The destructive fire that have hit Los Angeles in recent weeks has fueled an already troubled housing market, leading to rising mortgage rates that have fueled inflationary concerns.

Officials say more than 12,000 houses have been damaged by a Los Angeles wildfires, which have affected Pacific Palisades and Altadena, as well as the Malibu area. At least 27 people have died in the wildfires, which continue to be dangerous as firefighters work to contain the blaze, which was driven by Santa Ana winds.

With the fire destroying many homes in these areas and many people in the area being ordered to evacuate due to the heat, people looking for rental properties are seeing prices rise significantly compared to the pre-market. a fire broke out.

“The wildfires have had a huge impact on the real estate market in Los Angeles,” David Berg, founding partner of Smith & Berg Property Group, Compass, told FOX Business. “Entire neighborhoods have been devastated, driving out landlords and putting a lot of pressure on the already low housing market. Families whose homes have been destroyed are urgently looking for rent, and are driving the neighborhoods.”

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Daryl Fairweather, an economist at Redfin, echoed the same sentiment, telling FOX Business that they are not the target a rented house see higher rents, but “people whose rents have recently gone up may be hit with unexpected increases.” Fairweather added that some people are looking at rentals as far away as Santa Barbara because of the high demand near the fire station.

Joel Berner, chief economist at Realtor.com, told FOX Business in an interview that from Jan. 4 to Jan. 11, there were several zip codes near the fire station that saw significant jumps in rental rates following the fires. In the 90403 zip code, which he described as being in Santa Monica southwest of the Palisades Fire, rents are up 33.9%. Another Santa Monica zip code, 90404, saw a 23% increase in rents, while the central Pasadena zip code of 91125 also saw a 20% increase over the same period.

Berner also said that the data is still “noisy” as some parts of LA saw rents falling week after week, and that after a full week of data after the fire it would be easy to see the full impact of the rental market. results.

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A view of damaged homes and buildings destroyed by the Palisades Wildfires in the Pacific Palisades area of ​​Los Angeles on January 11, 2025. (Axelle/Bauer-Griffin/GC Images/Getty Images)

The law of California increases the prices due to the declared emergency up to 10% of the emergency price, and Attorney General Rob Bonta emphasized in a recent press conference that the law prohibiting the increase of prices applies to housing and rentals.

Zillow, the real estate marketplace that includes rental listingstold FOX Business that it is “taking steps to help address inflated rental listings in affected areas that appear on our platform” by “initiating our internal systems to flag potential violations and remove listings that are inflated beyond the emergency.”

“If renters see potential violations, we encourage them to report these listings to Zillow and California officials. We believe it is important for real estate agents to follow local real estate laws, including consumer protections against foreclosures and natural disaster relief. We are providing resources to understand. their responsibility,” said a Zillow spokesperson.

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Damaged homes along the Pacific Ocean after the Palisades Fire in Malibu on Wednesday, Jan. 15, 2025. (Eric Thayer/Bloomberg via Getty Images/Getty Images)

Stuart Gabriel, professor of economics and director of UCLA’s Ziman Center for Real Estate, told FOX Business in an interview that while homes in fire zones are often more valuable, some of the residents may be older or earn less than their average incomes. . wealthy neighbors, as some houses date back six or seventy years. This can cause problems when they want to rebuild.

“You have to separate the value of the house from the people who live in it, and in the case of houses built in the 1950s and 1960s, clearly, the owners have the same wealth as their houses – but they may not be high-income families. , they may be low-income families and time most of them are elderly families,” he said.

“So it’s not clear that these families have the opportunity or the money to pay off the debt that they need and engage in the rebuilding process that will be difficult and difficult and take time and energy,” he said. he added.

Chimneys stand amid debris after the Palisades Fire in Pacific Palisades, California, on January 8, 2025. (AGUSTIN PAULLIER/AFP via Getty Images/Getty Images)

Mr. Gabriel said that the state and local authorities are looking to accelerate the reconstruction of similar buildings in the areas affected by the fire, but he added that there will be changes in the number of buildings, the use of fire-resistant materials, different shapes. and other usage changes deal with a fire hazard.

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“The reconstruction of these areas will happen. It is not impossible – these areas are very important, they are very important. But it will take time for resources to be changed and re-positioned so that these areas can return to a new place. cooperation,” said Gabriel.