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outhern California home prices dipped 0.4% in January, marking the sixth consecutive month of declines, according to Zillow. The average price fell to $862,115, a 1.9% drop from their July high. Economists say while prices may continue to slow, they're unlikely to plummet due to a lack of supply. In fact, some areas are seeing increased demand as a result of the January fires that destroyed over 12,000 homes in Los Angeles County.

    The fires could lead to higher home prices due to the need for rebuilding and insurance costs. However, if insurance rates rise, it may deter buyers and slow price growth. Zillow forecasts essentially flat home prices in the combined LA-Orange county metro area through January 2026.

    Rental prices in Southern California have also been affected by the fires. While asking rents had decreased in many areas over the past year, the sudden loss of housing stock has put upward pressure on costs. In some neighborhoods near the burn areas, like Pacific Palisades and Altadena, median rent rose significantly, with a 2% increase in Santa Monica to $2,501 in January. However, experts caution that it may take several months to determine if rents are trending differently after the fires.