Three weeks after the onset of the most destructive wildfires in California history, a new analysis has determined that the blazes wiped out almost $31 billion in property value, including land.
The findings, based on exclusive data from CoStar Group, show that lost value stems from approximately 11,200 residential and commercial properties burned in the fires.
The Palisades fire destroyed more real estate value than any previous wildfire in California’s history, and the Eaton fire ranks second, with both blazes torching an estimated 40,000 acres across Los Angeles.
More than 95% of real estate losses in the LA fires stem from single-family homes, leaving tens of thousands of residents affected, according to the analysis that used CoStar Group's commercial buildings and Homes.com residential properties databases.
The Palisades and Eaton fires have destroyed approximately 11,000 such homes valued at $29.7 billion, according to the analysis. The average value of homes destroyed in the Pacific Palisades exceeds $4 million while homes lost in the Eaton fire average close to $1.4 million.
Rebuilding costs will probably come in slightly higher. This data represents the value of the properties had they been sold before the fire. AccuWeather has estimated total costs from the fires could run as high as $250 billion.
Commercial damage
The destruction of apartment buildings in each fire outweighs damaged retail, office and industrial property. Among apartments, 74 buildings containing 870 units valued at an estimated $390 million were demolished in the Los Angeles fires. Nearly 40 apartment buildings have been destroyed by each fire, but the Palisades contained 70% of the units lost. Destroyed apartments there are concentrated just west of Palisades Village along Sunset Boulevard and Pacific Coast Highway.
The majority of apartment buildings lost were small, containing less than 10 units. Many were built in the 1950s and most were subject to the state’s preexisting rent control measures. Among the largest is Sunset Plaza Apartments, a 75-unit building acquired in 2010 by Santa Monica-based Xenon Investments.
Also destroyed in the combined fires were 26 office buildings totaling 248,000 square feet and valued at an estimated $114 million, two industrial buildings totaling 208,000 square feet with an estimated $60 million value; and 23 other building types, including religious properties, totaling 210,000 square feet. No hotels were destroyed.
Most of the multifamily, office and retail buildings destroyed in the Eaton fire are located on a roughly 1-mile corridor along Lake Avenue between New York Drive and Altadena Triangle Park in LA County.
Retail locations along the corridor generally offered essential goods, services and affordable dining options. A few blocks east, the fire also destroyed office and retail buildings along Fair Oaks Avenue. Among the largest was a 13,200-square-foot Baja Ranch supermarket building.
The total loss of retail space was also nearly even among the two fires, with 186,000 square feet destroyed by the Palisades fire and 161,000 square feet lost in the Eaton fire. In all, the fires destroyed 67 retail buildings valued at an estimated $226 million.
In the Pacific Palisades, most of the area's retail stock is in Palisades Village, a high–end shopping and dining district along Sunset Boulevard surrounding Pacific Palisades Village Green, an area that contains the bulk of the local boutique office and medical office properties. In that area, Gelson's Pacific Palisades and a 20,500-square-foot Ralphs supermarket building were destroyed.
Some of the most destructive fires in California history have burned as many as 12,000 homes, businesses, and other structures across more than 40,000 acres in Los Angeles County, according to USA Today. As residents displaced by the fires seek housing, some are seeing everything from illegal price gouging to a housing shortage frenzy. Here is the Future Outlook of LA
The Rental Market Will Skyrocket
Los Angeles renters are about to face a tough market. It looks like devastating fires are creating demand for properties. Houses that were for rent sitting on the market for six months have suddenly jumped in price because these property owners are taking advantage of the fact that people need places to go, so the rental market is going to explode.
Renters are seeing houses that was asking $13,000 a month. Offering $20,000 a month, and when offering to pay six months upfront. And the landlords have increased the Asking price to $23,000 per month.
The price-gouging laws in California that are just being ignored right now, and this isn’t the time to be taking advantage of situations. And it’s also illegal to take advantage of a natural disaster.
According to the State of California Department of Justice, it’s against the law to raise “the price of many consumer goods and services by more than 10 percent after an emergency has been declared.” That applies to pre-disaster market rates for rentals.
Homes in Unaffected Neighborhoods Will Increase in Value
People who don’t want to rebuild the home they lost as it’ll presumably take a few years to do so. “They’re going to buy a house,” he said. When they buy in Beverly Hills or other areas, “those homes are going to go up in value.
High-End Condos Will Be in Demand
Many predicts older buyers will prefer to buy high-end condos rather than putting their time and energy into rebuilding their homes.
There Will Be a Housing Shortage
There was not a lot of inventory in LA before the Fires,, And now all of a sudden there are a thousand-plus new people in the market, whether they are buying or renting there is expected to be a shortage of housing, especially short-term leases and rentals. There’s going to be a tremendous amount of people out there looking for homes. There is a frenzy. There’s multiple applications for the same homes right now.
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