Now that the natural gas leak in Porter Ranch has stopped spewing gas into the air after several months, the reflection phase of the disaster—the biggest methane leak in US history—is in full swing. We know now that there's a pretty good chance the Los Angeles area will have blackouts this summer because of it, and now, thanks to a new analysis from RealtyTrac, we're getting a closer look at the marked effect the leak had on the local real estate market and it's not exactly what you'd expect.
As thousands of households fled the neighborhood surrounding the leaky natural gas storage field, investors ponied up to buy houses in the area. (There was a sharp drop in housing sales overall, but we'll get to that in a minute.) During the three months following the late October discovery of the leak (November and December 2015 and January 2016), "The share of all-cash sales spiked 50 percent" compared to the three months before.
The average uptick in cash buyers during the same three-month-over-three-month period in the Porter Ranch zip code (91236) is 23 percent over the past five years.
Housing sales overall were down, though. Unsurprisingly, moving in next to an enormous, raging gas leak was not something most people were interested in. In the three months after October 2015, when the leak was announced, RealtyTrac found that sales in Porter Ranch's zip code "plunged 44 percent." That was nearly three times "the average seasonal drop" of 16 percent that the zip code has seen in the same three months over the past five years. It's also far more than double the 17 percent drop in sales across LA County during the same three-month span.
The sales price of the median home pretty much held fast, dropping just one percent in the three-month period, but the combination of sharply increased cash sales and the overall drop in sales suggests "quickly eroding demand for homes in Porter Ranch, particularly from buyers who rely on financing," says a senior vice president at RealtyTrac.