SOURCE: RealtyTrac

RealtyTrac

April 06, 2016 00:01 ET

Porter Ranch Home Sales Down 44 Percent in Three Months Following Gas Leak Discovery, Cash Sales Share Up 50 Percent

4.8 Million Homes Worth $1.3 Trillion Within 10-Mile Radius of 319 Similar Facilities Identified on RealtyTrac's Pre-Diligence Website HomeDisclosure.com

IRVINE, CA and CARTERSVILLE, GA--(Marketwired - April 06, 2016) - RealtyTrac® (www.realtytrac.com), the nation's leading source for comprehensive housing data, and Greenfield Advisors (www.greenfieldadvisors.com), a leading economic and real estate research firm, today released an analysis of the unprecedented gas leak in Porter Ranch, California, on the local housing market, and also calculated the potential impact on other local housing markets from 319 underground natural gas storage facilities across the country. 

Out of the 117 million homes available for search on RealtyTrac's property pre-diligence website, www.HomeDisclosure.com, 4,826,374 (4 percent) worth an estimated $1.3 trillion in cumulative market value are within a 10-mile radius of an underground natural gas storage facility like the one that leaked in Porter Ranch. The website allows consumers to find out if a home they own or are interested in buying is within a 10-miles radius of an underground natural gas storage facility and provides detailed information about each of these facilities.

The Porter Ranch analysis shows that in the three months following the discovery of the gas leak in late October 2015, home sales in the Porter Ranch zip code (91326) plunged 44 percent while the share of all-cash sales spiked 50 percent during the same time period. Meanwhile, the median home sales price in Porter Ranch in the three months following the discovery of the gas leak dropped 1 percent.

"Such a spike in the percentage of cash sales in an area in such a short period of time certainly indicates a market disruption," said Dr. Clifford A. Lipscomb, Director of Economic Research at Greenfield Advisors. "Market disruption is further signified by the number of families that requested relocation out of the Porter Ranch area as well as the number of health effects reported by area residents. Also, with further research, you might find that lenders are less willing to lend on a property located in the Porter Ranch area."

"While median home prices have somewhat surprisingly held steady in the wake of the gas leak discovery, the sharp drop-off in sales paired with the spike in cash sales indicates quickly eroding demand for homes in Porter Ranch, particularly from buyers who rely on financing -- far and away the majority of buyers in the housing market," said Daren Blomquist, senior vice president at RealtyTrac. "The impact of the gas leak is even clearer when sales within the ZIP code are plotted on a map. Sales north of Highway 118 -- closer to the actual gas leak where higher levels of methane have been documented -- are down 60 percent, while sales south of the 118 are down 14 percent."

View interactive heat map of home sales in Porter Ranch before and after gas leak discovery.

44 percent drop in sales more than twice the typical seasonal drop
Although a seasonal drop in home sales is typical in the three-month period from November to January, the 44 percent drop in the Porter Ranch ZIP code was more than two times the drop during the same time period countywide in Los Angeles County (17 percent seasonal drop); statewide in California (18 percent seasonal drop); and also well above the seasonal drop of 25 percent nationwide, where some housing markets are more heavily impacted by weather during the late fall and winter months.

Furthermore, the 44 percent decrease in home sales in the three months following the discovery of the gas leak was also more than twice the average seasonal drop (16 percent) in the Porter Ranch ZIP code during the same three-month period in each of the past five years.

50 percent increase in share of cash sales five times the countywide increase
The 50 percent spike in the share of cash sales in the three months following the discovery of the gas leak was five times the increase in share of cash sales countywide in Los Angeles County during the same time period (up 10 percent); more than four times the increase in share of cash sales nationwide during the same time period (up 11 percent); and more than three times the increase in share of cash sales statewide in California during the same time period (up 14 percent).

Furthermore, the 50 percent increase in share of cash sales in three months following the discovery of the gas leak was also more than twice the average seasonal increase in cash sales share (23 percent) in the Porter Ranch ZIP code during the same three-month period in each of the past five years.

Facilities posing most potential risk to local housing markets
Using the RealtyTrac data, Greenfield created three indexes calculating the potential risk that each of the 319 underground natural gas storage facilities poses to its local housing market. One index is based on the total cumulative property value of single family homes and condos within 10 miles of the facility. The second index is based on the total cumulative property value of single family homes and condos within three miles of the facility. The third index is a weighted index based on a combination of total single family homes and condos within 10 miles of the facility and the risk associated with the flow of gas into the facility based on a ratio of the maximum daily delivery volume to working gas capacity.

                                 
Company Name   Field Name   County   State   Total Estimated Value of Homes Within 3 Miles   Total Estimated Value of Homes Within 10 Miles   Index1 Rank   Index2 Rank   Index3 Rank
SOUTHERN CALIFORNIA GAS COMPANY   PLAYA DEL REY   Los Angeles   CA   $34,479,178,224   $294,746,483,297   1   1   3
SOUTHERN CALIFORNIA GAS COMPANY   ALISO CANYON   Los Angeles   CA   $10,379,561,379   $125,406,800,120   2   2    
SOUTHERN CALIFORNIA GAS COMPANY   LA GOLETA   Santa Barbara   CA   $10,231,191,971   $38,637,066,965   3   6    
SOUTHERN CALIFORNIA GAS COMPANY   HONOR RANCHO   Los Angeles   CA   $7,204,960,126   $33,130,475,820   4   8    
HILCORP ALASKA LLC   KENAI   Kenai Peninsula   AK   $6,719,589,097   $21,533,748,398   5       6
PACIFIC GAS AND ELECTRIC COMPANY   LOS MEDANOS   Contra Costa   CA   $5,303,009,880   $30,166,812,003   6        
UNDERGROUND STORAGE LLC   PIERCE JUNCTION   Harris   TX   $4,612,960,725   $94,188,450,260   7   3   5
ONEOK TEXAS GAS STORAGE LP   SALADO   Gaines   TX   $4,287,685,174   $61,682,164,909   8   4   7
CONSUMERS ENERGY COMPANY   LYON 29   Oakland   MI   $4,095,227,730   $38,073,634,560   9   7    
EQUITRANS L P   GAMBLE HAYDEN   Allegheny   PA   $3,954,083,445   $49,211,017,425   10   5   2
KATY STORAGE TRANSPORTATION LP   KATY HUB & STORAGE   Fort Bend   TX   $3,697,553,418   $31,677,027,439       9    
MICHIGAN CONSOLIDATED GAS COMPANY   WEST COLUMBUS   St. Clair   MI   $1,539,602,660   $30,626,460,228       10    
MICHIGAN CONSOLIDATED GAS COMPANY   WASHINGTON 10 COMPLEX   Macomb   MI   $2,577,552,445   $30,045,008,616           1
NATIONAL FUEL GAS SUPPLY CORPORATION   CORRY STORAGE   Erie   PA   $2,604,464,914   $7,647,077,536           4
EQUITRANS L P   TEPE   Allegheny   PA   $2,127,329,424   $30,272,646,430           8
NATIONAL FUEL GAS SUPPLY CORPORATION   SUMMIT STORAGE   Erie   PA   $1,429,106,688   $7,378,440,590           9
ATMOS ENERGY CORPORATION   GOODWIN STORAGE FIELD   Monroe   MS   $1,051,098,490   $10,716,755,094           10
                                 

Report Methodology
For the analysis, RealtyTrac and Greenfield Advisors analyzed sales data derived from publicly recorded sales deeds and mortgage deeds collected by RealtyTrac. Sales counts and median prices include arms-length sales of single family homes and condos. Cash sales are transactions where there is a sale deed but no mortgage or deed of trust recorded in connection with the sales deed. 

Data Licensing and Custom Report Order
The data used for the analysis are available via bulk license or in customized reports. For more information contact our Data Solutions Department at 800.462.5193 or datasales@realtytrac.com.

About RealtyTrac
RealtyTrac is a leading provider of comprehensive U.S. housing and property data, including nationwide parcel-level records for more than 130 million U.S. properties. Detailed data attributes include property characteristics, tax assessor data, sales and mortgage deed records, distressed data, including default, foreclosure and auctions status, and Automated Valuation Models (AVMs). Sourced from RealtyTrac subsidiary Homefacts.com, the company's proprietary national neighborhood-level database includes more than 50 key local and neighborhood level dynamics for residential properties, providing unrivaled pre-diligence capabilities and a parcel risk database for portfolio analysis. RealtyTrac's data is widely viewed as the industry standard and, as such, is relied upon by real estate professionals and service providers, marketers and financial institutions, as well as the Federal Reserve, U.S. Treasury Department, HUD, state housing and banking departments, investment funds and tens of millions of consumers. In January 2016, RealtyTrac announced the beta launch of its new consumer focused, mobile first, property report website, HomeDisclosure.com, which provides real estate consumers and professionals alike, detailed pre-diligence data for nearly 120 million U.S. homes.

About Greenfield Advisors
Founded in 1976, Greenfield Advisors is a boutique economic and financial analysis firm that provides government and private sector clients with customized consultations and advisory services. Known best for its analysis of complex economic, financial, and real estate situations in high-profile litigation matters, Greenfield Advisors also performs feasibility studies, business plans, and appraisals for its clients. Greenfield Advisors' subsidiary Bartow Street Capital LLC serves as its investment banking and capital raising arm, and its subsidiary Accre LLC acts as an investment principal.

Image Available: http://www.marketwire.com/library/MwGo/2016/4/5/11G091957/Images/Porter_Ranch_-_Home_Sales-cc2ed538430fa99ca94fd44747de407d.jpg

Contact Information