Gas leak disrupts Porter Ranch housing market
The massive natural gas leak above Porter Ranch that caused thousands of families to flee, complaining of headaches, bloody noses and nausea, appears to have had a secondary effect that residents feared: It disrupted the neighborhood’s housing market.
Sales from December to February declined 20% from a year earlier, though prices held up after the leak that began Oct. 23, according to data from online brokerage Redfin. In contrast, both sales and prices rose countywide during the same three-month period.
Syd Leibovitch, president of Rodeo Realty, said the figures suggest that some buyers were spooked by the leak at the Aliso Canyon storage facility that was finally sealed Feb. 18 — though he thought the situation could have been worse.
“There were people that wouldn’t buy a house with the uncertainty over the gas leak,” Leibovitch said. “I thought no one would buy anything.”
In total, 61 homes were sold from December to February, compared with 76 a year earlier in Porter Ranch’s 91326 ZIP Code. The median price was up 5.7% to $670,000, less than in some other affluent areas.
In Calabasas and Hidden Hills — two other upscale neighborhoods in the San Fernando Valley — combined sales rose 44% and the median price climbed 30%. Countywide sales increased 5.8% and the median price climbed 8.7%.
Real estate agent Amber Dolle of John Aaroe Group said some of the disruption arose from the simple fact that many residents in the community of 30,000 left as the damaged well spewed gas for months.
She was working with a couple to sell their home before the leak, but as methane wafted over the neighborhood, the couple moved into temporary housing elsewhere.
“They relocated and it got to be too much,” Dolle said. “And they were thinking, ‘Would we even get as much?’” for their home.
Some residents are still living in temporary housing paid for by Southern California Gas Co., operator of the well.
And last month the company said it would hire a private contractor overseen by the Los Angeles County Department of Public Health to test homes for trapped methane and mercaptans, the additives that give odorless methane its rotten-egg smell and have been blamed by some residents for continued health effects.
The well ultimately spewed nearly 100,000 tons of methane and was deemed the largest methane gas leak in U.S. history. That has raised concerns that home values could be permanently affected in the neighborhood.
Disclosures for homes now include a mention of the community’s proximity to the gas field and the recent problems. And some lenders began asking for two appraisals on a property to ensure that homes weren’t losing value.
The Los Angeles County assessor’s office also started looking into whether the assessed value of the homes has changed for tax purposes. Assessor Jeffrey Prang said any conclusion now would be “premature.”
“We are still collecting data for the last couple months to determine where those values are going,” he said.
Despite the concerns, some real estate agents doubted that the effects on the housing market would be permanent. The neighborhood had been performing well in the fall, with sales and prices rising in the three-month period from September to November.
Scott Himelstein, an agent with Park Regency Realty, said he didn’t see any slowdown. Buyers he has spoken with viewed the problem as a temporary inconvenience that didn’t derail their desire to live in a master-planned community with good schools.
The agent said he had six offers on a three-bedroom home he listed in January. The home sold for $673,000 — more than $20,000 above the list price. Since the leak ended, Himelstein said, he’s also held open houses where more than 60 groups of people strolled through over a five-hour period.
“There is more demand than there is supply,” Himelstein said. “It’s very similar to the rest of the San Fernando Valley.”
Leibovitch of Rodeo Realty agreed. “Now that the leak is stopped, we are seeing an increase in activity.”
However, given the community’s size, data can fluctuate and a clearer picture of the leak’s effects will emerge in coming months. Since the leak, more residents have put their homes on the market.
From November through February, the number of homes listed for sale rose each month compared with a year earlier before posting a 50% pop in March, when 99 were on the market, according to Redfin. If sales keep falling while inventory expands, values probably wouldn’t hold so steady.
Daren Blomquist, senior vice president with RealtyTrac, a firm that also reported falling sales, said he expects that there will be some impact on prices over the next year.
“When looking at a market, the first sign of weakness is sales slowing down, and then the next domino to fall would be values,” he said.
Some homeowners have that very worry.
David Balen and his wife, Nena, bought their four-bedroom home for $1.4 million in 2005 and plowed an additional $150,000 into landscaping and a pool. During the leak, Balen said “he couldn’t breathe” when walking around the neighborhood and his daughter had stomach issues and bloody noses.
To escape, his family moved into temporary housing in Tarzana.
“We want to keep our value at the end of the day,” said Balen, president of the Renaissance homeowners association in Porter Ranch. “We don’t know where we stand.”
Balen said he has talked with his wife about selling, but they aren’t planning to now. They wonder how much they could get and they want to stay in Porter Ranch anyway.
“I love the community,” Balen said.