L.A. Wildfires: Where Does the Housing Market Go From Here? MABA MassachusettsRealEstate FirstTimeHomeBuyers MaBuyerAgent

 A recent study by Realtor.com took a closer look at the immediate and long-term impact that the wildfires in the Palisades and Eaton regions of Los Angeles County will have on the area’s housing market. Into their second week, the fires continue to burn, fueled by lingering drought-like conditions and ongoing windy conditions. All the while, communities in the Los Angeles County region are faced with the decision to either stay and rebuild or pick up the pieces and relocate elsewhere.

• The fifteen thousand eight hundred and forty one residential properties within the designated fire boundaries had a total value of forty point three billion dollars. This estimate includes single-family homes, town homes, condominiums, and cooperatives.
• The sizable total value of residences impacted by the fires stems from both the high number and the relatively high median value. The median home within the boundaries of the Eaton fire has an estimated one point three million dollars value while the typical home in the Palisades fire boundary has an estimated value of three million dollars.
• For comparison, the total value of residential real estate in Los Angeles County is two trillion dollars, and the median value of the one point seven million properties in Los Angeles County is somewhat lower (eight hundred and seventy thousand five hundred dollars).
• The residences within the fire boundaries comprise point nine percent of Los Angeles County residential properties by number and account for two point percent of the total value of properties in Los Angeles County.
• So far in 2025, about one hundred homes have been listed for sale within the Eaton and Palisades fire boundaries. LA county as a whole has seen eight thousand four hundred and twenty six active listings year-to-date, meaning these at-risk properties made up about one point three percent of active for-sale home listings so far this year.
• Rents have been stable to modestly down in the Los Angeles metro area in recent years as the rental vacancy rate has risen to a ten year high. This will likely help the market better accommodate displaced households, but rental price increases are still expected.
• The typical property in the boundaries of the Palisades fire was worth three million dollars, and the median value of a home in the Eaton region was one point three million dollars. The Los Angeles County median home value currently stands at approximately eight hundred and seventy thousand five hundred dollars.

 The number of homes listed for sale in the impacted areas fell from 94 homes in the first week of the year (pre-fire), to fifty two homes last week, as sellers either pulled listings off the market, or potential listings never hit the market. In this same period of time, the broader Los Angeles market saw the count of active listings rise from six thousand and eighty nine to six thousand seven hundred and forty three, an increase that is seasonally typical.

 Realtor.com forecast that the Los Angeles area will likely see an uptick in local market home search activity, as displaced families hoping to remain local while assessing the damage to their property and as they begin the rebuilding process. This upward push in demand will impact the price of rentals in the area and drive them higher in the short-term.

 According to Gregory Eubanks, a Redfin Premier Agent, this inventory shortage of rentals is creating bidding wars for the short supply available: “Tons of past clients are reaching out on behalf of friends, seeing if I know of any available rentals. There’s competition for nearly every rental, and it’s not just on price; a lot of people are taking on long leases to secure a place to live. A rental listed for sixteen thousand dollars per month got bid up to thirty thousand dollars, and the winners took on a two-year lease. On the buying and selling side, people are pulling back, waiting for the dust to settle. Two buyers have canceled deals because they don’t feel comfortable making such a big purchase with the catastrophe going on. Three clients have canceled their listings, with the homeowners opting to rent their homes out to people impacted by the fires instead.”

 Realtor.com found that for-sale listing viewership from outside of LA surged starting on January 8th, as the wildfires began escalating. Prior to January 8th, less than forty percent of listing viewership came from outside the LA metro area. By January 9th, the out-of-metro share of views reached sixty five percent, peaking before falling slowly and reaching pre-fire share by January 18th. Of note, in the last few days, out-of-metro viewer share has continued to fall, suggesting that within-LA viewership is picking up, perhaps as displaced residents look for living options. Though the pick-up in out-of-metro viewership is quite pronounced, the LA metro is very large, so the effect is likely somewhat muted compared to what we would see in the areas immediately adjacent to the areas affected by the wildfires. 

 Rents in the Los Angeles metro area in December were the fourth highest in the country behind New York, Boston, and San Jose. The median asking rent for a zero- to two-bedroom home was $2,750, a decline of two point seven percent compared to the prior year. Asking rents in the Los Angeles metro have been relatively weak in recent years. The last time the metro saw rent growth above one point five percent year-over-year was in 2022, and in the last two months of 2024, rent declines grew somewhat larger.

 And as Heidi Ludwig, a Redfin Premier Agent, noted, some are getting creative in their rental options as many Airbnbs are turning into long-term rentals: “People are getting creative; I’m seeing Airbnbs turn into regular rentals, and second-home owners offer up their empty homes as rentals. I’ve been all over Facebook, asking if anyone knows of open rentals, and then matchmaking with clients.”

Click here for more on Realtor.com’s examination of the Los Angeles housing market in the wake of the area’s wildfires.

The post L.A. Wildfires: Where Does the Housing Market Go From Here? first appeared on The MortgagePoint.

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