Insights into the Marshall Fire, Effect on Real Estate – BizWest

The Marshall Fire that tore through Boulder, Superior and Louisville County on December 30, 2021 was the most destructive fire in Colorado history and left a gaping hole in our community that will take years to recover. completely. Although we are still early in the recovery process, we can glean some early insights and hopefully help people navigate the next chapter in their recovery story.

1. We have an amazing community. I mean, we always knew that, didn’t we? It’s why so many of us choose to live here, but it’s also sad that sometimes it takes disaster to bring out the best in people. The stories of selflessness, sacrifice and generosity as people stepped up to care for each other in this time of crisis were enough to melt even the coldest heart. There has been a huge outpouring of financial support, both locally and nationally, from the small GoFundMe pages to help individual families to the Elevations Fire Relief Fund which has raised over $1 million and the Realtor Relief Foundation offering $2 million to help victims through this difficult time. . Perhaps even more impactful, however, was the generous outpouring of volunteer hours at places like the Disaster Assistance Center and the Marshall Fire Free Store. We should all appreciate our amazing community and not take its members for granted, which brings me to my second point.

2. It would be an even greater tragedy to lose our displaced neighbors and community members. As it turns out, there are several significant barriers faced by those displaced by the Marshall Fire who wish to remain in our community.

First, a significant percentage of displaced homeowners were grossly underinsured. A homeowner’s insurance advocacy group estimates that two-thirds of fire victims in the United States are underinsured, and while there are no published figures yet for the fire of Marshall, it’s fair to say that percentage probably isn’t far off. Many homeowners find that they are underinsured between $250,000 and $500,000 (or more) and as such may not be able to rebuild their home even if they want to because almost no bank will only make a secondary loan in such circumstances (remember that people’s mortgages survived the fire, even though their homes did not). Hopefully there are innovative lenders who will find a solution.

Second, the amount of bureaucratic paperwork imposed on landlords by their local governments also has a major impact on victims’ ability to rebuild. On the one hand, Superior will offer discounts on building permits and fees to victims of the Marshall fire and moved quickly enough to exempt them from the city’s recently adopted 2021 International Energy Conservation Code, which which will make the reconstruction process faster and more affordable for the victims. Louisville, on the other hand, has been reluctant to make similar concessions and is only considering it after strong protests from the community. The City of Louisville said any WEICan-related exemption (which would save about $77,000 per home) will only go to victims who actually rebuild on their lots. Unfortunately, this is a further injustice to those who were already underinsured and cannot rebuild as it will negatively impact the value of their lots when they go to sell.

Third, for those who cannot rebuild, they will face an extremely difficult real estate market.marked by record stocks, record prices and exceptionally fierce competition.

So, being underinsured, facing heavy rebuilding red tape and unable to compete in the fiercest real estate market in decades, many of our valued community members will likely be forced to move elsewhere. This is perhaps the greatest tragedy of all.

What can people do in this situation? Well, they might want to consult with a public expert, who could help them maximize their insurance product. They should probably get a quote from a private debris removal company and see if their insurance will cover it to avoid the FEMA quagmire. They (and we) can continue to advocate at the local government level for reasonable reconstruction demands. And, finally, if they are considering buying a replacement home, they need to find an experienced realtor and lender as soon as possible.

Jay Kalinski is the 2020 owner of ReMax of Boulder and ReMax Elevate.

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