It’s been two months since devastating wildfires tore through Los Angeles County, leaving behind scorched earth, shattered communities and a long road to recovery.
The fires devoured over 16,000 homes, businesses and structures, and while the flames have long been extinguished, their economic and political aftershocks are still smoldering.
The numbers are staggering. The Los Angeles County Economic Development Corporation projects that the wildfires could cost the region up to $9 billion in economic damage over the next five years. Real estate and rental losses alone could climb as high as $1 billion, with total property damage estimated between $28 billion and $54 billion.
Pacific Palisades has already seen land values drop by 25 to 30 percent, with an influx of listings hitting the market. Some see this as a chance for reinvention, but others worry about the long-term effects on home prices and development.
As L.A. grapples with rebuilding, the city’s leadership is also facing heat. A recall effort against Mayor Karen Bass is gaining momentum as critics argue that the city’s response was slow and ineffective, fueling calls for a change at the top.
The movement, launched by LA broker Sahil Nandwani and backed by Nicole Shanahan, a former running mate of Robert F. Kennedy Jr., addresses housing needs, safety and an improved disaster response system. Developer Rick Caruso, a former mayoral candidate, has demanded an independent investigation into how the fires were handled, though he has not publicly supported the recall.
Caruso is taking action through Steadfast L.A., a nonprofit aimed at accelerating rebuilding efforts. Partnering with prefab homebuilder Samara, the initiative aims to construct 100 small homes for displaced families, promising a faster return for some Altadena residents compared to those in the Palisades.
For homeowners and investors, insurance challenges are another major hurdle.
State Farm faces over $600 million in losses from the wildfires, with the company seeking emergency rate increases to offset its financial hit — making California’s already fragile insurance market even more precarious.
Meanwhile, Governor Gavin Newsom is pushing for nearly $40 billion in federal disaster aid, a request that has turned into a political battleground. Some Trump-aligned figures are demanding policy changes, such as defunding the California Coastal Commission, as a condition for relief funds.
Despite the devastation, the rebuilding process is already underway.
The influx of land listings in Pacific Palisades suggests buyer confidence in the rebuild, and Amalfi Estates owner Anthony Marguleas estimated roughly 10 percent of what was burned in the Palisades will be brought to market in the next few years.
The city has burned before, and it has always rebuilt. The question now is whether investors and developers will see opportunity in the ashes or if high construction costs, lengthy permitting processes and an uncertain economic outlook will slow recovery.
Here are some more must-read stories to catch you up on real estate news from this past week:
Exclusive: Fannie Mae’s blacklist of real estate players revealed
The agency blacklisted eight real estate players tied to suspected mortgage fraud, with outstanding loans totaling about $700 million as of March 2024. Some of the individuals, including Boruch Drillman, Moshe Silber and Fred Schulman, have already pleaded guilty to fraud charges involving property flipping and inflated financials.
Rape claims against Alexanders swell as New York law expires
A spate of lawsuits against the Alexander brothers were filed in New York last week, hours before the expiration of a city law allowing survivors to sue their alleged perpetrators. Thirteen more women filed to sue former top brokers Tal and Oren and their brother Alon, bringing the total number of actions against the brothers to at least 28.
How the Ghermezian family, owners of biggest malls in the US, made good on the American Dream
The Ghermezian family, known for owning the U.S.’s largest malls, bet big on retail with American Dream, but their most ambitious project yet is still fighting for profitability. The sprawling, 3-million-square-foot megamall in New Jersey combines high-end shopping with extravagant attractions to create a fantasy world of “retailtainment.”
Trump’s “baby”: Developers spill on what they want in Opportunity Zone 2.0
As Trump’s Opportunity Zone program nears its 2026 expiration, developers are pushing for a renewal, citing its role in spurring investment in distressed areas — though critics argue it mostly benefits luxury projects. The program, created in Trump’s first term and likely to continue in his second, allows investors to defer capital gains taxes by reinvesting in designated zones.
Suddenly, developers want to build trophy offices again
After the work-from-home hit to the office market and rising interest rates brought the pipeline of new Manhattan office space to an all-time low, developers are suddenly ramping up to build the glitzy, high-end offices that deep-pocketed tenants are clamoring for, though by the time their demands get met, it could be 2030.
Developer Vlad Doronin sells waterfront Star Island estate for record $120M
Billionaire developer Vlad Doronin sold his waterfront Star Island estate for $120 million, setting a new record for home sales in Miami-Dade County. An entity led by Michael Ferro, who leads the private equity firm Merrick Ventures, bought the 2.5-acre property in Miami Beach.
Section 8 delays rattle rent-stabilized owners for yet another month
Section 8 landlords in New York City faced yet another month of delayed payments, leaving rent-stabilized owners scrambling for cash flow. For the second consecutive month, deposits failed to arrive on time, with the New York City Housing Authority blaming federal processing delays.