When the ministry of truth crashed into vivec, creating a wave that caused the red mountain to erupt, the surrounding cities like balmora are goners.
Now in 4E201, i presumed that people are going back to vardenfall and start rebuilding? Are there any evidences supporting it, or will vardenfall be ignored forever?

I wonder if there really are restoration efforts going on in Vvardenfell, or if it's too dangerous to attempt that?

There is evidence in Dragonborn, apparently.
Vivec City is being rebuild. Balmora was even rebuilt shortly after the Red Year.

I'm presuming that Vivec City got turned into a crater that subsequently flooded. Lie Rock resumed with its previous velocity before impact, and probably killed everybody in Vivec without any warning.

yay, i do hope they rebuild vivec to its former glory