Online Reporter
LOS ANGELES. − Devastating fires in Los Angeles has left potential damage of at least US$10 billion.
Even before the additional homes and apartments were destroyed, the largest of the fires – the Palisades Fire – was quickly pushing its way upward on the list of most destructive fires in the state’s history with at least 1,000 destroyed structures.
Pacific Palisades is one of the top-25 most expensive zip codes in the nation, said Firas Saleh, director of North American wildfire models at Moody’s, a global research and analysis firm.
Moody’s had not yet released preliminary loss estimates Wednesday but losses are likely to run in the billions of dollars given the high value of homes and businesses in the area, stated Jasper Cooper, vice president-senior credit officer, for Moody’s Ratings, a credit ratings agency.
“The wildfires in the Los Angeles region have caused tragic loss of life and widespread destruction of property,” Cooper said, adding commercial property losses could be significant. The fire had burnt more than 15,000 acres, while the other large fire in the county, the Eaton Fire, had burned 10,600 acres and more than 200 structures, county officials said.
At least five people were reported dead.
The acreage burned still paled in comparison to the hundreds of thousands of acres burned in the largest wildfires in the state’s history.
But that fact was offset by the real estate prices in the areas burning in Southern California, said Char Miller, professor of environmental analysis and history at Pomona College in Claremont, California and author of Burn Scars, a history of fire suppression in the U.S. published last September.
“One of the realities in large fires that burn into subdivisions is the cost of the homes and the cost to replace the homes is astronomical,” Miller said.
“That may explain why the Palisades Fire and the Eaton fire are going to be so expensive.”
An independent research team at the financial services company J.P. Morgan said earlier Wednesday that it expected the insured losses from the Palisades fire to approach US$10 billion, with most of the economic losses in homeowners insurance.
The median home price in Palisades, an affluent residential area, is more than US$3 million, the J.P. Morgan report stated, while the median home price in Butte County, where the Camp Fire burned in 2018, was less than US$500,000.
The Camp Fire, the deadliest and most destructive in the state’s history, burned over 153,000 acres and destroyed nearly 19,000 structures and the economic losses totaled about US$15 billion, according to the J.P. Morgan report.
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