The Eaton Canyon Fire is anticipated to significantly impact Los Angeles real estate values in the affected areas. This fire destroyed an estimated 9,000 buildings. How many families have been displaced? The heartbreak is unbelievable. Typically, real estate is all about supply and demand. The community of Altadena has been decimated. Will people move from California?
The fires have increased rental demand in undamaged parts of our community, so rental prices are rising. At Harb & Co., we are getting calls from clients, friends, and neighbors inquiring about rentals. Based on the volume of rental inquiries, I surmise that most people want to remain in their Altadena, Pasadena, La Crescenta, and La Canada neighborhoods.
Insurance companies are also expected to raise premiums or withdraw from high-risk zones. Rising insurance premiums could force those living on fixed incomes to sell or obtain reverse mortgages. Expect that brush-free neighborhoods will become more desirable. The massive economic impact, with damages over $135 billion, suggests a volatile recovery period.
Speculative investors might buy distressed properties cheaply, but this won’t stabilize the market immediately. This will further reduce home ownership and continue creating a community of renters. Therefore, while some neighborhoods face declining values, others will see appreciation as rebuilding progresses.
Another question about the aftermath of the Eaton Canyon Fire and Los Angeles real estate is, what will the rebuilding process look like? Will we be creating multi-family homes in neighborhoods that were predominantly single-family?
