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Infernos could worsen Bay Area's already brutal housing market

George Avalos, The Mercury News on

Published in Home and Consumer News

Finding a place to live will be just one of the challenges for displaced homeowners, especially if they decide to return to their original residences.

"It could be six to 12 months, or even longer, to rebuild the house, depending how the insurance claims go," Nothaft said. "Then, after that, they have to find the contractors and the construction workers. There's a shortage of skilled construction labor right now."

Experts say there's no definitive answer as to whether home prices will fall, rise, or neither.

"Pricing can go down, possibly, because the area is burned out and not an attractive place to live, but what can push prices up is people are displaced and they need somewhere to live, so the demand goes up," said Randall Bell, director of Landmark Research, which tracks economics issues.

In a foreshadowing of the fires' vast impact, State Farm officials said that, as of Friday afternoon, they have received more than 2,100 homeowners insurance claims and more than 800 auto insurance claims related to the North Bay firestorms.

"It's a mix, a wide range now," said Chris Pilci, a State Farm spokesman. "It could be somebody who had damage from being on the fringes of the fire, or it could be a total loss. We anticipate the claim volume will continue to rise."

Insurance agents have fanned out into the devastated region.

"The first few days, communication was very difficult in that area," said Sevag Sarkissian, a State Farm spokesman. "It's all hands on deck."

The impact of the displaced residents could also ripple beyond the market for buying and selling houses.

"Apartment rents are definitely headed higher," Nothaft said.

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