LA County wildfires create fierce competition for homes in Newport Beach, South Bay Nexovant Digital Realty
Phones haven’t stopped ringing for Southern California real estate agents in the wake of the Los Angeles County wildfires.
As survivors scramble to find new long-term housing, a sudden demand for homes to rent in unaffected areas like Orange County, South Bay and neighborhoods surrounding the fire zones has surged dramatically, putting a strain on an already tight real estate market.
Prices are going up and affordable rents are even harder to come by.
“At first, it was people who were evacuated that were looking for a place for the next few days, and then it was people whose houses had burned,” said Tim Smith of Coldwell Banker Realty.
Newport Beach saw a number of available leases claimed, seemingly overnight.
“Every one of those houses had multiple applications and most were bidded up over-lease list price,” he said. “Fast forward to today, in most of those neighborhoods, there’s nothing available for lease.”
Phones haven’t stopped ringing for Southern California real estate agents in the wake of the Los Angeles County wildfires. As survivors scramble to find new long-term housing, a sudden demand for homes to rent in unaffected areas like Laguna Beach has surged dramatically, putting a strain on an already tight real estate market. (Photo by Jeff Gritchen, Orange County Register/SCNG)
The damage caused by the wind-fueled firestorms in the Palisades and Altadena neighborhoods consumed more than 37,000 acres, destroying nearly 16,000 structures and killing 29 people.
Also see: The L.A. fires: A look at the footprints of devastation
Tens of thousands of people displaced by damaged or destroyed homes are now competing for any available lease in Southern California.
“Imagine,” Smith says. “You get your kids into school and a roof over your head but then you have to reassess — like, ‘what do I do now?’ “
Statements by agent Josh Altman, formerly of “Million Dollar Listing Los Angeles,” went viral after he predicted that up to 70% of residents in the Pacific Palisades would not return following the fires. Especially older residents and families with children in schools. And it’s not because they don’t want to go back.
“For every one person who leaves the Palisades, I guarantee, there are 10 that want to be there,” he said. “It’s one of the greatest places in all of California.”
Altman emphasized the deciding factors come down to time to rebuilding —”Let’s call it 5 years.” As for insurance payouts? “Most people were underinsured.” And the cost to rebuild? “People not in the building game are going to find out very quickly that $1,000 a square foot is the the average.”
Read more: Newsom orders Coastal Commission to cease ‘erroneous’ guidance on Palisades rebuilding
Some people can’t leave California because of business ties so they are looking for someplace comparable, Altman said, from surrounding Brentwood and Santa Monica to the South Bay cities of Manhattan Beach, Redondo Beach and Hermosa Beach.
“Demand is absolutely pressing,” said Dave Fratello, a broker with Edge Real Estate Agency. “I put out a listing on a single-family home offered at $14,750 a month in Manhattan Beach last week, and the first request came within 30 minutes after I put it online. Just about everything is going fast.”
Newport Beach and Laguna Beach have also seen a large bump in activity.
On Jan. 25, Stu News Newport reported that Newport Beach Mayor Joe Stapleton gathered community leaders and residents at Oasis Senior Center to welcome people displaced by the fires to the neighborhood.
To the east, the housing market is even tighter.
“We live near the Palisades, and, of course, that’s a super-high-end area, but what about Altadena, Pasadena?” Altman said. “To find a lease in the price ranges between, I would say, $2,500 a month and $7,500 a month is absolutely impossible. The lower you go in price, the more difficult it is to find anything.”
Selma Hepp, the chief economist at CoreLogic, said the region should expect to see rents soar.
Rent growth “will generally triple immediately following” a large-scale natural disaster like wildfires, she said.
While there are consumer protections against rent hikes exceeding 10% in disaster zones, the ongoing housing crisis could push prices higher anyway.
In early January, Gov. Gavin Newsom issued an emergency order aimed at protecting fire victims in Los Angeles County from price gouging. Attorney General Rob Bonta’s office on Jan. 17 said it sent out more than 200 warning letters to hotels and landlords accused of price gouging. The AG said it also has criminal investigations on price gouging underway.
See more: Realtor says ‘there’s been a mistake’ after state charges him with price-gouging in wake of Eaton fire
“You can’t see it in the data a week or two after an event like this happens, you have to wait a little longer to see an impact in, at least, what’s reported,” Hepp said. “So, right now, a lot of us are going off of anecdotal data.”
Originally Published: January 28, 2025 at 12:18 PM PST
