How Liquefaction and Earthquake Risk Affects Home Prices in Mission Dolores
Jul 20, 2022
Since becoming a realtor, I have continuously advised clients to avoid buying homes in heavy liquefaction zones in San Francisco. Explaining the effects and problems of liquefaction could be done simply in relation to unstable soil and frequent California earthquakes. However, when making the decision to invest in a home, it is always better to have more information than less. Thus, it is necessary to delve deeper into my reasons for warding clients away from properties that reside on liquefaction. In neighborhoods such as Mission Dolores, a location in which prices might not be impacted but safety could be, this reasoning airs on the side of caution. Feel free to reach out if you need help with home purchases and listings in liquefaction at [firstname.lastname@example.org
What is liquefaction?
Liquefaction relates to the status/composition of the soil and ground on which various counties, cities, and neighborhoods reside. Generally, liquefaction is a natural hazard that is triggered by the occurrence of larger earthquakes. The levels of liquefaction range in intensity. In a particular area, liquefaction levels can be very low, low, moderate, high, or very high. As liquefaction levels rise on the scale, the ground/soil becomes increasingly susceptible to falling or sinking in the face of a high-intensity earthquake.
Why does Liquefaction exist?
At the end of the industrial boom, the San Francisco coastline was populated by many bay, marsh, and creek areas that made structural development near-impossible. In the mid-1800s, the United State Federal Government adopted the Arkansas Swamp Lands Act of 1850. The Swamp Lands Act legalized the State of Arkansas and other states reclaiming swamp and overflow lands. This reclamation would include claiming a title of the lands.
According to the California State Lands Commission
, beginning in 1855,
California received over two million acres of swamp and overflowed lands, which was loosely defined as lands that required drainage or levees in order to be cultivated.
Following the receipt of these lands, the State of California used foreign fill to expand the San Francisco coastline for building and development, and to fill marsh and creek areas around the Bay. This artificial/foreign fill was created using rock, rubble, soil, or even mud pumped from the bottom of the Bay and left to dry. These lands, due to their man-made nature, are highly susceptible to shifting and sinking.
How much of Mission Dolores is affected by Liquefaction?
The level of liquefaction in a particular area varies from region to region.
As shown above, about 50% of Mission Dolores is located in very high liquefaction while the rest is in very low liquefaction.
To determine whether liquefaction affects pricing, we took a data-driven approach by observing condos and single-family home sales from the start of 2015.
Out of the 433 homes, we found the following:
3.8% of single-family homes are in very high liquefaction
3.3% of single-family homes are not affected by liquefaction
Over 93% of Mission Dolores’ inventory is condominiums
Given the larger sample size of condos, we narrowed down the scope for sales accuracy.
Of the 403 condos, we found that:
How does Liquefaction Affect Home Prices in Mission Dolores?
Based on our findings, we have found that there is no difference between price and liquefaction as shown in the price charts below.
However, in 2022, we observed the largest price difference between liquefaction areas in the past 8 years. This can be partially due to the smaller sample size as we are only halfway through 2022.
We can attribute the price difference to the following reasons:
Most of the sales in low liquefaction are condo units that are in high unit count buildings (100+ units). These buildings tend to have more restrictions and rules, higher HOA dues, smaller sqft footprint, and less privacy. These features lower prices.
The condo units sold in high liquefaction are primarily classic Victorian or Edwardian 2–4 unit buildings. These buildings typically have higher ceilings, lower HOA dues, fewer neighbors, less rental restrictions, and more freedom overall. Buyers value these attributes.
When observing condo units by bedroom count, the conclusion remains the same that there is no price difference between pricing and liquefaction.
In Mission Dolores, families are looking to buy in the area due to the nearby amenities, walkability, and commutability. While liquefaction can be conflated with other factors that affect pricing, it is evident that the appeal of the neighborhood versus liquefaction had no effect on condo prices.
In general, if possible, homes that sit in very high liquefaction areas require a necessary amount of caution and consideration, as the danger of being in a liquefaction zone in an earthquake-frequent state such as California is not one to be overlooked.
To Prospective Buyers
The final decision for whether a home is the right one for you will always come down to you. If liquefaction matters a great deal to you as a buyer, then Atlasa will diligently find properties to fit your desire. On the flip side, if you want a home and are not bothered by its presence in a liquefaction zone, Atlasa will aid you in the purchasing process in equal capacity. What matters most is that as a buyer you are thoroughly informed so as to make the best possible decision.
If you are looking to buy a home, please feel free to contact me at email@example.com
To Prospective Sellers
More than anything, it is important to remember that you have many options and opportunities to sell your home, even if it is in a moderate to very high liquefaction zone.
If you would like to explore your options, please reach out to Atlasa Real Estate at firstname.lastname@example.org
so we can get the conversation started.