Looking forward, displaced residents who rented will have to seek new accommodations probably somewhere else. They can ill afford to wait for rebuilding to have a home to rent again. And with our owners, insurance delays are certain and the time to rebuild will slow normal real estate activity. Owners near in and near the burn with their homes for sale, but not damaged by fire, will find fewer potential buyers interested in their homes. This will increase the time on market and eventually erode our property values to some degree.
Home owner’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 damaged home or one still in the fire’s path. Most insurers will jack up premiums for claim filers and over time all of us will be paying more in Ruidoso as loss ratios are finalized over the next 2-3 years. Premiums we pay are as much a look at future risk as they are an insurer’s attempt to recover losses from previous claims. Watch for this 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 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 will fight doggedly to rebuild and return to the life they had while others will probably move away from here never to return again. It will take a while to predict the percentage of residents who will return versus those who will leave but the scars from Little Bear will last and these includes the scars on our housing market.
Valuations and taxes
Little Bear will have a lingering impact on our property taxes. Should the county reappraise the homes that were destroyed, providing a much-needed break to already stressed fire victims? It would seem 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 are already tight and shortfalls loom around every corner. Lowering our tax revenue may actually hurt our community more than it helps the people for whom it was intended. We’ll already experience a tax impact from the properties that will not rebuild. Our tax collections are going to decrease to some unknown extent. Immediate reappraising would only accelerate this decrease. By some estimates, the values of just land could decrease 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 taken a hit that’s certain, but don’t think all is doom and gloom in our mountain paradise. Many 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.