Would you buy a home in East Palestine? Perception has hurt the real estate market

• Realtors say the Norfolk Southern train derailment has put a stigma on the East Palestine housing market.
• A couple trying to sell their East Palestine house are struggling to find buyers after Feb. 3 derailment.
• It might be too early to determine how much of an impact the derailment will have on property values.

EAST PALESTINE – Ronnie Johnston and his girlfriend Christina Henry have been trying to sell their house on Park Avenue since moving into a new place in November.

There was an initial flurry of interest but that abruptly ended after a Norfolk Southern train carrying hazardous chemicals derailed Feb. 3 in a fiery wreck and those toxic chemicals were released into the waterways and air a few miles away. Two showings were canceled.

"We're just disgusted and worried," Johnston, 47, a contractor, said while standing inside the kitchen of their former home. "Now the market has crashed and everyone and their brother are trying to put their house up for sale."

"All because of that accident," their Realtor Dennis Gonatas said.

Court:New East Palestine derailment lawsuit targets EPA, DeWine over water, air concerns

Despite federal officials saying they hope the East Palestine train derailment doesn't create a stigma on the town, property owners, especially those who are trying to sell, are facing an uncertain future. The reality is that people — at least right now — don't want to buy in the village, a community of about 4,700 residents along the Ohio-Pennsylvania border.

It's unclear when that will change, as many people remain skeptical about health and safety after vinyl chloride, butyl acrylate, ethylhexyl acrylate, ethylene glycol monobutyl ether and isobutylene were released into the environment. The Ohio Department of Natural Resources has estimated that 38,222 minnows and around 5,550 other aquatic species, such as other fish, crayfish and amphibians, were killed during the derailment.

Home sales in East Palestine will likely suffer for a while, "until remediation is successful," said Michael Stevens, board president for the Youngstown Columbiana Association of Realtors. He said homebuyers want a certain amount of confidence when purchasing a property and the uncertainty surrounding the accident has left them scared.

Eighteen houses were for sale in East Palestine at one point last month.

At least two federal lawsuits filed over the derailment have raised concerns about the impact on the market value of properties. At least 17 lawsuits have been filed. At least one attorney familiar with train derailments said it could years for the East Palestine market to rebound.

The stigma of Ohio train derailment might be unavoidable

U.S. Environmental Protection Agency Administrator Michael Regan, while visiting East Palestine, told reporters on Tuesday that government officials were working with the railroad company to clean up the crash site quickly.

The agency also opened an office in the village where people can sign up for air monitoring and cleaning services at their homes or businesses. They can also ask questions regarding the cleanup effort.

Lawsuits:All of the legal action filed in the East Palestine train derailment ... so far

"We want to go that extra mile so that people feel comfortable living in their community," Regan said. "We don't want a black eye on this community."

But Gonatas and other Realtors said the stigma might be unavoidable — for now.

"It's up to a person's perception," he said.

Ronnie Johnston: 'We're just disgusted and worried.'

That has sellers scared.

Johnston and Henry, 47, said their greatest fear is that they won't be able to sell the house now and they will be foreclosed on. Their finances allowed them to pay two mortgages for only a short time, about six months.

The couple now live in a farmhouse on four acres a few miles north of East Palestine. They put their old house on the market in December at $175,000 after remodeling it.

The single-family home has two beds, one bathroom, a privacy fence, a jacuzzi and an outlot in the back on 0.38 acres. It also has an adjacent two-car garage.

Johnston said he spent nearly tens of thousands of dollars getting the house ready for sale, and Henry said interest in the property gained steam after the holidays. They had at least 10 interested buyers.

Now it's all crickets.

The couple recently dropped the listing price to $150,000 after showings were canceled — the third time, they cut the price. The first two reductions were not related to the derailment.

Johnston blamed Norfolk Southern for the impact, although he added: "I have a railroad family. (My dad) is retired from Norfolk Southern. My mom works for Amtrak. We love the railroad. It's a bummer."

The couple hopes to unload the house before the situation ruins their credit.

It will impact East Palestine housing market for years

Calvin Fayard Jr., a Baton Rouge area attorney, said it took almost five years for the Livingston, Louisiana, housing market to recover from a 1982 train derailment. The train also was carrying hazardous materials when it crashed and leaked chemicals into the area.

Fayard represented a class-action lawsuit against Illinois Central Gulf Railroad over the wreck. His firm, Fayard & Honeycutt, now is involved in one of the East Palestine lawsuits.

He said all real estate activity — commercial and residential — abruptly stopped after the Livingston derailment. It took three to four years for the impacted area to be fully cleaned and two years for all litigation to be settled. The area was monitored for another 25 years.

"However, after the site was cleaned up and things returned to normal, or as close to normal as they could be, real estate transactions failed to reflect any serious problem with property values," according to a 1985 court document, Fayard shared, regarding the Livingston train derailment.

Unfortunately, the situation in East Palestine is in its infancy.

"At the present time, I can't imagine them selling any homes at all," Fayard said, unless real estate speculators are involved. "In every catastrophic event, hurricanes and pollution incidents, it's not uncommon for opportunists to a make a play."

Too early for East Palestine home property value losses

Stevens, the real estate board president, said the long-term impact on the housing market and property values is uncertain.

Nancy Milliken, auditor of Columbiana County, said property valuations are not done annually and taxes are based on the previous assessment. The next assessment is in 2025.

"If these homes would be destroyed in 2023, then they can a file complaint in 2024," she said, adding property values would not go down immediately.

Reach Benjamin Duer at 330-580-8567 or ben.duer@cantonrep.com.

Follow on Twitter @bduerREP