The Los Angeles wildfires are causing widespread destruction, with AccuWeather already estimating the total damage and economic loss at between $52 billion and $57 billion so far. The fires, fueled by hurricane-force winds, continue to threaten lives and properties, particularly in high-value areas near Los Angeles, such as Santa Monica and Malibu.
The wildfires are rapidly spreading through some of the most expensive real estate in the country, where home values often exceed $2 million. Analysis of Zillow pricing for real estate in the region shows a roughly $3.5 million average home value in the area of the Palisades fire and $1.25 million around the Eaton fire.
"This is already one of the worst wildfires in California history," said AccuWeather Chief Meteorologist Jonathan Porter. "If more structures are burned in the coming days, it could become the worst wildfire in modern history in terms of structures destroyed and economic loss."
On that front, Accuweather puts its estimate into context by comparing it to the wildfires in Hawaii in 2023, recalling that "the total damage and economic loss from the wildfires in Maui in 2023 was $13-$16 billion." The damage estimate remains preliminary, as the infernos in California are spreading quickly due to strong winds, with gusts reaching up to 100 mph. Firefighters are battling extreme conditions, with winds further drying out vegetation and intensifying the fires.
At least five fatalities have been reported. More than 100,000 residents have been displaced. The fires have burned more than 27,000 acres and destroyed or damaged 2,000 structures so far, stretching emergency services to their limits. All in all, around 130,000 people are under evacuation orders across the county.
Should the fires continue their rapid expansion into densely populated neighborhoods, the economic loss could rise significantly. Wind-driven embers are spreading flames from home to home, putting many residents are at risk of losing their properties and lives if they haven't evacuated. Many residents in the Pacific Palisades are reporting they have no property insurance because companies no longer provide coverage for real estate in the highly priced and high-risk area, according to an Accuweather report.
Early estimates from insurance industry analysts suggest that the total losses could range from $6 billion to as much as $13 billion. This analysis was provided by Artemis, a data and analysis service focused on catastrophe bonds, insurance-linked securities, and reinsurance capital.
The wildfires are also worsening air quality, with millions of people in Southern California facing dangerous smoke levels. Residents are advised to wear N95 masks and limit outdoor activity.
The fires are fueled by a mix of factors, including strong Santa Ana winds, dry vegetation, and a lack of rainfall. While Southern California's recent wet seasons led to abundant vegetation growth, it has since dried out, creating ideal conditions for fires.
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