Palisades Fire Displaces Los Angeles Residents Toward Santa Monica and Brentwood as Hillside Living Loses Appeal

Written by:

Rudi Davis

Date:

15 Mar 2026

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Residents displaced by the Palisades fire are bypassing nearby hillside neighborhoods in favor of lower-elevation areas such as Santa Monica and Brentwood. This relocation trend shows that trauma and practical concerns about fire risk now outweigh traditional priorities such as proximity to former homes. Trey Alligood, Lead Agent at The Alligood Group at Douglas Elliman Real Estate, reports that many Palisades residents who initially rented in Bel Air or the hills quickly decided those locations did not feel safe. Most ultimately chose to settle closer to the coast.

“We thought when the fires happened, a lot more Palisades people would move over to Bel Air,” Alligood says. “And that actually didn’t really happen.”

Traditional real estate logic would predict that displaced homeowners stay as close as possible to their original neighborhoods. Instead, Palisades fire victims are intentionally seeking out coastal or lower-elevation areas that feel safer and more familiar. Alligood explains that the fire’s psychological impact has made hillside living emotionally difficult for many displaced residents, prompting a shift in what buyers now consider essential.

Displaced Los Angeles Residents Choose Coastal Areas Over Nearby Hillside Neighborhoods

Palisades residents overwhelmingly favor Santa Monica and Brentwood over Bel Air and other hillside neighborhoods, even though hillside areas are geographically closer. Alligood attributes this preference to coastal access and lower elevations, factors that have only intensified since the fire. Many displaced residents now associate hillside locations with fire danger and personal trauma.

“There are a lot of Palisades clients who do not want to be up on the hill,” Alligood says. “It’s very triggering for them. Most want to be down low, not up in the hills.”

This aversion to hillside living is not only psychological. It also reflects significant financial risks. Properties in high fire-severity zones now carry insurance costs that have tripled or quadrupled in recent years. Some hillside homes now carry insurance premiums as high as $110,000 annually. Alligood notes that these costs, combined with the emotional toll of the fire, are making hillside properties unattractive to displaced buyers regardless of amenities or price.

“We got an insurance quote the other day for $110,000 a year,” Alligood says. “Four or five years ago, that would have been $30,000 or $35,000.”

Santa Monica and Brentwood Prices Climb as Displaced Los Angeles Buyers Flood the Market

The influx of Palisades buyers into Santa Monica and Brentwood has driven up prices in both areas. Demand from displaced residents has outpaced available inventory, driving significant price appreciation. Alligood notes that these two areas have seen the most pronounced price gains among all destinations considered by displaced residents. Bel Air and other hillside neighborhoods have not seen the expected surge in demand.

“Prices in Santa Monica and Brentwood have climbed 100%,” Alligood says. “Those are the two neighborhoods that have seen the most price increase from Palisades victims moving out.”

These price increases are occurring despite broader market softness in Los Angeles. The concentrated demand from displaced Palisades residents has created a distinct micro-market where buyers are less flexible and more focused on safety and lifestyle factors. This dynamic has intensified competition for a limited pool of properties that meet buyers’ new criteria.

Soaring Insurance Premiums Push Buyers Away From Los Angeles Hillside Properties

The fire’s impact extends beyond the Palisades. Insurance premiums have surged across Los Angeles, particularly in hillside and high fire-severity areas. Alligood says insurance has become a major obstacle in transactions, with buyers facing annual premiums up to three times higher than a few years ago. These increases are affecting not only displaced residents but all buyers considering hillside properties, prompting a broader shift away from fire-prone areas throughout the city.

“Insurance prices have tripled or quadrupled. It’s very hard to get some homes insured,” Alligood says. “People are not ready to pay $100,000 a year for insurance. It’s just a hard pill to swallow for anybody.”

The sharp rise in insurance costs is compounding the psychological barriers to hillside living. Buyers must now consider both their emotional comfort and the financial burden of insuring a property in a high-risk area. Alligood says this dual pressure is driving a lasting change in buyer preferences, with many now ruling out hillside homes altogether. Properties in fire-prone zones now face disadvantages that extend well beyond short-term market fluctuations.

Palisades Fire Survivors in Los Angeles Face an Uncertain Choice Between Rebuilding and Relocating

Many Palisades residents remain unsure whether to rebuild or permanently relocate. Alligood expects these decisions to become clearer over the next six months as families weigh their options against ongoing insurance challenges and lingering trauma. Early patterns suggest a significant number of displaced residents may choose not to return, particularly if insurance costs remain high and hillside living continues to feel unsafe. The community’s future may depend on how many residents ultimately choose to rebuild versus establishing roots in Santa Monica, Brentwood, or other lower-risk areas.

“I think we’re going to see that shake out over the next six months,” Alligood says. “Is it time to move on and plant roots in a different neighborhood, or do we want to rebuild?”

The Alligood Group is preparing to serve both residents who rebuild and those who relocate permanently, with plans to expand its team and extend services into markets such as Palm Springs and Joshua Tree. Alligood emphasizes that understanding clients’ emotional and environmental priorities is now essential, as traditional assumptions about proximity no longer apply. The aftermath of the Palisades fire has become a real-time case study in how disaster and trauma can permanently alter real estate decision-making.

Palisades Fire Sets a New Pattern for How Disaster Reshapes Los Angeles Real Estate

The ongoing effects of the Palisades fire highlight how natural disasters can create lasting changes in local real estate markets. Elevated insurance costs and emotional responses to risk are reshaping where people want to live. Prices are rising in lower-elevation neighborhoods while hillside homes attract fewer buyers and carry higher ownership costs. These patterns are likely to persist, particularly as climate-related risks and insurance challenges remain unresolved.

For buyers and sellers alike, the post-fire environment means location decisions are now driven as much by safety and peace of mind as by traditional factors such as commute times and amenities. The Palisades experience serves as a warning for other high-risk areas. When disaster strikes, buyer psychology and cost realities can redraw the map of desirable neighborhoods rapidly.