Home sales in Porter Ranch community of Northridge were hit from the Aliso Canyon gas leak that lasted for three months last fall and winter, according to data analyzed by real estate research firms.
Irvine-based RealtyTrac, which follows housing data, and economic and real estate research firm Greenfield Advisors in Cartersville, Ga. and Seattle, Wash., report that sales activity of Porter Ranch homes fell 44 percent between November and January compared to the prior three-month period. Also, the number of all-cash sales – which don’t need approved financing – soared 50 percent in the same time period.
The increase in the amount of cash purchases of Porter Ranch homes during the gas leak was five times the 10 percent increase in L.A. County for the same time period, RealtyTrac said, and three times the increase in the amount of cash sales across California.
Surprisingly, the two firms said, Porter Ranch homes’ median price fell only 1 percent. Still, said Clifford Lipscomb, director of economic research at Greenfield Advisors, the combined sharp drop in sales volume and the simultaneous dramatic rise in cash sales shows demand for homes near Southern California Gas Co.’s hillside storage facility quickly eroded, especially from potential buyers needing financing – who make up the majority of buyers.
“Such a spike in the percentage of cash sales in an area in such a short period of time certainly indicates a market disruption,” Lipscomb said. “Also, with further research, you might find that lenders are less willing to lend on a property located in the Porter Ranch area.”
Home sales activity normally slows between November and January, RealtyTrac said. But in Porter Ranch, sales fell more than twice the five-year average drop of 16 percent. The drop-off is also twice the amount of the normal seasonal slowdown countywide, the housing data firm said.
Sales activity of homes north of Highway 118 – in areas where higher levels of methane were found – were down 60 percent, while sales of homes south of the highway dropped 14 percent, according to RealtyTrac.
Southern California Gas’s well leak in the Santa Susana Mountains was discovered Oct. 23 and was sealed Feb. 17.