You won’t believe what’s happening now in Pacific Palisades. After the devastating fires, the land there is being put up for sale at truly strange prices.
What is the Pacific Palisades area?
Pacific Palisades is one of the most prestigious residential areas on the west side of Los Angeles. It’s a picturesque location at the foot of the Santa Monica Mountains, with ocean views, green hills, and expensive villas. The area has about 7,000 residential lots.
Consequences of the Fires: How the Land Market Changed
During the recent wildfires, more than half of the lots in Pacific Palisades were damaged or completely burned down. The scale of the destruction is impressive. But the most surprising thing is how the market reacted to this. Many owners decided not to rebuild their homes, but to sell the lots to developers. This created a wave of listings on the market, where land is selling, despite the risks, at very high prices.
Example Calculation: How much does it cost to build a house on an ashes?
Suppose you want to purchase a 0.2-acre lot for $2,500,000. What awaits you next?
💡 Mandatory expenses:
- 📐 Architect and engineer: ~$100,000
- 🧱 Building a house according to fire safety regulations: ~$2,000,000
- 💸 Mansion Tax (luxury tax): 4% of the sale price
- 🧾 Closing Costs: about 6%
Bottom line: how much do you need to earn to not lose money?
For the investment to yield at least 15–20% profit, you need to sell this house for at least $6,500,000. This means that:
💰 $2,000 per square foot – that’s how much a finished house must cost on the market.
Is the property worth the money?
This is the main question. At first glance, the investment seems irrational. But demand in areas like Pacific Palisades is growing, especially among foreign buyers and investors focused on long-term projects. If you are a high-net-worth investor and are ready to work for the future – such a project can pay off. But if you are looking for quick returns or minimal risk – you should carefully analyze alternatives.
Factors to consider when buying land in Pacific Palisades
- 🔥 Risks of repeated fires – building requirements have become stricter
- 📈 Land scarcity in premium locations – limited supply
- 💼 Potential price growth – the LA luxury market always retains value
- 🏗️ Complexity of the construction process – high cost and long timelines
- 🧾 Additional expenses – permits, inspections, insurance
Conclusion
The land market in Pacific Palisades today is a blend of risks, opportunities, and strategies bordering on an adventure. The area affected by the fire is now becoming an arena for expensive construction experiments.
🤔 Do you think a house on this land is worth the money?
📞 Want to get a calculation for a specific lot or a consultation on purchase strategy? – Contact me.
Written by Maria Shmagliy, Los Angeles Realtor
