Wildfire concerns shift Los Angeles luxury housing market in 2025

Wildfire concerns change buyer behaviour in California

The luxury housing market in Los Angeles has shifted in the wake of the 2024 Palisades and Eaton wildfires, according to Bloomberg.

Real estate experts cited safety, evacuation plans and insurance access as key priorities now competing with traditional features such as views and finishes.

Aaron Kirman, chief executive officer of Christie’s International Real Estate Southern California, said buyers are asking more detailed questions about risk and resilience during viewings.

High insurance premiums and limited availability have contributed to slower sales across high-risk zones.

According to the California Association of Realtors, home sales in Los Angeles County fell by 7.9% in May 2025 compared with May 2024, while prices rose by 2.9%.

Homeowners move away from high-risk zones

Ruby Wang, global real estate adviser at The Daftarian Group, said interest is growing in Orange County communities such as Newport Coast and Irvine.

Wang said: “Many of my clients are actively transitioning from LA to Orange County, drawn by gated communities, top-tier schools and a more family-oriented lifestyle.”

She added: “We’re seeing two distinct trends among Palisades homeowners.

“A portion of long-time residents, especially retirees or those disillusioned with urban congestion and tax burdens, are exploring out-of-state options like Texas or Florida.

“But for many younger families and second-generation buyers, the move is more local: They’re relocating to Orange County for the space, safety, and highly ranked schools.”

Kirman said that the perception of hillside homes has changed significantly following the 2024 wildfires.

He said: “Properties in high-risk fire zones are struggling to recover.

“Even homes that weren’t damaged are sitting longer due to skyrocketing insurance premiums or lack of coverage altogether.”

Buyers invest in fire-resilient features

Nathan Wittasek, a fire protection consultant and former firefighter, said clients with greater financial means are integrating protective features into new builds.

Wittasek said: “Among affluent buyers and homeowners, there is clear momentum toward proactive mitigation.

“I’ve worked with several who are baking fire-resilience into their architectural plans — integrating features like Class A roofing, ember-resistant vents, ignition-resistant siding, and operable shutters without sacrificing design integrity.

“These homeowners view such measures not as burdens, but as strategic investments in family stability and legacy.”

He added that lower-income residents are less able to make these adaptations.

Wittasek said: “They are often still navigating delayed insurance payouts, unclear permitting processes or rebuilding assistance that doesn’t fully cover upgrades.

“For them, resilience is still important, but it competes with financial survival.”

Market slowdown in hillside neighbourhoods

Cindy Ambuehl, agent at Christie’s International Real Estate Southern California, said that buyer interest in hillside and canyon homes has declined.

Ambuehl said: “We’re seeing a clear decline in demand for properties perched high in the hills or deep in the canyons, largely due to heightened concerns over fire risk and rising insurance costs.

“In contrast, flatter, more walkable neighbourhoods, particularly those close to retail and dining, are seeing increased interest.”

Ambuehl cited active listings data from the Pacific Palisades area, noting 202 land listings, including 63 new entries and only 16 currently in escrow as of late June.

She said: “Since the fires, just 75 lots have sold, indicating that inventory is coming to market much faster than it’s being absorbed.

“At the current rate, we project the number of available lots could exceed 500 by year’s end.”

Buyers seek insurance clarity and private protection

Carl Gambino, a Compass agent specialising in high-net-worth relocation, said some clients are requesting property-specific fire risk assessments before purchasing.

Gambino said: “Buyers are certainly investigating insurance availability and cost before they buy.

“On the high end some of our clients are getting individual property fire assessments and hiring standby private firefighting companies.”

Gambino also said that relocation has not always meant a full exit from the Los Angeles market.

He said: “We did relocate some families to New York, Miami and even abroad.

“Of those, the majority kept their LA homes.”

Wildfire concerns shift Los Angeles luxury housing market in 2025: Summary

Real estate experts have reported that the Los Angeles luxury housing market has shifted following the 2024 wildfires.

The comments were reported by Bloomberg.

Buyers are now prioritising fire safety and insurance availability over design features.

Aaron Kirman said properties in fire-prone zones are staying on the market longer.

The California Association of Realtors said home sales in Los Angeles County fell 7.9% in May 2025.

Ruby Wang reported increased interest in Orange County, especially among younger families.

Nathan Wittasek said affluent clients are integrating Class A roofing and ember-resistant vents into home designs.

Wittasek also said lower-income homeowners face delays in rebuilding support.

Cindy Ambuehl said demand has dropped in hillside neighbourhoods due to fire risk.

Ambuehl said available land listings in the Palisades are increasing faster than sales.

Carl Gambino said some buyers are hiring private fire services.

Gambino said most clients who moved away kept their Los Angeles properties.