By Catherine Reagor | Arizona Republic
Southern California’s wildfires could drive a wave of people from the ravaged area to metro Phoenix, and they need homes.
Requests from Los Angeles-area residents looking for Valley rentals have already jumped, and many want luxury homes like the ones they’ve had to leave.
The housing demand is likely to give the Phoenix-area housing market a boost that could bump up rents, home prices and sales.
The uplift would come after higher mortgage rates slowed record Valley home sales and price runups spurred by the pandemic, though home sales did unexpectedly tick up in December after the election.
The Valley led the nation for rent increases in 2021-22, but tenant costs have dipped during the past few years as more apartments were built and prices became unaffordable for too many renters.
The Phoenix area had a severe housing shortage in 2020 but has been building out of it slowly.
A population surge, even from temporary residents, could worsen the housing shortage for current Valley residents.
“There’s going to be a flight of people from Southern California to nearby cities Phoenix, Salt Lake and Las Vegas,” said growth expert Mark Stapp, director of the master of real estate development program at Arizona State University. “It will absolutely impact the Valley’s growth as people with the means have a chance to get the hell out.”
Metro Phoenix’s relatively affordable housing prices have long been a draw for California residents. The Valley’s job market is strong now, and people considering moving can likely find new jobs or may be able to work remotely.
Arizona has rising home insurance costs, and homeowners in the northern part of the state, where wildfires have been more frequent, have lost coverage.
But Arizona’s homeowner insurance problems aren’t as bad as for California homeowners.
Median rent in Phoenix area is hundreds below Los Angeles
“Our phones are blowing up from LA residents looking for rentals,” said real estate agent Scott Grigg of Griggs’s Group Powered by The Altman Brothers. “The area was devastated. Those poor people have nowhere to go there and need at least a temporary place to lay their heads.”
He said he expected to see people from Southern California come to the Valley and see the area’s quality of life and “fall in love with it.”
Rents are much higher in Southern California than in the Valley and have climbed with the surge in demand from people recently displaced.
The median rent in the Los Angeles area is $2,780 for both homes and apartments, according to Zillow. That compares to $1,900 in metro Phoenix, which is $100 below the U.S. median.
Some Southern California residents impacted by the fire who need rental homes are seeing shocking price jumps in the LA area, and some are paying them because they have no other choice if they want to stay.
“A few bad actors have taken advantage of the crisis, raising rents by 50-70% or more in the immediate aftermath of the fires,” said Anthony Luna, a real estate and property management author and CEO of LA-based Coastline Equity.
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Another Opinion
“In general, we can expect to get some (Californians) but they used to come here because our cost of living was so much lower, and they’re finding, in some cases, that the cost of living here is just as high as parts of California, and that might push them to other places of the country,” Tina Tamboer, senior analyst for The Cromford Report told KJZZ Phoenix.
Related: REALTOR® offers luxury Paradise Valley home to California fire victims