Palisades real estate market: How long will it take to rebound?

Palisades real estate market According to an industry economist, there will be a “standstill” for some time as the fires rage and tens of thousands of residents evacuate the area.

Transactions will be delayed until the full extent of the damage is assessed, but the market will start moving again for the homes that were unscathed, Redfin Chief Economist Daryl Fairweather told FOX Business.

“There may be some discomfort over the next few weeks. But after the dust settles and the fires die down, I think the impacts will be very localized to just the homes that were damaged,” Fairweather said.

CALIFORNIA Fires.

At least four fires have broken out in Los Angeles County as of 4 p.m. Wednesday. Zero percent of the fires have been contained. officials told Fox News.

In addition, more than 30,000 residents are under mandatory evacuation orders and tens of thousands are without power.Governor Gavin Newsom has declared a state of emergency, warning that the strongest winds are expected between 10 p.m. Tuesday and 5 a.m. Wednesday. :

Homes burn as high winds fan the Eaton Fire on January 7, 2025 in Pasadena, California. (David McNew/Getty Images/Getty Images)

Fairweather believes business will return to normal fairly quickly for homes just outside the evacuation zone, even those next to the damage that are still intact , that the area is so “sought after”.

In 2021, Redfin published a report that analyzed areas directly affected by the wildfires and found that there was an average increase of 595% in the number of homes built in the three years after the wildfire, compared to a 6% decrease in areas outside the fire perimeters.

Because the area is so valuable, he doesn’t foresee a mass exodus from the area and believes redevelopment plans will begin within the year.

A plume of smoke is seen as a brush fire burns in Pacific Palisades, California on January 7, 2025. (via DAVID SWANSON/AFP Getty Images/Getty Images)

Napa, Calif.-based Redfin real estate agent Christopher Anderson previously said that after fires, “local governments tend to fast-track permits and design reviews and push fire-damaged properties to the front of the line.” communities can be rebuilt.

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He added that “after the fires, they build houses in four to six months, whereas it usually takes a year and a half for a builder to put a shovel in the ground.”

However, Fairweather said in the Redfin report that wildfires themselves tend to make housing more expensive.

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“After a town burns down, builders come in and build new homes, which are usually more expensive. And homeowners who stay often invest in making their homes more fireproof, which increases property values,” he said.

Realtor.com Chief Economist Daniel Haley also noted that house and rental prices may increase in the near future as “homes on the market dwindle as homeowners delay plans to sell to assess the damage and displaced locals look to find temporary housing in the area.”

But “the long-term outlook will be more mixed, depending on how quickly redevelopment occurs and whether the desirability of the area outweighs concerns about a possible repeat event,” he added.

Firefighters run as a brush fire burns in Pacific Ocean, California, January 7, 2025. (Photo by David Swanson/AFP) (Photo by DAVID SWANSON/AFP via Getty Images/Getty Images)

In fact, a separate report from Redfin, the real estate firm, reports that builders are confident of redeveloping in high-risk areas, given that demand is in. Actually, more people are moving in than that, according to an August 2021 Redfin report from areas facing a high risk of forest fires and other natural disasters related to climate change.

Conversely, Jake Herceg, a licensed architect with extensive property operations experience and Ballast’s chief operating officer, says buildings “in dense, urban areas like San Francisco, California, are safer long-term investments versus suburban and rural areas, which are higher risk.”