Los Angeles Real Estate News: What are the Effects of the Porter Ranch Gas Leak on the Housing Market?

A recently discovered gas leak just above Porter Ranch calling national attention and causing various diseases to thousands of residents is now becoming a major concern in the housing market.

According to Los Angeles Daily News, the cost of the properties will now have a lesser worth than it was before the gas leak occurred on Oct. 23 at well site SS 25 in the Southern California Gas Co.'s huge Aliso Canyon storage facility in the Santa Susana Mountains.

Almost all of the homes in the area were worth over $1million dollars but might have a lesser value today. The Southland Regional Association of Realtors, an organization based in Van Nuy, reported that the median home price in the Valley for the month of October was $562,000.

Carey Eckert, a realtor from Porter Ranch who has been in the home selling business for almost 13 years, said that the leak is a "business buster." According to him, he has been monitoring his website and there were no significant actions happening there, even in his office. His website served as his indicator whether people are interested in the properties sitting on top of the Valley.

"I could see the traffic go down," Eckert said. This happened after the residents were informed about the said leak.

"I can track traffic on my website and nobody has been searching Porter Ranch or the zip code. I think Porter Ranch still has great appeal and will turn around. I think the long-term impact will be minimal. This is a short-term thing," he added.

Yet, Gregory J. Wilcox of the Los Angeles Daily News contradicted this. According to him, the gas leak will have a long term effect on the housing market and will surely affect future transactions.

In fact, the Realtors association notified its 9,000 plus members about a "red alert" regarding the leak. The recently included addendum to the association's disclosure guidelines about local facilities stated: "Seller and real estate brokers and their agents do not have the expertise to advise buyer on any impact oil wells (or the leak) may have on the subject property. Buyer is advised to investigate this matter during buyer's investigation contingency period."

The CEO of the association, Jim Link, is worried about the issue. He said the agents should have buyers read and sign the addendum.

The director at the San Fernando Valley Economic Research Center at Cal State Northridge, William W. Roberts, also expressed concern about the problem. According to him, "It's going to depress home values for a while. And if it happened once, it will it happen again and is it safe up there."

"It's going to make it really hard to sell (homes)," Roberts added.