True Cost of 2025 Los Angeles Wildfires Emerges a Year After the Disaster

A year after wildfires devastated parts of Los Angeles, the true cost of the destruction can now be revealed as recovery lags.

The Palisades and Eaton fires of January 2025 caused property values to plummet, with many parts of the city that were affected still struggling to recover and the majority of residents continuing to live in temporary housing.

A new housing data analysis conducted by Realtor.com® researchers reveals that the total value of destroyed homes in the fire zones of the celebrity-studded Pacific Palisades enclave and working-class Altadena fell from $14.7 billion to $10.8 billion and from $7 billion to $4.7 billion, respectively, between late 2024 and the second half of 2025.

Homes damaged by the fires but not completely ravaged saw their total value decline from $2.2 billion to $1.9 billion in Pacific Palisades and from $825 million to $658 million in Altadena.

Even properties that were not physically affected but merely located in the hardest-hit burn zones experienced significant losses, with aggregate values falling from $10.4 billion to $9.4 billion in Pacific Palisades and from $3.8 billion to $3.2 billion in Altadena.

Altogether, the fires erased an estimated $8.3 billion in home value across the two scorched suburban L.A. communities. Notably, that total does not take into account losses in other affected enclaves, such as Malibu and Topanga.

Analysts used the average of the latest available automated valuation model home values from real estate analytics firms Cotality and Quantarium. 

Looking at homes purchased between 2020 and 2024 that were reduced to ash and later sold as vacant lots in 2025, sale prices were typically about 50% lower than their most recent pre-fire purchase prices in both Pacific Palisades (-51.6%) and Altadena (-51.3%), reflecting the loss of livable structures as well as the cost and uncertainty of rebuilding.

The analysis includes only properties assessed by the California Department of Forestry and Fire Protection (CAL FIRE) and captured in its damage assessment data. It's important to note that a substantial number of properties are not represented in the CAL FIRE data and therefore are not reflected in these figures.

"Taken together, the sales and valuation data indicate that the fires led to large, immediate losses in housing wealth for destroyed properties, alongside more moderate but widespread value softening across surrounding neighborhoods," says Realtor.com senior economic research analyst Hannah Jones.

How far has rebuilding come after the fires?

In the past year, more than 1,400 rebuilding permits have been issued by the city of Los Angeles in and around Pacific Palisades. And while more than 1,740 construction plans have been approved and 417 projects have begun construction, only two homes have been fully rebuilt.

City officials hailed the end of construction on the first home to receive a certificate of occupancy—a four-bedroom house on Kagawa Street—as a "major milestone" in late November. However, it was rebuilt not by a displaced family but by developer Thomas James Homes as a "showcase home" highlighting the recovery progress.  

In Malibu, the upscale oceanfront community that lost nearly 600 single-family homes to the Palisades fire, only 22 official building permits authorizing reconstruction have been issued to date, according to the city's rebuild dashboard.

Meanwhile, Los Angeles County has doled out over 1,110 permits in hard-hit Altadena, according to the county's permitting progress dashboard. So far, construction has been completed on just four single-family homes, one multifamily property, and three accessory dwelling units.

In early December, 67-year-old Ted Koerner became the first resident of Altadena displaced by the Eaton fire to receive a certificate of occupancy for a fully rebuilt primary home.

Koerner, who has been living in hotels and rundown rentals since the disaster, rebuilt his one-story, three-bedroom, two-bathroom home in just over four months despite permitting delays, wrapping up construction on it in time for the winter holidays.

How did the L.A. wildfires start?

The Palisades and Eaton wildfires ignited just hours apart on Jan. 7, 2025. The Palisades blaze sparked in the late morning hours in the Santa Monica Mountains, then quickly raced westward toward the Pacific Ocean, destroying large swaths of Pacific Palisades, Topanga, and Malibu neighborhoods lying in its path.

Roughly eight hours later, another fire touched off near Eaton Canyon in the San Gabriel Mountains near Pasadena. Whipped up by a powerful Santa Ana wind, the flames overwhelmed the dry, rugged terrain before barreling into the heart of Altadena.

It would take more than 8,000 firefighters 24 days to extinguish the two monstrous wildfires, but not before at least 31 people were killed and more than 16,000 structures—an estimated 12,000 of them homes— were destroyed, including roughly 7,000 in the Palisades and 9,000 in the Eaton burn zones.

All told, the twin fires—among the most destructive in California history—caused total property and capital losses ranging between $76 billion and $131 billion, with insured losses estimated at up to $45 billion, according to the UCLA Anderson Forecast last updated in March.

Nine months after the wildfires, authorities arrested 29-year-old Jonathan Rinderknecht, accusing him of starting a small fire with a "barbecue-style" lighter on Jan. 1, 2025, that continued smoldering underground before flaring up six days later and exploding into the deadly Palisades wildfire, according to the Associated Press.

Rinderknecht, a former resident of Pacific Palisades living in Florida at the time of his arrest, was indicted in October on charges of malicious destruction by means of a fire, arson affecting property used in interstate commerce, and timber set afire. If convicted, he could face up to 45 years in prison. 

While the cause of the Eaton fire has not been officially determined and remains under investigation by CAL FIRE a year later, the U.S. Department of Justice in September 2025 sued Southern California Edison, claiming that the utility’s equipment ignited the inferno. 

"SCE knew about the potential danger posed by the high wind event and the risks posed by power and transmission lines but failed to take action to prevent it from igniting a fire," the complaint stated.

How did the wildfires reshape L.A.-area housing?

Roughly 2 out of every 5 single-family homes in Pacific Palisades and Altadena sustained some level of damage as a result of last year's wildfires, based on CAL FIRE damage assessments linked to the full housing stock data from Realtor.com.

This wholesale destruction of housing units displaced an estimated 100,000 residents in the immediate aftermath of the fires.

Despite measures taken at the city, county, and state levels to cut through red tape and fast-track recovery, postfire rebuilding has been hampered by rising construction costs, labor shortages, and disputes over insurance payouts.

As a result, 70% of households that lost their homes were still displaced nine months after the disaster, according to a survey conducted in October by the Department of Angels, a fire recovery organization.

The report found that 9 in 10 Pacific Palisades residents and 8 in 10 Altadena residents had no homes to return to, forcing many to rely on makeshift living arrangements.

"The rebuilding process has been slower than anyone hoped," real estate agent Brock Harris, with the firm Brock & Lori, tells Realtor.com. "While debris removal moved quickly, the permitting and construction bottlenecks are real. Many families are still in temporary housing a year later, which is heartbreaking."

Victor Currie, real estate agent at Douglas Elliman Real Estate, agrees, slamming the recovery efforts as "a failure."

"The permitting process still moves at glacial speeds," Currie tells Realtor.com. "The talk of waiving permit fees for affected homeowners has been a mess. People I know who lived in the burned neighborhoods but didn’t completely lose their homes still haven’t been able to move back in because of the smoke damage remediation issues. Plus, who really wants to live in the middle of a giant construction zone?"

However, Currie sought to put the impact of the fires on the Los Angeles–area housing market in perspective.

"L.A. is huge, and as horrible as the fires were for everyone affected, they were only in a few small areas relative to the region as a whole," he notes. "We certainly lost a lot of inventory in an area that already had a shortage of housing, but prices were already high here." 

How have home and lot prices shifted in the Palisades?

In Pacific Palisades—a wealthy neighborhood that counts a host of Hollywood A-listers, including Reese Witherspoon, Ben Affleck, and Tom Hanks, among its residents—roughly 37% of all single-family homes sustained more than 50% of damage in the fire, leaving them essentially destroyed.

According to a housing data analysis from Realtor.com researchers, of the uninhabitable properties in Pacific Palisades, just under 14% were listed for sale over the past year—mainly as empty lots—with a median listing price of $2 million.

By comparison, homes evaluated by CAL FIRE but spared by the flames had a median listing price of $3.5 million in 2025.

Unsurprisingly, the number of lots listed for sale in town has surged over the past year. In December 2024, before the fire, there were just 10 parcels of land on the market with a median price of $2.6 million. A year later, that number had jumped to 204.

Looking at Palisades' inventory as a whole in December 2025, beyond just the properties assessed by CAL FIRE, the typical lot came with a $2.2 million price tag, down more than 15% from a year ago, and spent 82 days on the market.

"We're definitely seeing money flowing in to buy developable lots because lots are available now, but those investors will likely need to be prepared for the carrying costs while they go through the massively backed-up permitting process," says Currie. "The global perspective is still that L.A. is a solid, safe place to park money."

Meanwhile, the median listing price of the typical intact home in the neighborhood was $6.9 million in December 2025, and it spent 72 days on the market.  

From January through September 2025, sales of Pacific Palisades properties, including lots, doubled compared to the same period in 2024. However, the median sales prices plunged from $3.7 million to $1.9 million over the past year, in line with the typical listing price for lots in the area.

How have home and lot prices in Altadena changed?

Located a short driving distance from downtown Los Angeles, the diverse, solidly middle-class community of Altadena was ravaged by the Eaton fire, which left more than 41% of its single-family homes unfit for habitation.  

Data analyzed by Realtor.com experts shows that of the gutted homes in Altadena, just shy of 10% were put up for sale over the past year, with a median listing price of $600,000.

On the other hand, properties that survived the wildfire but were assessed by CAL FIRE saw a median listing price of $1.3 million in the past 12 months.

The typical burnt lot in Altadena lingered on the market 60 days in 2025, just five days longer than the typical intact home.

Harris, with the firm Brock & Lori, says he was surprised by how rapidly Altadena's lot values recovered in the aftermath of the Eaton wildfire.

"I expected a longer depression in land prices, but demand for rebuild opportunities came back within months," says the agent. He adds that while initially property values in the burn zone plunged by up to 40%, they soon rebounded to within 15% to 20% of pre-fire norms.

Meanwhile, livable homes became increasingly scarce, driving prices up by more than 15% and often triggering bidding wars.

When considering Altadena's entire for-sale inventory beyond CAL FIRE-assessed properties, the number of land parcels for sale in town jumped from just three in December 2024 to 136 last month. As of last month, the typical lot had an asking price of $650,000—half of what it was a year ago.

During the first nine months of 2025, home sales in Altadena were more than 58% up from a year before, yet the median sales price retreated from $1.35 million to $650,000.

Harris also says that closings in Altadena are down about 40% compared to pre-fire levels—but that is not the only thing that has changed about the local housing market.

"Demand split dramatically," says the agent. "Traditional buyers pulled back while builders and investors jumped in."

According to Harris, Altadena has seen an influx of out-of-town cash buyers, particularly from the San Francisco Bay Area, snapping up burned lots. Harris estimates that outside investors currently account for about 30% of lot purchases—but he argues that it is still not enough to revive the city.

"We need more investors," he contends. "There are 150 to 200 lots for sale right now with no takers. These people need to sell and don't care who buys."

How does Pacific Palisades measure up against Altadena?

Jones, the Realtor.com senior economic research analyst, says that the destruction caused by the January 2025 wildfires led to a major shift in the mix of homes for sale in both Pacific Palisades and Altadena.

"More owners opted to sell rather than rebuild, bringing a higher number of lots to market. Because many of these properties no longer include a structure, sale prices have fallen," she says.

Jones confirms that some existing owners are choosing to walk away from their leveled properties, creating opportunities for investors, builders, and some enterprising buyers to purchase land in a historically desirable location at lower prices with plans to rebuild and sell for a profit once long-term demand rebounds.

Jones further explains that property prices in both Pacific Palisades and Altadena have seen steep declines over a relatively short time period because many transactions now involve vacant lots rather than habitable dwellings.

"This compositional shift alone can push median prices down sharply, even if underlying land demand remains strong," notes the analyst.

But there are some important differences between the two L.A.-area housing markets devastated by the natural disaster.

"Pacific Palisades' higher price point likely contributes to a greater share of destroyed properties being listed," says Jones. "Higher carrying costs can encourage owners to sell sooner, and the area’s luxury orientation may make rebuilding more complex and expensive, with longer timelines and more intensive permitting for custom, high-end homes."

On the other hand, in more affordable Altadena, homeowners may be more inclined to hold on to their properties and rebuild.

How has the home insurance landscape changed?

Even before the January 2025 wildfires, California was experiencing a severe insurance crisis, leaving many homeowners in high-risk areas unable to obtain coverage. 

In the wake of several recent fires, major private insurance carriers like State Farm, Allstate, and Travelers stopped offering new policies or renewing existing ones in areas with elevated risk, while the remaining insurers willing to provide coverage were granted permission from the state to hike rates.

The insurance carriers’ exodus has forced hundreds of thousands of homeowners throughout the Golden State to turn to the California FAIR Plan, the state-backed insurer of last resort, where limited coverage comes at a steep price.

As of September 2025, FAIR Plan reported $647,000 in total dwelling exposure, up roughly 50% from a year ago—and a staggering 303% jump compared to September 2021. 

The number of policies on FAIR Plan's books swelled to over 625,000, up roughly 38% from the same period in 2024. 

Local real estate professionals say that limited access to affordable home insurance in L.A. and its suburbs has become a major obstacle to the housing market’s recovery.

"It's the biggest transaction killer now," says Harris. "Deals fall apart weekly over insurance."

Currie, with Douglas Elliman, notes that while most homes remain insurable, premiums have gone up significantly across the board. Notably, FAIR Plan policies are typically more expensive and offer less coverage than private insurance, and he says that could play a critical role in a buyer's choice.

"I had a buyer last year deciding between two properties that were less than a quarter-mile apart, but one was eligible for standard insurance and the other was on the FAIR Plan," recounts the agent. "The cost difference was roughly a month’s mortgage payment, so that became the deciding factor."

Looking to the future, climate scientists warn that the risk of wildfire in California is not going away.

Los Angeles stands out for having the highest combined value of homes that have an increased likelihood of being destroyed in a wildfire in the next 30 years, at $476.5 billion, according to the Realtor.com 2025 Housing and Climate Risk report.   

Both Currie and Harris maintain that Los Angeles and its suburbs are less prepared now than before for another flaming disaster.

"I wish I could say I thought our local governments were better prepared, but seeing how slow things are moving with the permitting and rebuilding processes, I can’t help being pessimistic," notes Harris.