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Mon September 17, 2012
Housing

Bark Beetle Causing ‘Viewshed Contamination’

After weathering the worst of the housing bubble burst, Colorado’s housing market is on the mend. But in pockets of the state there’s an entirely different problem that’s been afflicting individual homeowners and home values.

Damage from the mountain pine beetle has taken its toll on the housing market.

When Randy Schmuck picked the location of his home, on a small plateau outside Granby, he says it was the forest that drew him there. The backyard was thick with lodgepole pines.

“You was all alone up here. You couldn’t see any of this. You had these big huge trees, like what’s laying down here now,” Schmuck says.

Then the tiny mountain pine beetle decided to take up residence on his property.  Within a few years the entire forest was gone. More than 1,000 trees have been taken down on Schmuck’s property. He says the first tree died in 2004. And it hasn’t stopped since.

“I mean how do you get rid of them? There’s only one way, cut them down and get them outta here,” Schmuck says.

Sounds of the nearby highway now spill into his open windows. A formerly invisible trailer park is now in full view from his back deck. And high winds whip across his patio. All of this is annoying, but Schmuck says the biggest hit has been to his property value already suffering from the housing crisis. A backyard that looks like a logging site has made things worse.

It’s the same story 70 miles away in Summit County. Sam Kirk is the property manager for a neighborhood of 18 homes outside Silverthorne. While driving through the neighborhood, he looks over a barren stretch of land.

“We used to go through there and get lost it was so thick. Not anymore,” Kirk says.

Beetles took roost in Kirk’s neighborhood in 2003 and made quick work of old-growth pine that surrounded these modest sized homes. Homeowner’s association meetings quickly turned to how to control the tiny beetle. Kirk says once the cutting began the worry turned to home values.

“We bought here and built here because we were in Mother Nature. And I remember vividly one person saying, ‘But you can’t take those trees down, that’s why we bought,’” Kirk says.

All tolled, the homeowners ended up spending more than $170,000 spraying for the bug and then removing the dead and infested trees. They’ve been at it for almost ten years now and the neighborhood is filled with piles of dead pine and meadows peppered with rotting tree stumps.

This area is considered ground zero for the mountain pine beetle epidemic in Colorado. And the devastation caused by the bug has piqued the interest of economists.

“It’s just incredible, I had no idea how many trees are dead. I mean you look at any broad-sweeping view you’ll see the brown trees in there, or red,” says Klaus Moeltner, an environmental economist at Virginia Tech. “So we figured that has got to have some effect on these homes.”

Moeltner’s part of a research team trying to pin down the amount of damage the mountain pine beetle has had on home prices throughout the epidemic. He says the pine beetle epidemic occurred on such a scale, it had to show up in home values.

“Much like somebody tells you you’re going to have a superfund site within ten miles starting in three years, we’re going to dumping some toxic waste there, your home value is probably going to react right?” Moeltner says.

His team is combing through more than a decade of home sales in all of Colorado’s counties. They find homes close to beetle-kill that have been resold within the ten year span, control for the housing bubble burst, and tease out the real effect the dead trees have had on values. They started with Larimer County and the forests near Fort Collins.

The study’s in its initial stages, but preliminary numbers show around a five percent decline. That’s roughly a 3 and a half million dollar impact to home values in Larimer County alone. Moeltner will soon start looking at other counties, and examining the effect of what’s now called viewshed contamination.  It is when you look out your front window and see a forest of dead trees.

The news might not be as bad as it sounds, says Jason Adams, a real estate broker in Frisco.

“Truthfully, if you’ve never been in the neighborhood and you didn’t see it when it was a dense forested neighborhood you wouldn’t know the difference,” Adams says. “In our location in Summit County, you’re here to be close to world-class skiing, the lake. None of that’s changed.”

Adams says what he’s seen is a localized crisis. Certain homes in heavily cut areas or in neighborhoods that haven’t been cut at all are going to see their prices drop. In part it’s a psychological shift in mountain resorts decimated by pine beetle. Adams has just changed his sales pitch.

“We’ve seen all these fires on the Front Range, and the truth of the matter is that a lot of these neighborhoods are safer than they were before,” Adams says.

Back in Silverthorne, Sam Kirk’s neighbors are going through a similar psychological shift.

“Just like in the grief process there’s denial, and then the anger, and then the acceptance. We’re pretty much into the acceptance phase now,” Kirk says.

It’s a lot to accept -- the homes are worth less than what they once were and as for the return of the trees, that will be a long time coming.

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