T
he Palisades real estate market is expected to experience a temporary slowdown due to the ongoing wildfires and evacuations. According to Redfin's Chief Economist Daryl Fairweather, deals will be delayed until the full extent of the damage is assessed, but movement in the market will resume for homes that remain unscathed. While there may be some initial uncertainty, Fairweather believes the impacts will be localized to damaged properties.

    As of Wednesday afternoon, at least four fires were burning across Los Angeles County with zero containment, and over 30,000 residents were under mandatory evacuation orders. California Gov. Gavin Newsom declared a state of emergency, warning of powerful winds expected between Tuesday night and Wednesday morning.

    Fairweather expects business to return to normal quickly for homes outside the evacuation zone, even those adjacent to damaged properties that remain intact. She notes that the area is highly sought after, which should make it easy for these homes to attract buyers. In fact, a 2021 Redfin report found a 595% average increase in new home construction within three years of a wildfire, compared to a 6% decrease outside fire perimeters.

    Fairweather doesn't foresee a mass migration out of the area and believes rebuilding projects will begin within the year. Local authorities often fast-track permits and design reviews for properties hit by fires, allowing communities to rebuild quickly. However, wildfires can make housing more expensive due to increased demand and property value investments.

    Realtor.com chief economist Danielle Hale notes that home prices may increase in the short-term as homeowners put off selling plans to assess damage and displaced locals seek temporary housing. However, the long-term outlook will depend on how quickly rebuilding occurs and whether the area's desirability outweighs concerns about repeat events.