Property prices drop as sellers and buyers remain at odds in post-fire market
Property values in Pacific Palisades have taken a significant hit in the wake of the devastating Palisades Fire, with some homes seeing losses of around 50%, according to local real estate expert Anthony Marguleas.
Marguleas, founder of Amalfi Estates, noted a stark discrepancy between seller expectations and buyer offers, calling it the most significant market disconnect he has seen in his 32-year career.
“There’s one property on Avenida De La Herradura that received 80 inquiries and multiple offers,” Marguleas said. “We think it traded around $1.3 million, which is roughly a 30% drop.”
Another example is a property on Galloway Street, a 5,200-square-foot lot that was valued between $3 million and $3.1 million before the fire. It is currently listed off-market for $3 million, yet buyers are reportedly only offering between $750,000 and $850,000.
Marguleas and other experts warn homeowners against selling too soon. “We’re telling everyone: do not sell property now, because you’ll be losing equity,” he said. “Every month you wait, your property value is going to go back up to normal.”
The rebuilding process is expected to take five to seven years, based on data from previous California wildfires such as the Woolsey Fire and Paradise Fire. Marguleas predicts that homes with pre-approved plans will begin reconstruction within a year.
State Intervention to Prevent Predatory Buying
In response to concerns over speculative buyers targeting fire victims, Gov. Gavin Newsom issued an executive order temporarily banning unsolicited offers below market value in 15 fire-damaged ZIP codes, including Pacific Palisades and Altadena. The order remains in effect for three months from its signing on January 14, 2025.
“As families mourn, the last thing they need is greedy speculators taking advantage of their pain,” Newsom said in a statement. “We will not allow developers to rip off these communities at a time when they need more support than ever before.”
According to a USA Today report, some homeowners have already received offers from investors attempting to purchase fire-damaged lots for significantly reduced prices. One resident, Beverley Auerbach, said she was approached with an offer for her property before she even had a chance to assess the damage.
“We are going to rebuild. And almost everybody else is saying that,” Auerbach told the outlet. “It’s going to be a long road to recovery, but we’ll do it.”
