A Los Angeles home that was reduced to rubble in the January Palisades fire has become one of the hottest properties on the market, drawing more than 60 offers and entering escrow for well over $1 million — despite being listed for just $999,000.
The once four-bedroom wood-and-stucco house in Pacific Palisades was worth an estimated $2.7 million before flames tore through the area.
Now, it’s little more than a scorched lot with two standing chimneys. But that didn’t stop a flood of investors eager to cash in on a rebuild.
The seller, a widow nearing 70, decided not to endure the long and costly reconstruction process, opting instead to offload the property at a massive loss.
“She has no interest in rebuilding or moving back,” listing agent Richard Schulman, who noted that many homeowners in the area face a similar dilemma, told Bloomberg, which first reported on the sale.
“I can just tell you, generally, that people selling are going to take a huge financial hit.”
The Palisades fire, along with the Eaton fire to the east, killed at least 29 people and destroyed more than 12,000 homes, racking up an estimated $164 billion in damages.
Now, homeowners are scrambling to figure out their next moves as cleanup efforts begin.
Some are taking a gamble on a devastated real estate market.
The listing for the Palisades property described it as “a blank canvas for visionary buyers ready to reimagine its potential.”
That pitch worked — despite some offers coming in as low as $600,000, the top bidder expects to build a luxury home and flip it for at least $3.2 million.
“We thought there was an advantage to be one of the first to market,” Schulman said of the listing’s aggressive pricing strategy.
“It was intentionally a teaser asking price.”
Similar burned-out lots are hitting the market across the region.
In Altadena, a 9,100-square-foot parcel was listed at $449,000 — less than half of what it last sold for in 2023.
Another nearby lot originally priced at $899,000 was slashed to $649,000 in just a week.
Many sellers are making quick exits out of necessity.
“People making decisions quickly are the ones who need money and that’s their only option,” said real estate agent Tracey Kardash. “Or they are just trying to resettle and move on.”
For those considering rebuilding, the road ahead is daunting. Replacing high-end homes in fire-prone areas comes with steep costs, thanks to stricter regulations, a contractor shortage and high borrowing rates.
Insurance coverage often falls short — especially with California’s FAIR plan, which caps total residential coverage at $3 million.
“Almost everyone in the Palisades is underinsured,” real estate agent Anthony Marguleas, who lost his own home in the fire, told Bloomberg.
With rebuilding costs projected at $1,000 to $1,500 per square foot, some homeowners are simply walking away. Older residents in particular are opting to sell, with about 20% of those affected in the Palisades and Eaton fires over the age of 65, according to Cal Fire.
Others, desperate for stability, are jumping into bidding wars for new homes.
Jethro Rothe-Kushel, whose Altadena property burned down, is weighing whether to rebuild — but in the meantime, he’s already purchased another home.
“It’s a crazy market,” he told the outlet, adding that he paid $500,000 over asking and waived all contingencies to lock in the deal. “It was about finding certainty where there is none.”
Even as the dust settles, demand in the area remains sky-high.
Schulman recently sold a home near the evacuation zone just days after the fire broke out — listed at $3.29 million, it went for $4.4 million in cash.
“It’s like TV show stuff, not real life,” he said. “A million dollars above asking!”