Mountain Resorts Fear the Beetle’s Bite

It was shortly after Susan Helmle paid $600,000 for her dream home in Lake Arrowhead that she noticed one of the pine trees in her driveway was a little yellow. “I didn’t think anything of it at the time,” she said.

But in the last 18 months, Helmle has spent $20,000 to cut down that tree and almost 30 others like it because of a hungry pest -- the Western bark beetle -- that has devoured the mighty pines around her house.

“I had some of the oldest trees on the mountain,” said the 54-year-old Helmle, a stained-glass window artist who lives in the hardest-hit spot, the north shore of Lake Arrowhead, where about 80% of the trees are dead. “That’s what I moved up here for, the trees.”

Her lament is shared by hundreds of property owners who are grappling with the devastation caused by the beetle and a prolonged drought throughout the Lake Arrowhead and Big Bear area. The damage is not only aesthetic but also economic. These communities have enjoyed booming real estate sales and prices in recent years, as many people in the Southland flocked to the San Bernardino Mountains to buy vacation homes and investment property.

But now homeowners and brokers fear that the same little beetle felling mighty trees may also infect the resort area’s economy, particularly the real estate market. The beetle infestation has been spreading in recent months, and this week authorities were planning to order homeowners to start removing dead trees from their lots.

Residents say that relatively few houses have beetle-infested pine trees in their yards and that the homes themselves are not in direct danger from the pest. But as the beetle lays waste to huge tracts of forest, more trees are turning into towering spikes of kindling just waiting to catch fire or topple on homes and power lines.

Because of such concerns, some smaller insurers have stopped offering new homeowner policies in the area, and other insurance firms are taking a hard look at the risks, said Rita Price, a Lake Arrowhead agent for Farmer’s Insurance, which still is covering homes there.

“In my 26 years here, I’ve never seen it so bad,” she said.

Although some analysts say they don’t expect a long-term effect on the real estate market, others aren’t so sure.

“We’ve seen at least one deal fall apart” in the last week, said Bruce Block, manager of Coldwell Banker Sky Ridge in Lake Arrowhead. Some clients, he said, are worried that proposed construction of a local lumber mill to handle all the fallen trees would disturb the area’s quiet resort setting.

“The idea of a sawmill makes some people nervous,” Block said.

Robert Kleinhenz, senior economist with the California Assn. of Realtors, said that when a natural disaster such as a fire, flood or earthquake hits, home values in that area rarely are hurt much because the economic damage is often softened by insurance payouts.

But with something such as the bark beetle, he said, it’s unclear how long the problem will last and what the final outcome will be.

The effects on property values could play out differently, with a possible diversion of business from Lake Arrowhead and Big Bear to other resort areas.

“It’s going to be hard. I would not be surprised to see a temporary setback to what is going on in the housing market there,” Kleinhenz said.

At the same time, he said, the mountain communities’ economy and real estate market will continue to benefit from their proximity to Los Angeles, as they have in recent years.

Since 1997, residential property values in the Big Bear and Lake Arrowhead area have soared 52.6%, from a median price of $95,000 to $145,000 last year, as many stock market-weary investors in the Southland sought to take advantage of low interest rates and use nest eggs to buy second homes in the nearby mountains.

Indeed, more than 60% of the 41,775 houses in these communities are second homes, according to DataQuick Information Services, a San Diego research firm.

DataQuick said last year marked the strongest home sales ever in the Crestline, Lake Arrowhead, Big Bear and Running Springs area: Sales jumped 17% from 2001 to 4,012.

John Karevoll, an analyst with DataQuick who lives in Running Springs, doesn’t see much of an effect from the beetle problem. Given the building boom there, he said, most residents are more concerned with how to get a busy contractor to return phone calls than they are about whether the bark beetle will hurt home values.

“There are so many people who want to buy here right now,” Karevoll said.

Some real estate agents have tried to paint a positive picture of the situation, pointing out that new views for homeowners have opened up where swaths of trees were felled.

“You hear people say now, ‘I’m getting a lake view, I’m getting a ridge view. My house is a whole lot brighter,’ ” said Bob “Guru Bob” Bailey, a real estate agent in Lake Arrowhead for 14 years.

Bailey also thinks that once spring comes, the area’s brown patches will turn green again as oak trees, unaffected by the beetle, grow new leaves. There still are a large number of cedar trees also untouched by the beetle, he said.

Still, homeowners are concerned -- and not just about a possible financial loss.

Costa Mesa accountant Mary Leer, 51, inherited a two-bedroom log cabin near Big Bear that was built in 1914 by her grandparents. Five generations of her family have used the rustic cabin, and Leer wants future generations to be able to enjoy it.

That’s why Leer worries most about a fire sweeping through the dry, beetle-damaged pine trees. “Fires terrify me, and I’ve never seen it so dry there,” she said.

Her sister, Betsey Helie, who owns a nearby cabin, said: “I’m not worried about my property value. I’m worried about my property, period.”

Helie, a 59-year-old elementary school teacher in Newport Beach, said her cabin is worth about $80,000 and sleeps 12.

“We’re in a horrible pickle because of this beetle,” she said.