CoreLogic: It may take years to know the full extent of the Los Angeles fires

Losses from the Palisades and Eaton fires estimated at $35 billion to $45 billion

CoreLogic: It may take years to know the full extent of the Los Angeles fires

Losses from the Palisades and Eaton fires estimated at $35 billion to $45 billion
Palasides fire
An aerial view of the fire damage sustained during the Palisades fire.

The two largest fires in the Los Angeles area are now fully contained but it could take years before the extent of the damage is known and the burned-out neighborhoods fully recover.

“It’s probably going to be a couple years until you have a lot of certainty in what those losses will be,” said Jon Schneyer, director of research & content at CoreLogic.

To fully rebuild the neighborhoods will likely take much longer, he told Scotsman Guide on Monday.

“It’s going to be maybe several years until you see a majority of plots with active construction,” Schneyer said. “It’s going to take time.”

The Palisades fire destroyed roughly 5,900 structures and the Eaton fire took out about 6,100 structures, Schneyer said. These tallies include commercial properties, but most are homes.

Driven by extreme Santa Ana winds and unusually dry and hot weather, the Palisades fire erupted on Jan. 7 and swept through parts of the coastal Palisades, Malibu and the Santa Monica Mountains. About 20 miles away, the Eaton fire raged through neighborhoods in Altadena and Pasadena. The fires are now fully contained, Cal Fire reported this week.

Last month, experts told Scotsman Guide that affected homeowners would likely face higher insurance and mortgage costs.

By CoreLogic’s preliminary estimates, the Palisades and Eaton fires wreaked an estimated $35 billion to $45 billion in damages.

“We’ve been evaluating the damage, and we actually still feel pretty confident in that loss estimate,” Schneyer said.

A precise damage tally, however, won’t be known until all the insurance claims are adjudicated, Schneyer said. Even a preliminary count of the damaged structures is difficult to assess. One reason is that it’s unclear how many homes still standing can be salvaged.

CoreLogic’s estimates are partly based on aerial photography. Some homes that appear to have survived the fires might prove unlivable once inspected. Other homes near the fires have smoke damage, for example. Some may need to be demolished and rebuilt.

“These homes might be, essentially, toxic just from the exposure to smoke and heat for so long,” Schneyer said.

It will be a monumental task to rebuild the neighborhoods. The demand for construction labor and materials will surge, which will increase the home replacement costs, Schneyer said.  

Unlike after some natural disasters where neighborhoods have never fully recovered, these LA neighborhoods will probably be rebuilt given the high land values, particularly in the pricey Pacific Palisades area.

“People still want to live in Southern California, in the LA area,” he said. “It’s a desirable part of the country to live, and I imagine that’s going to help keep people in the area and bring the area back to what it once was.”

Author

  • Victor Whitman

    Victor Whitman is a contributing writer for Scotsman Guide and a former editor of the publication’s commercial magazine. 

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