While the incredibly destructive Los Angeles fires have finally been brought under control, assessing the damage and figuring out what’s next for the many thousands of people who lost their homes is underway.
CoStar Group’s online residential platform Homes.com has compiled data on the impact of the LA fires on the Pacific Palisades and Altadena neighborhoods that erupted in early January. The data quantifies the number of homes destroyed as well as the financial impact of the fires broken down by area. Some key takeaways from the report include:
- The Eaton fire destroyed approximately 5,560 homes located in seven Homes.com neighborhoods, with an estimated value of $7.8 billion
- The Palisades fire destroyed approximately 5,480 homes located in 11 Homes.com neighborhoods, with an estimated value of $22 billion
- Combined, the two January 2025 LA fires destroyed approximately 11,000 homes located in 18 Homes.com neighborhoods, with an estimated value of $29.9 billion
Jesse Gundersheim is a senior director of market analytics covering Orange County and the Inland Empire in California CoStar Group. He told RISMedia about various aspects of what’s happening there now and going forward.
“For context, this would be the most value destroyed in any fire in California’s history,” he says. “The value of each home itself was just so high, at nearly $1.4 million, and in the Palisades the average home that was destroyed was in excess of $4 million in value. That includes the land value and the structure that burned.”
Also a commercial real estate specialist, Gundersheim noted that Homes.com has seen a push to raise rents in the aftermath of the fires, with some increases over 10%, which is “potentially illegal.” He added that homes not previously listed for rent or sale are now coming on the market at higher rates.
“Pasadena apartment availability has been cut in half since the fires hit,” he says. “And we see that apartment availability has shot down. Virtually all two bedrooms and three bedrooms in Santa Monica and Beverly Hills and nearby are taken. The availability of homes for rent is declining as well.”
As for the future, he predicted that:
- The fires are expected to have a long-term impact, with an estimated 75% of Palisades residents potentially not returning.
- This will put significant demand on the remaining housing stock, including apartment rentals, as people look to relocate nearby or move further away.
- There is uncertainty around whether people will choose to rebuild or try to move out of the area entirely.
“People are still trying to decide for themselves if they’re going to rebuild, what’s going to be entailed with that,” says Gundersheim. “Or are they going to try to just cut their losses and move out of town and try to restart somewhere else? Obviously it’s going to put a lot of demand on the apartment stock. I think people are trying to stick nearby as much as they can, but also, people have been forced out of the area. I’ve heard from cities across the country that are experiencing at least some people moving there who were displaced from the fires.”
Gundersheim noted that local homeowners not affected by the fires and who had not had their homes listed for sale would be able to list them now at inflated prices.
“They’re able to come out at a market rate,” he says. “If it wasn’t listed before, there’s no illegality as far as I know.”
