This story was originally published in Builder.

Wildfires threaten $1.5 trillion worth of homes in the United States, representing a disproportionately large portion—7.7 percent—of U.S. housing value, according to Redfin.

The counties at the greatest risk—California's Los Angeles, Orange, and Santa Clara—are among the country's most expensive housing markets and are already plagued by ongoing inventory shortages. But local real estate agents say the wildfire risk is not deterring home buyers from continuing to put down roots in these communities.

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"People who are still in shock from losing their homes and possessions from the October fires are greeting one another at open houses while comparing notes on the hotels or rentals where they are temporarily living," said Redfin Santa Rosa agent Starling Scholz. "People view wildfire risk as a price of living in California that's well worth the rewards: beautiful weather, nature and well-paying jobs."

Below are the Top 10 counties for risk of wildfire destruction, ranked according to the estimated total value of homes at risk. To be considered, there had to have been at least five major fires recorded by the Federal Emergency Management Agency (FEMA) in the county since 1960. Los Angeles, Orange, and Santa Clara counties top the list, which is dominated by California counties. The only non-California counties to make the list were Harris and Dallas counties in Texas and Clark county in Nevada. California is so predominant in the ranking not only because of the state's high frequency of wildfires, but also because of its desirable, expensive housing markets. If demand for homes in these places doesn't subside, inventory shortages and affordability crises in these places will likely continue as wildfires inevitably destroy more homes each year.

Top 10 U.S. Counties for Fire Risk

Major Fires in County since 1960 (FEMA)
Estimated Median Home Value in County (Census data)
Estimated Total Value of Homes in County (Census data, in billions)
# of Homes at Risk in County (Census data)
Change in Homes for Sale (December 2016-December 2017)
Los Angeles County, CA
Orange County, CA
Santa Clara County, CA
San Diego County, CA
Harris County, TX
Riverside County, CA
San Bernardino County, CA
Dallas County, TX
Ventura County, CA
Clark County, NV

"Restrictive zoning and under-building make wildfires even more damaging for homeowners and renters in affected areas. Despite strong demand and severe inventory shortages, California has built the fewest number of homes per new resident of any state, with just one unit for every four new residents, compared to one new unit for every 1.8 new residents nationally," said Redfin chief economist Nela Richardson. "When people whose homes just burned down are jumping back into bidding wars to buy new homes in the same area, you know wildfires alone won't cool these competitive markets. However, California's chronic lack of homes and eroding affordability make recovering from a natural disaster much more challenging than in states like Texas with more adequate housing supply."

Redfin Santa Barbara agent John Venti has noticed that while wildfires certainly pose a risk to homes, California's overall affordability is a bigger concern for home buyers.

"I was touring with clients last month, and in the 15 minutes it took to see the home, our cars were completely covered in ash from nearby wildfires," said Venti. "The home buyers were not fazed. If anything, people are more often deterred from buying homes in this area by high gas prices and high taxes than wildfires."

For the people who are still interested in buying homes in wildfire zones, Venti has some advice.

"It's important to get a fire insurance quote before falling in love with a home," he said. "We've had people and properties receive exorbitantly high quotes for fire insurance. Others were flat-out denied coverage because the home was too risky or the buyer had a large outstanding claim from a previous fire. California FAIR Plan property insurance may be able to provide insurance for homes that have been denied coverage."

The full report, complete with a detailed methodology, can be found here.

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