Burn, Baby, Burn? With Half of Arizona Homes Underwater, Some People May Hope Wildfires Solve Their Problem
With half of Arizona homes worth far less than the mortgages owed on them, some homeowners may be secretly wishing the wildfires would pay their property a visit.
We ran that idea past a couple of real estate agents today, and both agreed it makes sense.
"A fire could be a blessing in disguise if I'm upside down in my home and have insurance," says Carlos Jessup, who sells homes for people in northern Arizona.
Arizona was one of the hardest-hit states in the real estate meltdown. Property values plunged to half of what they were during the boom in the mid-2000s. A new report by research firm CoreLogic shows that a solid 50 percent of Arizona homes are still underwater. Only Nevada has fared worse.
Now, the wildfire disaster in the White Mountains is likely to be followed by an economic one. Homeowners will see their property values drop further if they're surrounded by a charred wasteland.
Levels of insurance coverage vary, but banks typically insist that mortgages are covered by insurance in case of a major problem. Often, says Tucson real estate agent Judy Smedes, "if the house burns down, the mortgage companies get the money."
People with underwater mortgages dwell on their options and might consider fire an escape hatch.
"The mortgage would be paid off through your insurance, and off you go," Smedes says.
Many of the mountain homes threatened by the wildfires are second homes, and so might have fewer sentimental possessions inside.
Firefighters have so far done a good job protecting structures even as the Wallow Fire and Horseshoe fire claim a total of more than a half-million acres.
Maybe too good -- considering that many homes in the area aren't likely to be worth what's owed on them until the pine trees grow back.
Get the This Week's Top Stories Newsletter
Every week we collect the latest news, music and arts stories — along with film and food reviews and the best things to do this week — so that you'll never miss Phoenix New Times' biggest stories.