Recovery from wildfires could take years, firm says
Texas acreage blackened by wildfires may see reductions in value of as much as 50-60 percent, and “a full recovery could take years,” Lewis Realty Advisers, a Texas real estate appraisal and consulting firm, says.
Property studded with pine trees can be restored within 10 years, but land with slower growing oaks may not be fully replenished for over 20 years, says Kim Kobriger, the firm’s managing partner.
"The wildfires have destroyed the trees and the intrinsic value of large swaths of Texas landscape," Kobringer said. "Pasture land that supported livestock will bounce back quickly after significant rainfall. But timberland and property used for suburban residences may not recover for a decade."
The full extent of the loss of value to Texas’ lands will not be determined until some of the burned properties are sold to establish current market value, Kobringer said. Unlike residential structures, land is not generally covered by insurance.
With the reduced value of the burned land, smaller banks holding the loans may need to foreclose on the land to maintain capital requirements, Kobringer said.
"Smaller banks may not be able to sustain the loss of the burned land on their books and the landowners may not be given loan extensions," Kobriger said. "Larger institutions are likely to have the flexibility to extend the loans."