According to the LA Times, more than 9,000 homes have been lost to fire so far.

My uninformed guess is that number will be 2-3x larger as the fires rage on, and with people displaced from either smoke damage or toxic ash, or because infrastructure has been destroyed (gas lines, power lines, etc.). That’s potentially up to 20/30,000 homes lost…

 

Now, that’s a tiny fraction of the 3.7 million homes in LA County, but it’s an astounding number of displaced households. To put it in perspective, consider this: last year, in Los Angeles, the number of homes that traded hands was 13,000 total.

So, thousands of home buyers and renters will be unleashed into the country's most supply-constrained market, which already saw the lowest number of home sales ever in 2024.

 

Yep, this will affect housing prices.

 

The most similar local natural disaster is the 1994 Northridge earthquake. Those of a certain age might remember the immediate descent of property values in the aftermath.

 

Here’s an LA Times article from 1995: “The road to recovery 18 months out: Northridge Quake Is Still Causing Pain: Real Estate: Foreclosures in Valley are up 19% this year. And prices continue a downward spiral.”

 

That’s not happening this time, for a few reasons.

 

First, the scope of devastation. The ‘94 quake caused about double the damage, destroying 40,000 structures and costing approximately $40 billion.

 

More importantly, the housing shortage that exists now did not exist then, and it trumps everything. There were plenty of homes in 1994 and prices were flat. 

 

It's possible that the real estate sales market will stagnate. Like COVID-19 and 9/11, uncertainty has entered people’s lives, and people typically react by pausing their plans. So, the spring home-selling season might be a bit more muted than expected.

 

But my guess is that while some buyers will put their searches on hold, and a few will move out of LA altogether, what's most likely is that bidding wars will continue not only on single-family home purchases, but also on rentals, as displaced homeowners join the existing buyer pool to compete for the limited housing inventory. 

 

Not to mention the new infusion of cash that's entered the market…in about 3 months, people will be shopping with insurance money.

 

 

The big question here is insurance—what areas will be insurable? How will the California government react? And how will that affect housing prices? TBD.

 

But one thing’s for sure: your insurance premiums are going up.

As JPMorgan recently (and grossly) admitted, from an insurer’s standpoint, “high losses bode well for future prices.” Existing homeowners and shoppers: brace yourself for at least a year of insurance cancellations, increases, and inflated policies.

 

 

Like getting your car totaled and receiving more than its worth as “replacement value,” some owners will end up with cash in their pockets and a valuable (and paid-off) piece of land. 

 

There’s a reason why a common form of insurance fraud is burning down your own building, but it depends on your coverage. Suddenly, everyone is reading their home insurance policy (email your sales rep for a copy asap).

 

The vast majority of homeowners will walk away with enough money to buy a house but not to build one. 

 

Significantly, few owners will rebuild—maybe in the Palisades, but not in Altadena. It’s just too time-consuming and too expensive. Remember, banks will lend you money to buy houses but not build them. Building is best left to professionals anyway.

The market will see a ton of flat, buildable lots become available, and unfortunately, given the economics, they will likely be filled with $3 million, 5-bedroom modern barns (queue architectural historians and preservationists - please mobilize!).

Altadena is in unincorporated LA County (it’s not a city, and they like it that way), so there’s no design review. Hopefully, that might change, given the circumstances. 

 

 

Home building is one of the most regulated businesses in the country. The LA Department of Building and Safety inspects and approves plans, sometimes taking years to approve them. They’re not the only department that moves glacially. If you want an earful, ask a builder how long it takes to get a gas meter from SoCal Gas.

So, how long does it take to build a house? Five years. That’s the average time it takes to build in LA.

And the Palisades is under the authority of the Coastal Commission, the most powerful unelected body in the country, which controls all construction near the ocean. The Coastal Commission is why our coast isn’t lined with highrises or view homes all the way to Oregon.

 

So, everyone is about to get a crash course in government bureaucracy. Hopefully, this disaster will push for much-needed reform to help the entire housing/construction market in Southern California.

 

 

Never bet against Los Angeles. A town that is filled with exceptional humans, gorgeous architecture, food, artists, innovation and grit…we will get through this together.

🔑 12128 Viewcrest Rd, Studio City - Fully-furnished Studio City home designed by Rob Diaz - Listed at $4,195,000 - Open Sunday 1-4pm

🔑 2403 Lanterman Ter, Silver Lake - Stunningly remodeled Silver Lake with breathtaking views in a prime location - Listed at $3,295,000 - Unrepresented Buyers: to schedule a tour, please reach out to us directly

🔑 2111 N Beachwood Dr, Beachwood Canyon - Hidden Craftsman compound featuring a vacant bungalow and a charming triplex - Listed at $2,695,000 - Unrepresented Buyers: to schedule a tour, please reach out to us directly

🔑 1032 W Edgeware Rd, Angelino Heights HPOZ  - Stick-Style Victorian in Bunker Hill - Listed at $2,750,000 - Open Sunday 1-4pm

🔑 1548 Silverwood Ter, Silver Lake - Stylish Mid-century modern - Listed at $2,450,000 - Open Saturday & Sunday 2-5pm

       -Brock

 

🔥🏡 If You Lost Your Home or Business to Wildfires, Here's What to Do Next. 

📃🔥 California Insurance Commissioner Issues 1-year Moratorium on Cancellation of Policies.

🏘 🚪  Need Temporary Housing? Airbnb Has Partnered with LA211 to Offer Temporary Housing to Persons Impacted by LA Wildfires.

 

Have You Or Your Loved Ones Been Displaced By The Fire?

 

We have been hard at work compiling resources for victims.

 

Fill out this form to be connected with an agent on our team who can assist you in finding housing.

 

Hundreds of local agents have collaborated to create a master list of short-term furnished rentals, HERE. This link is being updated regularly, so continue checking in.

 

We are collecting a list of all companies and individuals donating furniture, design services, moving services or home furnishings to fire victims, soon to be published on Instagram. If you would like to donate your time or furnishings, please fill out this Google Form.

 

The Gorgeous Homes We're Selling…

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