BERKELEY — Berkeley firefighters believe a faulty basement water heater caused a towering two-alarm blaze that destroyed a three-story Hills home worth $1.3 million early Tuesday.

The fire, which firefighters are now calling Berkeley’s largest this season, was called in at about 3 a.m.

The fire consumed the wood house at 98 Avenida Drive, destroying an additional $150,000 worth of valuables, in less than 30 minutes, said Deputy Fire Chief David Orth.

Although no one was injured, the red and orange 60-foot-high flames sent neighbors fleeing from their homes in the foggy predawn dark before firefighters arrived on the scene.

“Luckily we weren’t in the middle of summer with a hot windOtherwise we would still be working,” said Berkeley Fire Lieutenant Shane Marbury, as he stood by the structure’s charred skeletal remains on Tuesday afternoon.

Fire officials think the fire began when the water heater’s gas line or thermo coupler failed. The flames then quickly spread to surrounding furniture and through the heating ducts, said Berkeley Assistant Fire Chief Gilbert Dong.

“You know it’s rare that we get that total destruction of the building but it does happen,” said Orth.

“It was the design [of the house] that was rather open, [which allowed] for easy flow through the building,” Orth added.

Dan Davis, the only occupant of the house, woke to the fire and escaped before the roof collapsed, said Orth.

The home belonged to Davis’s parents, who live in Orinda, Orth said. Davis, who Orth estimated is in his 30s, was doing remodeling on the house.

Neighbors, rousted by the sounds of crackling wood, the smell of smoke, and cries of “fire,” had already called the fire department.

Five engines, two trucks, and two ambulances were dispatched to what the officers termed the “second alarm” fire in which emergency workers from two separate fire houses answered the call.

The first firefighters arrived on scene at 3:35 a.m., five minutes after the first call, said Dong.

“Embers were flying as big as my fist,” said Tim Weitzel, who lives a few houses away from the fire site.

When he woke, Weitzel’s first thought was to get his wife and four-month-old son out of the house. His second thought was to save the house.

After getting his family to safety, Weitzel began hosing down the roof to keep it wet.

“I saw my neighbors doing that and I thought it was a pretty smart idea,” said Weitzel.

Further up the hill, and right behind the fire, Ken Kagawa was also trying to water down his girlfriend’s porch.

The fire, however, had spread to the surrounding redwood trees and had begun to scorch the porch and melt the outdoor hot tub.

“I really thought the whole hill was going to go up because all the trees were on fire,” said Kagawa.

“It was so bright, it was like daylight,” said Cathleen Daly, another neighbor living close to the fire.

“I noticed there was a lot of orange light coming through the window,” Daly said. “I looked through and there was a huge ball of fire.”

Daly fled in her pajamas to a neighbor’s house further uphill.

She was later treated for smoke inhalation.

Despite the fire’s fierceness, firefighters had controlled the blaze by 4 a.m.

“They did an excellent job getting it out,” said Weitzel. “They saved all of our necks, it could have been a disaster.”

The damp windless morning also helped to slow the fire that might have otherwise become an even worse disaster, said Marbury.

“We were lucky in every respect,” Marbury said. “Everything was on our side.”

For Weitzel, the near total disaster for the Hills community served as a “reality check.”

“We [Weitzel and his family] have lived in the hills for three years now and have always heard about how quickly fires can spreadit was pretty scary,” said Weitzel.