Home Prices Hold Steady as Burned Lots Flood the Market, Demand Remains Strong
Eight weeks after the devastating Palisades Fire, the local real estate market is beginning to show signs of recovery despite initial concerns over significant devaluation. While home sales remain stagnant, land values have held firm, defying expectations of a 30-50% drop, according to real estate expert Anthony Marguleas, founder of Amalfi Estates.
Since the fires, only one lot has closed escrow, and no homes, condos, or rental properties have been leased. However, the market has seen an influx of listings, including 18 lease properties, five condos, 22 homes, and 36 land parcels—most of which are fire-damaged lots. Six of these land parcels are currently in escrow.
“We are seeing two to three new land listings coming on per day,” Marguleas said. “The most surprising aspect is the market’s resilience.”
Market Trends and Buyer Demand
Despite the fire’s widespread destruction, demand for properties in Pacific Palisades remains high. Marguleas estimates there are 10 buyers for every available property, and this trend is expected to continue.
Certain neighborhoods have demonstrated remarkable stability, with the Riviera appreciating by 10-15% and the Huntington maintaining its pre-fire values. One home in the Huntington neighborhood at 611 Ocampo Drive received six to eight offers and entered escrow at $4.25 million—only a 10% decline from its pre-fire valuation of $4.6 to $4.7 million.
“The Huntington continues to be the most in-demand area in the Palisades,” Marguleas noted.
Future Listings and Market Speculation
Marguleas predicts that 10-15% of fire-damaged homes—approximately 600 to 1,000 properties—will eventually hit the market. Despite strong demand, some sellers are setting aggressive prices, with listings reflecting pre-fire or even above-market valuations.
“The other question is how developers expect to profit by buying homes 10-20% below market when their labor costs and materials far exceed this discount,” Marguleas said.
Legislative Measures and Market Stability
In response to concerns about speculative investors taking advantage of fire victims, Gov. Gavin Newsom issued an executive order temporarily prohibiting unsolicited low-ball offers in affected areas, including Pacific Palisades. The order, signed in January, is intended to prevent predatory buying practices while residents assess their losses and begin rebuilding efforts.
The rebuilding process is expected to take five to seven years, based on data from previous California wildfires, such as the Woolsey and Paradise fires.
Marguleas advises homeowners against selling too soon, citing historical trends that show property values rebounding over time. “Every month you wait, your property value is going to go back up to normal,” he said.
While Pacific Palisades faces a long road to recovery, the area’s real estate market remains active, with buyers continuing to compete for available properties despite the fire’s aftermath.
