Los Angeles wildfires threaten over $40 billion in residential real estate

The recent wildfires in Los Angeles County have placed over $40 billion worth of real estate at risk, as reported by the Realtor.com economic research team. Since the Eaton and Palisades fires ignited on January 7, they have expanded to cover more than 15,800 residential properties, collectively valued at $40.3 billion.

The median home value within the Eaton fire boundaries is estimated at $1.3 million, while homes within the Palisades fire boundary average around $3 million. In contrast, the median home value across L.A. County stands at approximately $870,500.

Not all homes within the fire perimeters were destroyed; some may still retain significant land value despite structural damage. CoreLogic estimates that reconstruction costs for all affected properties exceed $13 billion.

The report highlights that residences within these fire zones represent 0.9% of Los Angeles County's residential properties but account for 2% of the county's total property value. About 100 homes have been listed for sale in these areas in 2025, making up roughly 1.3% of all active listings in L.A. County this year.

Los Angeles has been grappling with a housing shortage exacerbated by rapid household formation outpacing single-family home construction by more than two-to-one from 2013 to 2023. The area added about 290,000 new households but issued only around 107,000 single-family building permits during this period.

While growth in apartment rentals has partially offset this shortage—with approximately 220,000 multifamily permits issued over the past decade—limited supply continues to drive high competition and prices in L.A.'s housing market.

Rental pressures are anticipated due to displacement from the fires. In December, rents in Los Angeles ranked fourth highest nationwide after New York City, Boston, and San Jose. The median asking rent for a zero- to two-bedroom home was $2,750—a slight decrease from last year—but rental vacancy rates reached their highest level in a decade at 5.9%.

Realtor.com reports increased local traffic to rental listings compared to national averages as residents seek alternative living spaces post-fire.