After gas leak, Porter Ranch homeowners hold their breath over property values
The capping of a massive gas leak this month brought relief to the Porter Ranch community. But as thousands of displaced residents return to their homes, many are worrying if their property values have taken a big hit.
The four-month leak in Aliso Canyon laid bare that Porter Ranch is near an enormous natural gas storage reservoir and that leaking wells can make life in the community unpleasant. The question is whether those facts will mean declining real estate prices in the upscale, master-planned community.
So far, data on home sales suggest that prices in Porter Ranch haven’t changed much since the gas leak started. But that could change.
“We’ll start getting a picture of things in about three months in terms of indexes that are published that show market trends, and market trending is very important in a case like this,” said Randall Bell, an economist and appraiser who specializes in stigmatized properties and is now working for a law firm that is suing Southern California Gas Co. over the leak.
Resident Krista Joiner is one seller who believes that her property has lost value. Her five-bedroom home fell out of escrow in December. It is now back on the market at a slightly reduced price.
“There is a real nervousness from people,” Joiner said. “I understand. I’m scared and I live there. It’s an unsettling feeling to not know whether it’s safe or not safe.”
In December, 33 homes changed hands in Porter Ranch’s 91326 ZIP Code, the busiest December since 2012, according RealtyTrac. With the average transaction taking between a month and six weeks to complete, most of those sales would have started after the gas leak began Oct. 23.
In those transactions, sellers weren’t offering bargain prices. The median price of homes sold in Porter Ranch rose to $710,000 in December, the highest median price since before the housing crash, according to RealtyTrac.
Those figures, however, don’t account for months of media coverage of a gas leak that resulted in criminal charges, regulatory investigations and dozens of personal lawsuits from residents who were left sickened and temporarily displaced.
“It’s common sense. When you have a problem, it gives people uncertainty,” said Leslie Appleton-Young, an economist with the California Assn. of Realtors.
The first week of January saw 32 new home listings in Porter Ranch, according to online real estate firm Redfin. That’s more new listings than in all of January 2015, and the most new listings in the area in a single week in the last three years.
Jan Brzeski, who runs West L.A. real estate lending firm Arixa Capital, said that surge of listings probably shows that some Porter Ranch residents are heading for the exits.
“It looks like some people made a New Year’s resolution saying, ‘Let’s get out of here, or at least try,’” Brzeski said.
But a flood of sellers would drive down prices only if they are willing to accept lower prices. And Brzeski noted that many would-be sellers could change their minds now that the gas leak has stopped.
“It’s evidence that people have decided they want to sell, but there’s still an open question of whether those people will go through with it,” he said.
Real estate agents and others have posted gloom-and-doom stories on Porter Ranch Facebook groups about banks and other lenders saying they won’t offer mortgages in Porter Ranch.
But loan data from RealtyTrac shows that lenders didn’t stop lending after the gas leak started.
“The bottom line for us is that we’ve continued to make loans,” said Tom Goyda, a spokesman for Wells Fargo, the nation’s largest mortgage lender.
Before agreeing to make a loan, lenders have to be satisfied that borrowers have enough income to pay back their loans and can secure homeowner insurance — and that the properties are worth the sales price.
Since the Porter Ranch leak started, some lenders have started asking for two appraisals on a property, trying to make sure that homes aren’t losing value, said Jesse Bishop, a loan officer at Coldwell Banker in Studio City.
Sellers have to disclose hazards and other issues that could affect property values or risk being sued by unwary buyers. Disclosures for homes in Porter Ranch now include a mention of the community’s proximity to the gas field and the recent problems.
Though the leak will no doubt turn off some would-be buyers, others aren’t concerned. Mike Goodman and his wife, Lauren, started looking at homes in Porter Ranch in December, hoping to relocate from Granada Hills.
The Goodmans, who have a 3-year-old and a newborn, wanted to move to Porter Ranch before the leak started and now hope that prices there will dip just enough to give them a good deal on a house.
“I don’t know if prices have come down or not, but we realized that maybe we would be able to afford something we didn’t think we’d be able to,” Goodman said, adding that he’s not that worried about the leak. “It’s been a lot of hype drummed up by lawyers and the media.”
The Goodmans grew up in the North Valley and say they prefer to stay in the area. They like the schools in Porter Ranch.
Those factors are likely to continue to make Porter Ranch an attractive option, said Lindsay Katz, a Redfin agent working with the Goodmans. “The schools are great, everything is new and nice, and that’s not super common in the Valley,” Katz said.
Los Angeles County Assessor Jeffrey Prang and his staff are studying whether the assessed value of the homes has changed for tax purposes. So far, Porter Ranch homes don’t seem to meet the conditions under which assessed value of properties can be reduced.
One is a widespread decline in value, as occurred during the housing crash of the last decade. The Porter Ranch gas leak affected only a relatively small portion of the county.
The second is “misfortune and calamity,” a designation that applies when a home suffers physical damage in a disaster like an earthquake or flood. Porter Ranch houses don’t appear to have suffered any physical damage, Prang said.
“However, it’s clear that what happened is misfortunate and is calamitous, so we are trying to take a very broad approach,” Prang said, noting that he is working with the county’s attorneys to determine what flexibility exists in the statutes that dictate property taxes.
Twitter: @TheCityMaven
Twitter: @jrkoren
Times staff writer Daniela Gerson contributed to this report.
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