On January 16, 1995, an avalanche fell on the village early in the morning (around 6:25 am) and destroyed several buildings, most of them residents' houses.

The final survivor was rescued 23 hours after the avalanche had fallen, and the search continued into the evening of January 17.

[2] The same winter, two more avalanches fell from Traðargil [ˈtʰraːðarˌcɪːl̥], destroying several houses; the areas hit had already been evacuated, so no more people died.

The existing properties within the danger zone were sold to the Icelandic government, and construction work on the new village began on August 23.

The industries in the area were relocated along with the residents, with the exception of the freezing plant, which continues to operate in a similar manner as it did prior to the avalanche.