How much is a condo community devalued after a major fire?

[rf134a]

So, Edmonton had the largest residential fire (http://www.canada.com/edmontonjournal/news/cityplus/story.html?id=ec5c1edb-f95a-495c-ae37-029c2b12ad34&k=31992)in its history with $20-25M in damages. (http://www.canada.com/edmontonjournal/story.html?id=aa60bea8-2cd9-47e2-868c-8650c961f35c&k=46377#) Pictures: http://www.canada.com/edmontonjournal/story.html?id=aa60bea8-2cd9-47e2-868c-8650c961f35c&k=46377#


How much would this devalue the units by? There were 18 units that were razed to the ground, such as this one: http://edmonton.comfree.ca/display.html?code=14362

Having purchased, lived in and sold one of these units, I can tell you that they are not worth the asking price. However, I still know people who live there and they now need to sell their units to pay for houses that they built. Would you live there and what would you pay knowing that there was a massive fire and there may be a possibility of damage in the future?

[Dustbunny]

The reports I saw didn't link the fires to anything that wasn't as per code. The problem is in the codes allow for this to happen, and it does seem to happen every time these newer developments have fires (extreme to total damage to the neighbours although the Edt fire was a big one). It would seem under those conditions that these places aren't any less valuable (the ones remaining) than similar construction anywhere else in the city/province because they are all the same (built to code). The ones that will be rebuilt will also be the same value and people will buy them and most people will forget all about it.

I'll bet if you researched similar fires (where neighbouring units burn due to proximity and building materials being what they are) you will find that once it was over, nothing changed when it came to property value and it won't until code changes (and then those places which were built prior to the changes may have some devaluation). It's a shame and people have been screaming about this for a couple of decades, with every fire, but some one some where is not willing to see any changes.

[rf134a]

Hmmm... I don't think it's about being built to code. It's about the fear of another fire that can destroy your possessions. It's like buying a former crack house or a house where someone was murdered there. Those who know will likely avoid it, but of course, there are those that don't care. I guess it's just a bad stigma to have.

[Dustbunny]

Where would the fear come from though? To me, what made that fire so bad is no different than in many other neighbourhoods built to the same standards (close, vinyl siding, access to roof space through walls, etc.). It just happened the fire started there and as happens so many times, started with units being built nearby (if I understand how it went). Once the area is rebuilt and building finished (as long as it's done properly) I don't know that a lot of folks would worry about the fire because what started it no longer exists. It sure didn't make a difference in Calgary when it happened. The rebuilt units were fully occupied in record time, at full price, whether condo or houses.

Yes, deaths or crime in a house is probably a different concern but again, you are talking AB here, housing shortages, construction going as fast as it can, and it's going to take an awful lot to deter buyers from paying top dollar for those places when they can only get the very same thing in other new neighbourhoods anyway.

The real worry is any fire can cause this to happen in most of the new (typically vinyl) neighbourhoods and it's a potentially huge problem, yet they keep on building them and people keep buying. In most of them, if the house next to you starts on fire there is a very good chance your house will take on some major damage and could go up in smoke which it wouldn't if built like they were 50 years ago.