One year after the devastating wildfires that swept through parts of Los Angeles in January 2025, the financial impact is becoming clearer, and the recovery remains slow.
A new analysis from Realtor.com shows that home values in some of the hardest-hit neighborhoods are still far below where they stood before the fires, with rebuilding lagging far behind expectations.
In Pacific Palisades and Altadena, two communities hit by the Palisades and Eaton fires, billions of dollars in housing value have been erased. In Pacific Palisades, the total value of homes destroyed by the fire dropped sharply between late 2024 and the second half of 2025. Altadena saw a similar pattern, with steep declines in the value of homes that were completely destroyed, as well as those that were damaged but not leveled. Even homes that escaped physical damage but sat inside burn zones lost value over the past year.
Altogether, the fires wiped out an estimated $8.3 billion in housing value across the two areas. That figure does not include losses in nearby communities, such as Malibu or Topanga, meaning the full regional impact is even larger.
Sales data also highlights how much value was lost. Homes bought in recent years and later sold as vacant lots after the fires typically sold for about half of their pre-fire purchase price. With the structure gone, buyers must factor in rebuilding costs, long permitting timelines, and insurance uncertainty.
While rebuilding is underway, progress has been slow. In Pacific Palisades, thousands of permits and plans have been approved, but only a handful of homes have actually been completed. Altadena has seen more permits issued, yet just a few homes and small residential projects have been finished so far. Many displaced residents are still living in temporary housing.
The fires also reshaped local housing markets. In both communities, more owners chose to sell rather than rebuild, leading to a surge in vacant lots for sale. As lots replaced intact homes in the for-sale mix, median prices fell sharply. At the same time, livable homes became scarcer, pushing up prices for properties that survived the fires.
Insurance has emerged as another major hurdle. With private insurers pulling back from high-risk areas, many homeowners are turning to California’s FAIR Plan, which offers limited coverage at much higher cost. Local agents say insurance challenges are now one of the biggest obstacles to closing deals. Altogether, the data paints a picture of a housing market still finding its footing, where recovery is uneven, rebuilding is slow, and the long-term effects of the wildfires are far from over.
The post A Year After L.A. Wildfires, Home Values Are Still Struggling to Recover first appeared on The MortgagePoint.
