In the wake of the recent wildfires in Los Angeles, Redfin examined the state of home sales, reporting that they fell by double digits in the Pacific Palisades and Altadena regions in the wake of January’s wildfires.
In the Palisades (90272) region, just 12 homes sold in February, down 56% from a year earlier, and in the Altadena (91001) region, just 32 homes sold, down 43% year-over-year.
Home listings fell in neighborhoods hit by the wildfires, too. Listings slowed a bit in February—but not nearly as much as sales. There were 23 new listings in the Palisades, down 12% year-over-year, and 46 new listings in Altadena, down 6%.
Sale prices did differ in the disaster-stricken regions, as prices dropped in Altadena, yet rose in the Palisades region, with the typical Altadena home selling for $1.2 million in February, down 8% year-over-year. But in the Palisades region, one of the most expensive neighborhoods in Los Angeles, homes grew even more expensive, with the typical home there selling for approximately $2.9 million, up 32% year-over-year.
Realtor.com reports that real estate losses from the wildfires that scorched Southern California in January could amount to more than $30 billion, affecting properties from condos to multimillion-dollar mansions and everything in between. According to Cal Fire, the January wildfires ravaged 16,249 structures in Los Angeles County, including approximately 11,500 homes.
Housing Supply Depleted
It stands to reason that both home sales and listings dropped, as the Palisades and Eaton wildfires destroyed thousands of homes, while many homes simply no longer exist. Many who were displaced by the fires moved into rentals temporarily rather than buying a new home, and many who didn’t lose their homes halted their hunt as the wildfires wreaked havoc across the region.
Redfin agents say would-be homebuyers and sellers in the Palisades and Altadena have adopted a “wait-and-see” approach. Many homeowners kept their homes off the market because they were worried values would diminish, and some house hunters canceled contracts because they were nervous about insurance costs and potential future fires.
Now that a few months have passed since the wildfires, Redfin agents report that some house hunters who were looking in the Palisades or Altadena before the wildfires are looking in those neighborhoods once again—but away from particularly vulnerable streets.
“I’m now working with a mix of people. Some of them were looking before the fires, and some started looking after,” said Sam Najarian, a Redfin Premier Agent who works primarily in Altadena and Pasadena. “Most people want to stay away from the hillsides post-wildfires; they’re looking in flat residential communities. Of course they know living in the hillsides puts them at higher risk of wildfires, but insurance companies are also making it very tough to buy in the hills; many of them are asking for inspections, which I’ve never seen before, and giving astronomical quotes.”
What Regional Markets Are Gaining Momentum?
While homebuyers and sellers shied away from the Palisades and Altadena regions the month after the wildfires, activity picked up in the Los Angeles metro as a whole. Home sales rose 6.2% year-over-year in Los Angeles in February, a bigger increase than any other major metro area, and new listings rose 13.6%. The area’s median sale price increased 5.1% to $920,000, just shy of the all-time high.
Experts report the Los Angeles market is accelerating mostly due to pent-up demand, with many prospective buyers and sellers having backed off in January, yet returned to the market in February. Los Angeles agents say there are pockets of the metro area, especially places considered relatively safe from fires, where every listing is selling quickly with multiple offers.
In Palisades-adjacent zip code 90049 (Brentwood, California), home sales rose 23% year-over-year in February, and new listings rose a dramatic 81%. In the 91011 zip code (La Canada Flintridge, California), located next to Altadena, new listings increased 34%, and in 91104 (Pasadena), also next to Altadena, new listings rose 63%.
Sales and listings also soared in parts of Los Angeles farther from the fires. In 90266 (Manhattan Beach), located in the southern part of Los Angeles County, home sales rose 58% year-over-year in February, new listings rose 72%, and prices increased 19%.
“One thing I’m noticing: people I met with six months or a year ago are suddenly calling, saying they want to list their homes,” said Thomas Royds, a Los Angeles Redfin Premier Agent who focuses on places in southern Los Angeles. “Many of them want to capitalize on the demand and high prices from people who were displaced by the fires, and are now moving from a short-term rental into a more permanent home.”
Click here for more on Redfin’s analysis of home sales after the Los Angeles wildfires.
