People are trying to decide what to do about their burned-out properties.
By ANTHONY MARGULEAS
Since the January 7 Palisades Fire (eight weeks this Tuesday), only one Palisades lot has closed escrow, no homes or condos have closed, and no properties have been leased. We are getting more data daily but are still in the early stages.
Since the fires began, these are all the new listings to come on the market: 18 leases, five condos, 22 homes, and 36 land parcels (burned-down dwellings, of which six are in escrow). We are seeing two-three new land listings coming on per day.
The most surprising aspect is the market’s resilience. Based on other large structural damage fires in the state, we had expected a 30-50% price drop in land values, but that has not happened.
The Riviera has surprisingly appreciated 10-15%, and the Huntington is holding its value surprisingly well.
One Huntington home is in escrow at 611 Ocampo. It had six to eight offers and is in escrow at $4.25M, but pre-fires were closer to $4.6M-$4.7M, so there was only a 10% drop in price.
The Huntington Palisades continues to be the most in-demand area in Pacific Palisades. Overall, we see 10 buyers for every property, and we expect that to continue.
We expect about 10-15% of the burned-down homes, or 600-1000, to come on the market, and continued substantial demand will keep prices firm.
However, we are seeing some sellers ask for very aggressive pre-fire and above prices, which is surprising, to say the least. I am not referring to the Riviera, which is an exception since it was the least affected by the fires.
Also, the other question is how developers expect to profit by buying homes 10-20% below market when their labor costs and materials are far expected to exceed this discount.
Here https://www.themls.com/Share/YWFnYWRiaGFj are the 36 land listings (only one has sold, six are in escrow, and 29 are active).