The impact of the fires is becoming more evident on the westside, with prices continuing to break records, especially in Santa Monica and also further south in Manhattan Beach. The affected Palisades buyers with the means to pay cash are paying way above market value to move into a new house.
|
Year-over-Year (YoY) |
Month-over-Month (MoM) |
|
|---|---|---|
|
Homes for Sale |
+25% |
+2% |
|
New Listings |
+19% |
-18% |
|
Homes in Escrow |
-3% |
+6% |
|
Closed Sales |
+2% |
+22% |
|
Median Sale Price |
+12% |
+8% |
Unfortunately, we saw a significant drop-off in new listings MoM. I was hopeful the increase in new inventory would continue. However, it was short-lived, and it was the usual January pop. Prices are hitting new records, eclipsing the crazy market of early 2022. The sluggish condo market also performed well last month, with condo prices outpacing house prices.
How the Fires are Impacting the Market
The market on the westside continues to outpace other areas of LA with many Palisades buyers wanting to stay close to home. However, they are also venturing elsewhere. My market data includes the South Bay, and even though I don’t closely follow Manhattan Beach, this area is also getting a lot of very wealthy Palisades buyers. Moreso, there’s a strong belief that many of these buyers who have relocated to MB won’t return to the Palisades after they realize life there is pretty amazing—especially those with kids who don’t want to pull them out of school again.
The Rest of the Market
This is harder to answer. It seems to be constantly evolving and, much like last year, property and neighborhood-specific. It does feel like the market is heating up, but many agents are talking about how it’s not across the board, and there’s no blanket statement. What’s interesting is that mortgage rates are continuing to drop. This is mainly caused by all the news surrounding tariffs, and as we’ve witnessed, that’s been all over the place. We’re in a much better market now compared to last year. However, it sometimes feels similar to last year, where there’s still so much noise to contend with; buyers and sellers, or potential sellers, are unsure what to do. It’s hard to pinpoint exactly where we are headed, but I’m optimistic there will be considerably more sales than in the past two years.
Rebuilding
A steady trickle of burnt-out lots in the Palisades is hitting the market. Prices range based on the location, and the activity is increasing. Even though it makes more sense to rebuild and potentially sell financially, many homeowners don’t want to deal with that and would prefer to take the land value, plus the insurance, and move on. There’s also talk that Thomas James Homes is going to be rebuilding a lot of the area, and this could be problematic for prices. TJH builds homes that are mostly about quantity over quality and are often cookie cutter with no real soul or personality. Other developers will be building homes, so the hope is there will be more of those getting built than Thomas James homes.
