’t get there, potential sales slow. But homes in areas where the slides were quickly cleared up have gotten peak market prices, said Malibu Pritchett-Rapf agent Cormac O’Herlihy.
Historically, the pace of recovery in areas hit by a disaster has varied. After the 1993 fires, it took the Calabasas area and Laguna Beach, Malibu and Topanga canyons about four years to bounce back. Recovery also was affected by the recession in Southern California. Most real estate experts agree that recovery from last winter’s storms, in which about 90 homes were red-tagged just in Los Angeles, is well under way.
Unlike the period after the 1994 Northridge earthquake, when bargain hunters grabbed up bank-owned and damaged homes as San Fernando Valley home prices dropped, buyers and developers are not rushing in this time in the hopes of making a profit. The limited scope of the recent disaster, plus high prices and owners determined to hang on to their properties, have discouraged such activity, agents say.
“I’m not seeing any price impact at all right now,” Ray McAfoose, an agent at South Laguna Coldwell Banker, said of Bluebird Canyon, where average home prices are about $1.3 million. “Not even a hiccup.”
Cassard and Waters, 11-year residents of Bluebird Canyon, where a 1978 slide destroyed 24 homes, weren’t worried about their sale going through, but they did expect the Bay Area buyers of their home to request a geology report. Instead, the buyers showed up with a contractor and an engineer to discuss room additions, Cassard said.
Though the disaster didn’t hurt the Cassard-Waters sale, owners listing properties adjacent to slide areas might not be so lucky. To them, First Team realty agent Steve Parks of Laguna Beach offers this advice: Wait awhile. Damaged homes and mud put few buyers in the mood to purchase.
Sellers must first make their properties safe, guided by geologists’ recommendations. And, he said, they should be prepared to extend credit to buyers for mitigating work that has to be done.
New technology is available to help those contemplating a purchase in a slide zone. For instance, satellite maps developed by the German company Geoka can provide digital terrain models of single properties or whole towns; they also can detect geological weak zones, including sinkholes, rockslides and mudflows, and point out the locations of ancient landslides. The service costs about $300.
It behooves residents in so-called weak zones, especially those living adjacent to slide sites, to investigate the structural integrity of their own properties, geologists say.
The ability to shore up weak slopes has provided a sense of hope to those who lost their homes in Bluebird Canyon.
“Of course the slide was devastating, but I consistently saw [my friends’] hope to rebuild,” Parks said. “There is a resilience among the people around here to take that on.”
It’s not unusual for a victim of a slide or fire to rebuild on the same site, said Laguna Coldwell Banker agent Derik Brian. After installing caissons and other safety measures, they often can build bigger and more valuable homes.
Replacing homes lost to fire is easier than rebuilding those lost to slides, however, because insurance policies typically cover fires losses, but they do not cover landslides. Owners of slide-damaged homes often must rely on cities and government entities to rebuild the hillsides their houses occupied. The Federal Emergency Management Agency provides funds and low-cost reconstruction loans.
Up the coast in Malibu, hillside areas have suffered no lasting stigma from last winter’s slides of rock and mud, agents say. A home on hard-to-get-to Via Vienta off of Encinal Canyon Road, one of the thoroughfares affected by the rains, recently sold for nearly $1.6 million after 18 days on the market, said Cliff Waeschle, a Malibu Coldwell Banker agent.
“Buyers are so sophisticated that if they didn’t know about conditions in the Malibu hills it would mean they’re from out of state,” Waeschle said. “When someone wants to buy in this area, they will regardless.”
Some homes in Malibu’s affected hillside and canyon areas that have been on the market for more than a month may simply be priced too high, agents say. Generally, though, demand on that stretch of coast far exceeds supply. The current inventory -- 120 homes were listed for sale one week ago -- is only one-third of what it was in the mid-1990s, Malibu agent O’Herlihy said.
Lupe and Jesus Vasquez also benefited from a hillside inventory. In March, the couple feared they would not be able to sell their four-bedroom Eagle Rock home because of its location at the bottom of a hill, with homes perched above it and red-tagged ones next to it.
The scarlet notices affixed to their neighbors’ front doors practically screamed “uninhabitable,” casting a negative light, the Vasquezes assumed, on their own property, which had undergone extensive and successful landslide remediation years before.
Yet a neighbor familiar with the perils of the area bought the home for $600,000 just six weeks after hillsides slid nearby.
“There is so much press about the risk of buying in the hills, from fires last year to slides this year,” said Joe Reichling, a Sotheby’s International Realty agent in West Hollywood. “Yet, there is some kind of mystical allure to living [here].”
That allure propelled DNC Development to build six hillside homes just down the street from the Vasquez house and the red-tagged homes.
The builder bought the land 18 months ago and began construction before the rains, said Amitesh Damudar, the Pacific Meridian broker in charge of selling the homes. The builder is installing caissons and retaining walls.
The 2,000-square-foot four-bedroom homes are expected to be completed in a year and will list in the high $700,000s, he said. He’s counting on the public’s short memory and its overriding desire to live in homes with views. If history is an indicator, he’s making a sure bet.
