Flesner, who works as a consultant for major infrastructure projects, couldn't stand the suspense on the morning of Jan. 8 as he waited to find out if their home had been burned. At 6 a.m., he started heading from a friend's house in Santa Monica into the canyons by foot, passing through what he described as a "virtual warzone" as houses were actively ablaze on both sides of his route. The fire hydrants were bone dry, the caps laying on the ground, and power lines were down, he said.

"I'm a runner, so I knew my way around through different passages," he said. When he reached his street, it was "100% devastation," he said.

Flesner said he's committed to rebuilding, though he knows it will take time. He suspects that, given the age of his property, some remediation work might be required to remove hazardous materials. He also anticipates it will take some time for utilities like water and power to be restored in the area.

He spent the morning Tuesday having "a good cry" on the phone with a representative for his mortgage company. The company has agreed to do some forbearance for six months; after that, they will reassess the loan, he said. "That was one of the small wins," he said.

Ravitz reported that clients are already calling her for architect and contractor recommendations and some are drawing up floorplans. Several are doing so out of personal preference, while others simply have to rebuild for financial reasons. In one instance, clients who moved from New York with their children and purchased a home in the Palisades will get a rebuilding payout of $4.7 million from their insurance company. They would never get that much money if they sold their dirt lot.

"They have to rebuild the house to get their money out," Ravitz said.

Some are starting to take stock of opportunities the crisis might present. Another of Ravitz's clients, whose house in the Palisades was destroyed, inquired about how she might respectfully approach the owner of the lot next door, who is in the same position. She and her family had been thinking of redoing their house anyway and wanted the opportunity to expand their property.

Prem and Mary Ann Akkaraju said that shortly after experiencing the shock of losing their house on La Costa Beach, they decided to rebuild. Originally built around 1969, their roughly 4,300-square-foot house was designed by noted L.A. architecture firm Buff & Hensman and had four bedrooms.

Mary Ann said knowing what other families have lost has kept things in perspective. "It's kind of like a drop in the emotional bucket," she said. "We didn't lose our primary home. We didn't lose all our things. So we are very, very mindful of that." At the same time, the home was a cherished family retreat where they celebrated Christmas and hosted family and friends.

The Akkarajus said they listed their house for sale last year, around the time Prem was named CEO of London-based Stability AI and they thought they'd be spending more time abroad. They're now committed to rebuilding in Malibu. "We're ready to get back," said Prem, who not only wants to rebuild their house, but also said he has reached out to neighbors to begin talking about how to rebuild the community.

Still, the potential logistics of rebuilding throughout the region remain a huge question mark. The possibility of a permitting logjam, shortage of labor and high cost of construction materials are among the concerns.

"Some of these lots are small and the streets are narrow," Ravitz said. "You can't have every single house rebuilding at the same time, just in terms of fluidity and logistics. It just seems unfeasible."

Forecasting the Future

As rental inventory dries up, agents predict more people will look to buy homes in L.A., boosting a luxury real-estate market that had been soft in recent years.

"There is an immediate need for housing," said Lea Porter of the Beverly Hills Estates. To meet the demand, Porter is rushing to list a $9.5 million home in Brentwood, originally set to come on the market in February.

Porter said her client did not change the asking price they came up with before the fire, although she expects they won't have trouble attracting a buyer. "I suspect we will sell this before we ever come onto the Multiple Listing Service," she said.

Some properties that had been on the market for months are already getting multiple offers, said Kurt Rappaport of the Westside Estate Agency. In one case, a house in the Hollywood Hills that was sitting on the market for six months asking $39 million got two new offers since the fires.

Porter said many displaced Palisades residents are looking in Brentwood or Santa Monica, which offer proximity to their former homes. "Nobody wants to leave the community," Porter said. However, because of high demand in those areas, some are venturing farther east or north into the Valley or south to Culver City.

Carl Gambino of Compass said some of his clients, whose children previously commuted from the Palisades to the Harvard-Westlake School, are now looking for homes near its campuses in Sherman Oaks and Studio City. Others who can afford it are looking in areas like Beverly Hills and Bel-Air, where the median prices are about double.

"There's a lot of desperate people with a lot of money," said Lee of Coldwell Banker.

Some agents predict that neighborhoods like Beverly Hills and Malibu could rise in popularity because they're not subject to a mansion tax that applies to the sale of homes $5 million and up in the city of Los Angeles.

On Jan. 13, a group of L.A. agents called on city and state officials to suspend the mansion tax, which has been unpopular among real-estate professionals, expedite building permits and raise the limit on insurance payouts. "In the spirit of rebuilding," the letter said, "we are calling for practical adjustments to laws, regulations and building codes."

At the moment, agents said they simply don't know where people are going to go. Sam Palmer said 23 out of 25 of his childrens' classmates at an elementary school in Pacific Palisades lost their homes. "At this minute, God spared us," he said of the house in Brentwood that he and his wife, Formula One heiress Petra Ecclestone, bought for $30.5 million in 2023. The family is currently at their home in London.

"If 1,000 people from the Palisades want to stay close... well, there's not 1,000 homes available," Palmer said.

-- Libertina Brandt and Sarah Paynter contributed to this article.

Write to Katherine Clarke at Katherine.Clarke@wsj.com, E.B. Solomont at eb.solomont@wsj.com and Jessica Flint at Jessica.Flint@wsj.com.

(END) Dow Jones Newswires

January 15, 2025 21:00 ET (02:00 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.