It took a few days before the phones began ringing, but when they did, it was like nothing Realtor David Bronson had ever imagined.
“It was, ‘I need a house, I need it now!’” said Bronson, who runs an agency in Chico, a Northern California university town where real estate is usually a sedate if not sleepy business.
“It’s just a frenzy. I’ve never even heard of anything as wild as this.”
The reason is a simple but unprecedented case of supply and sudden demand: The Camp fire that swept through the nearby town of Paradise on Nov. 8 destroyed 18,000 buildings, including more than 13,000 homes, leaving many of the area’s residents and workers homeless and desperate.
It’s created what likely will be a long-term housing crisis in the area. And, for the moment, it’s made Chico, 15 miles away, perhaps the hottest housing sales market in the country.
Three weeks ago, there were 240 to 250 homes for sale in Chico proper, local agents say. As of the end of last week, an estimated 200-plus were in escrow, often after hurried, on-the-spot offers $50,000 and more over the asking price.
One of those buyers is Paradise Mayor Jody Jones whose longtime home on the hill was destroyed in the fire.
Jones and her husband spent several days after the fire unsuccessfully looking for a place to rent but, “every available rental was gone by Saturday morning” two days after the fire. “We looked at each other and said maybe we should try and buy.”
Her home insurance company had already written a check for the full value of her destroyed Paradise home. Other buyers are dipping into retirement accounts. Jones and her husband bid on several homes in the next few days, each time losing out amid stiff competition.
On Wednesday evening, less than a week after the fire, they toured a nondescript tract house for 10 minutes, then - sitting in the dark in their agent’s car out front - wrote an offer “significantly” more than the asking price. They got the house, outbidding at least four others.
They will live there until they can rebuild in Paradise, which may be three or more years away. “For me it is going to be a very busy year with work the Town Council has to do,” she said. “I need a base to operate from or couldn’t do my job.”
The sales pace has barely let up in the weeks since, real estate brokers said. In fact, it’s now encouraging some speculative behavior.
Realtor Adam Pearce estimates some Chico-area homeowners are putting their houses on the market to take advantage of the frenzy that includes offers in some cases $100,000 above asking prices.
Pearce estimated that the median sales price of a Chico home was around $310,000 before the fire, and now may be in the $370,000 range.
He said he fears some people, desperate and emotional, are paying too much. Long-term, the market will stabilize, he said, and if new-home building occurs as expected in Chico and in Paradise, home prices could drop below today’s inflated levels.
“In two years, we will have a ton of new inventory and prices are going to drop again,” he said. “Our market can’t support that sales price. It is an inflated market and you are going to get stuck.”
Pearce is president of North Valley Property Owners Association, a group of owners of 22,000 Northern California rental units. He is pushing the city, county and state to reduce building regulations so that builders can get more housing on the market faster.