Where well-off LA wildfire victims are headed
Celebrity real estate agent Josh Altman of “Million Dollar Listing” fame says he believes 70% of Palisades residents will not return to that community in the wake of the fires. His wealthier clients can afford to relocate.
Many of his Palisades clients ready to move want to stay in California and are looking at high-priced properties in:
- Santa Monica
- Brentwood
- Beverly Hills
- Lower Bel Air
- Newport Beach
With the exception of Newport Beach, all of these are relatively close to the Palisades area, so Altman’s clients may want to maintain a semblance of familiarity. They are among the privileged clientele who can afford to do so.
Zillow put the average Santa Monica home value at $1,673,029. For Beverly Hills, it's $3,453,888. In Brentwood, it's $2,758,838. In Newport Beach, it's $3,321,652. And Bel Air has the highest average home value at $3,855,639.
The danger of these communities is that they are still in Los Angeles County, which is at ongoing risk of wildfires.
However, they may be somewhat safer options than the Palisades, where homes were destroyed because they were located near brush and vegetation. Moving away from that area does mitigate the risk of wildfires somewhat.
In contrast, some of Altman’s clients are looking to leave California entirely and move to Scottsdale or Las Vegas. They’re also looking at lower property costs.
The average home in Scottsdale, AZ costs $827,308. In Las Vegas, it's a more reasonable $425,474. So that may be a destination for displaced wildfire victims who aren’t loaded with money.
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Learn MoreWhy rebuilding may not be an option
For homeowners of modest means, rebuilding may not be an option due to lack of insurance. Between 2020 and 2022, California insurers declined to renew 2.8 million homeowners policies, of which 531,000 were in Los Angeles County.
The Standford Daily reports that more than 100,000 Californians lost access to private homeowner insurance, affecting one in seven homeowners in the Palisades.
Even homeowners who have insurance may not be able to rebuild in their communities. Amy Bach, executive director of the nonprofit consumer advocacy group United Policyholders, told CNBC that two-thirds of LA wildfire victims or more are underinsured. And if their insurance won’t cover the full cost of rebuilding, they might have to go someplace where it’s cheaper to buy or build a home.
For those who can afford to rebuild in the Palisades, experts warn that the process could take years due to the region’s hilly, rocky terrain. It will take time to collect and remove toxic materials on the surface. Meanwhile toxins, ash and debris from the wildfires seep into the earth and contaminate the water system.
"It will probably take months until communities have reliable drinking water again," says Thomas Young, a civil and environmental engineering professor at the University of California, Davis.
On top of financial and logistical barriers to rebuilding, the psychological toll of the fires may be driving people to relocate instead of rebuilding in the Palisades.
It could take survivors a long time to recover from that trauma. A fresh start somewhere else may not only be a more affordable and safe option, but a preferable one from a mental health perspective.
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