Blazes swept through the Pacific Palisades and Altadena on Tuesday, compelling thousands of households to evacuate and igniting a housing quest throughout the area as victims searched a constrained market for properties to lease or even purchase. It has commenced.
Local brokers report that individuals find themselves in a dire predicament. Their residences are in ruins, and they are seeking stability. They want a place for their families to come back to, not a makeshift shelter, a friend’s home, or a hotel room. Some landlords are now significantly increasing rents beyond what temporary price gouging regulations permit. Furthermore, some potential tenants are participating in bidding wars by offering a full year’s rent upfront in cash.
“Scores of individuals are vying for the same property,” stated David Berg, a Compass real estate agent with Smith & Berg Property Group. “Our phone has sounded hundreds of times since Tuesday afternoon.”
Berg and F. Ron Smith went public on Friday. newly constructed home Situated in Brentwood, just adjacent to the Palisades. Within an hour on the market, the listing garnered 10,000 views on Redfin.
“We are striving to get numerous families into residences, and it’s becoming quite challenging,” Berg remarked.
Last week, the duo listed a property in Santa Monica. Prior to Tuesday, no one had shown interest in the house. They have exhibited it seven times since then and already have two offers.
Evan Fisher’s family abandoned their five-bedroom house in the Palisades. By Wednesday, he and his wife were exploring the leasing market for comparable properties nearby so their three daughters, ages 17, 15, and 10, could attend the same school. Regardless of the home’s condition, he believes it might still be intact, but recognizes that returning home will be a lengthy process and wishes to offer as much normalcy as possible for his kids.
“There are thousands of individuals attempting to do the same thing,” said Fisher, a 49-year-old psychologist.
Fisher scrutinized hundreds of listings online and visited nine. He has submitted applications for two homes in Bel Air and Beverly Hills.
“If it’s God’s will, one of them will materialize,” he stated.
The agency reports that rents are already escalating due to mass evacuations resulting from the fire, with leases being executed at inflated rates. For many individuals, short-term rentals, particularly furnished options, appear to be the clear solution. Volunteers compile spreadsheets and lists of available rental properties, most of which are assembled minutes to hours after a listing goes live.
Compass agent Susan Kastner noted that every rental property currently available receives numerous offers because so many families are competing for rentals.
She had a property for sale on Las Casas Avenue in the Palisades, but she was unsure if it was still intact, and since she couldn’t verify, she couldn’t entertain any offers.
For those who have lost their homes, purchasing makes sense, even out of desperation. Smith mentioned that some families are already accessing insurance benefits and can opt to allocate them towards rent or a new mortgage.
“It will likely take over three years to hire an architect and navigate the planning, permitting, and construction phases,” Smith remarked. “Thus, families are contemplating whether to lease for three years or purchase something now.”
While Malibu and Santa Monica might be prime destinations for individuals fleeing the Palisades, Smith indicated that people are also exploring options in Venice, Westchester, Mar Vista, and beyond the pass into the San Fernando Valley. That’s the reality.
“There’s an influx of real estate agents relocating families in every direction from Santa Barbara to Palm Springs to the South Bay,” mentioned realtor Darby Woods.
Woods rents a seven-bedroom home in the Palisades, and every part of it except the pool house survived the fire. She hasn’t received any inquiries regarding it—likely because people assume it’s burnt—so she refreshed the listing to clarify that it’s still standing, albeit probably quite smoky. I intend to specify that.
Shana Tavangarian Soboroff, a real estate agent with Beverly Hills Estates, evacuated her parents’ Pacific Palisades residence on Tuesday. She was residing there while her own home was under construction nearby. Even amid the turmoil, she was receiving calls from clients seeking new accommodations in the vicinity.
“I have a lengthy list of clients who are actively searching for replacements,” Soboroff stated on Wednesday, just hours before discovering her parents’ home had been consumed by fire.
Soboroff mentioned she had four rental properties listed, all single-family homes, some of which had been unoccupied for several months. Two were in West Hollywood, one in Beverly Hills, and one in Venice. By Friday, all four had been leased at prices ranging from approximately $15,000 to $20,000 per month. In both scenarios, the new tenants are individuals who lost their homes in the Palisades fire.
Regarding the Venice and West Hollywood properties, they were leased for more than the listed price. However, Soboroff stated this is because prospective tenants are increasingly offering higher amounts. “It’s panic among tenants who’ve lost their homes,” she said. “It feels like this tragic event unfolded just yesterday, and suddenly they feel compelled to act. So they’ll proclaim, ‘We’ll pay it all in advance for a year.’ They are trying to entice landlords to choose them.”
Nevertheless, two of Soboroff’s landlord clients opted not to raise the asking rents for their properties. One of them, personal injury lawyer Andrew Alexandrov, owner of a Beverly Hills house for which Soboroff facilitated a lease, expressed his distress regarding the interest in the property following the fire. “It felt genuinely terrible to exploit a disaster for profit,” he remarked. “As a personal injury attorney, I deal with calamities constantly. When individuals are at their lowest, you aim to assist them.”
Soboroff, who grew up in the Palisades, stated she is searching for homes for about 15 clients. Thirteen of them began collaborating after the fire ignited in the Palisades. She has several properties for sale, including listings in Westwood and Century City.
Other survivors are realizing that delays are unavoidable as thousands of individuals attempt to renovate their homes concurrently amid the pandemic, and they want to rebuild as swiftly as possible rather than purchasing new properties.
Real estate agent Brett Parsons received a call at 11 a.m. Wednesday from a client whose father’s house had burned down, seeking contact details for well-regarded architects Parsons knew. Parsons provided seven names, and he heard back from his client by Wednesday afternoon, less than a day after the house was destroyed.
The state’s price gouging regulations were activated on January 7 after Governor Gavin Newsom declared a state of emergency and are designed to limit rent increases.
According to these regulations, landlords generally cannot charge over 10% more than they were charging or advertising before the state of emergency, as stated by the California Attorney General’s Office.
However, real estate broker Michael Noorman estimated that single-family rental properties are being listed for about 20% more than his expectations prior to the fire.
“They figure it out quickly,” he remarked regarding the landlords.
Protections against price gouging are enforced by state attorney general’s offices and local district attorneys. Offenders could face up to a year in prison and significant fines.
Anya Rohrer, a policy advocate with the California Rural Legal Assistance Foundation, stated that landlords are bound by the 10% cap even if there is a bidding war where someone pays more, and officials have introduced price gouging protections. She indicated there is a strong likelihood that the law will be actively upheld, as in previous instances.
“I suspect there are some landlords out there who legally don’t understand the law and are merely trying to exploit a dreadful situation for maximum profit,” Lawlor stated. “Others are more aware and simply believe they can evade scrutiny.”
One property whose rent has altered is a four-bedroom home on Delbert Place in Encino. The property was advertised on January 3 for $9,000 a month, according to Zillow.
The asking rent for the property has since shifted following the fire and state of emergency, climbing nearly 28% to $11,500.
In a phone conversation on Thursday, listing agent Soheila Mirfakhrai expressed discomfort at raising the price, but the owner insisted she do so without explanation. She mentioned she was unaware of the price gouging regulations.
The rent was reduced to $9,800 after Mirfakhrai spoke to the Times by phone. This represents an increase of nearly 8.9% from the requesting rent on January 3rd.
“He agreed to lower the price,” Mirfakhrai relayed in a text message. “I told him it was unjust, and I was resigning.”
Mirfakhrai stated she was not authorized to give out contact information for the owners and could not reach them for any comments.
“In some instances, it can approach 50 percent of the rent,” stated Heidi Jensen, a real estate agent assisting families displaced by the Palisades fire.
“I believe it is highly unethical and wrong to exploit people who are in need in this manner.”