'We were a hidden gem.' Pacific Palisades residents reckon with rebuilding.

Kimberly Stepp is staying in Pacific Palisades. The cofounder and principal at the Stepp Commercial brokerage firm proclaims her loyalty to the neighborhood as she stands on a burned-out stretch at 843-847 Via De La Paz watching a crew clear debris from the site that once held her office. She's waiting for smoke remediation to be completed on her nearby home so she and her kids can move back in.

Fashion retailer Elyse Walker, too, is eager to rebuild what she lost in the fires. Her flagship retail store on Antioch Street sits in cinders while the property's landlord considers a rebuilding timeline.

Others, like the Lee family, are leaving. The family trust sold a leveled retail strip they'd held for 30 years rather than wait out the slow permitting and reconstruction process. And Richard Schulman, a residential broker at Keller Williams Realty who sold the first fire-damaged home lots after the blaze, said he’s seeing a steady increase in distressed listings like that of his client, an older single woman who isn't able to rebuild.

“It’s been a real mix,” said Heather Bell, a residential agent with The Agency who has clients weighing their options in the once-picturesque seaside community. “Different scenarios for different people."

Four months after one of California's worst wildfires on record tore through Pacific Palisades — destroying nearly 5,500 single-family homes and dozens of apartment buildings, stores and offices — residents, property owners and business leaders are emerging from the ashes with different ideas of how to rebuild what was lost.

Without a clear path forward, the future Palisades community will be borne from both individual and collective decisions.

"The initial reaction was we will rebuild," Bell said of her community. Her own house is still standing, but it's filled with ash and unlivable. Now, Bell and her husband are living in a condo in the Palisades while they wait for their home to be restored.

"As time goes on, I think reality sort of sets in," she added. "People have moved to Manhattan Beach, Newport Beach. They’re living kind of normal lives, like you can almost act like it never happened if you’re living somewhere outside of this area, so people are really torn."

Through the uncertainty, residents and stakeholders have started to rebuild. The Army Corps of Engineers is clearing 50 lots a day, with most properties expected to be cleaned by midsummer. Construction is underway on two homes, with 10 other plans approved and 100 in permitting. Key gathering spaces are also rebounding, including the Palisades Village mall, set to reopen at the start of next year, and the Palisades Recreation Center, expected to start construction within a year.

“If we don’t act fast, more people will opt out,” said Lewis Horne, CBRE president of Greater LA, Orange County and Inland Empire, who is working with a group of local real estate leaders and academics to offer advice on rebuilding and recovery efforts. “This community can come back — but only if we find a way to work together.”

On a recent sunny afternoon in the once-glitzy neighborhood, contractor trucks idled outside fire-gutted homes, while some lots were marked with signs reading “Debris Removal Complete” and “Not for Sale.” The dual messages of forward momentum and defiance are the new norm for the Los Angeles neighborhood.

Nearly 200 fire-damaged residential lots have been listed to date, according to local broker Anthony Marguleas, owner of Amalfi Estates, whose own house was destroyed. Of those, 21 have sold and 16 are in escrow. In the past two weeks alone, 26 new fire-damaged lots hit the market, an average of nearly four per day. More homes are slated to hit the market in the coming months, with inventory expected to peak in late 2025, brokers note.

“There’s a clear trend,” Marguleas said. “Some owners are trying to preserve equity by selling early before competition overwhelms the market.”

Schulman — who listed the first lot post fire — sold the 10,000-square-foot parcel of scorched land where a 2,500-square-foot ranch home once stood for $1.2 million to a developer. Pre-fire, it might have fetched at least twice that. The median sale price for the neighborhood came in at about $4.3 million before the onset of the fires on Jan 7.

“It took us about a month and a half to sell it, which is pretty quick for land,” Schulman said.

More than 60 offers came in, all above asking. But the buyer is taking on a significant burden: handling debris removal and rebuilding from scratch.

For residents, the decision to move isn't an easy one, but building — or rebuilding — a house is a big undertaking, Bell said.

"Most people don’t want to build; they just want to live their lives and show up and their house is there," she said. "It’s just sort of daunting, so I think people are still really figuring it out."

There are also those homes that were scheduled to hit the market before the fires.

"I was planning to list a beautiful 6,400-square-foot modern farmhouse, but that burned down," Bell said.

Bell's clients, however, didn't want to wait two to three years to sell, and the burned lot hit the market in February. The process came with some unusual anxieties, such as potential backlash from neighbors.

"I just was a little nervous, like I was sort of tiptoeing through the process," she said. The property remains on the market for $2.95 million.

"I've gotten a good response, but if I'd priced it really low, people would probably have come out of the woodwork," Bell said. "I've had a lot of interest from builders, owner-users, people within the Palisades that lost their homes that want to switch up their location."

At the same time, some residents are hesitant to add to the exodus that's taking hold. Tiffany Hu, a real estate agent with Douglas Elliman and resident of the Palisades, for example, is encouraging her neighbors to rebuild. Hu's house is still standing, but she's struggled to get insurance coverage for the damage it did sustain.

“We were a hidden little gem, so we want to keep it that way," Hu said of the Palisades. "We don’t want congested traffic. We want to keep it exclusive still for our little town that we love.”

One of the first homes in Pacific Palisades to secure a rebuilding permit is nearly identical to the one it replaces: a two-story, five-bedroom, 4,400-square-foot house originally completed in 2022.

Local builder Dolan Design Build made minor adjustments to improve fire resiliency, and received approval just three weeks after submitting plans, facilitated by a home design that stayed true to the originals. The family hopes to return by the start of next year, in time for the one-year anniversary of the fire’s containment, to a familiar-yet-more resilient version of the home they evacuated.

While some homeowners are moving forward, others are stuck in limbo — especially those awaiting city upgrades to critical infrastructure like power and phone lines.

Their frustration came to a head during an April webinar the Pacific Palisades Community Council held in which residents pressed Hagerty Consulting, the city-appointed firm that's managing disaster recovery, for answers about the slow pace of rebuilding.

Tensions flared after the firm’s representative declined to take questions following the presentation that some residents — including Lee Ann Daly, a former marketing executive at ESPN and Reuters who lost her home in the fire — found lacking in substance.

“We’re all completely vulnerable and destabilized in a way that’s hard for us because we’re used to having a lot of agency,” Daly said. “For many of us, our lives are here, and our future wealth for our kids exists in this community. You need to know that we have a trust issue with the people who are paying you.”

It's a precarious situation for both buyers wanting to enter the community and sellers looking to leave, according to Bell.

"Everybody's sort of delicately watching and going, is it too early?" she said. "And then other people are like, wow I never could've afforded to be on this street ... all of the sudden I can get into a neighborhood on a street that I couldn't before."

While some speculative developers are actively bidding on Palisades properties, a significant share of buyers are former residents whose lots burned — many of whom are upgrading to better views or purchasing nearby lots so their children or other family members can move in, according to Marguleas.

Commercial landlords face similar uncertainty — compounded by the need to reestablish traffic to support their tenants.

On Antioch Street, longtime area retailers, including Elyse Walker, lost their spaces. Her store is at a complex owned by KWP Real Estate, where the landlord said all but one tenant plan to rebuild and return.

“Every single one of them is asking, ‘When are we going to rebuild?’” said Alice Myers, senior managing director of Southern California for KWP Real Estate. “They’ve been here forever. None of them want to leave.”

But just down the street, a family sold a burned-out former retail strip at 15326 Antioch St. it had held for more than 30 years — and that once housed a barber shop and UPS store — to a Beverly Hills private investment firm for $1.5 million, a fraction of what local brokers estimate the site will be worth in 10 years.

Other commercial owners are seeing opportunity. Justin Kohanoff plans to build an eight-story apartment building with up to 100 units on the site of a burned Shell gas station at 15401 W. Sunset Blvd.

The project would be a shift for a community that has valued its ocean views and exclusivity. Some residents have voiced concerns about the building's size and potential effect on the community, while the developer — who grew up in the Palisades — notes the project could add affordable living options to the neighborhood.

While government agencies manage debris and permitting, some residents are banding together to rebuild without changing the neighborhood's look and feel.

Together Palisades, a grassroots group locals formed, has divided the neighborhood into districts with volunteer captains to distribute updates. They post “Not for Sale” signs at major intersections to warn off speculative developers and boost local spirits with regular Zoom calls. Another group, 1Pali, hosts webinars and publishes detailed recovery timelines for residents.

Large-scale stakeholders, meanwhile, are pushing for broader coordination.

The Urban Land Institute, in partnership with USC and UCLA, is crafting a private-sector rebuilding strategy. CBRE's Horne, who helps lead the effort, said nailing down a community cleanup and rebuilding timeline — not just funding — is the top priority.

“We need clarity on timelines, financing, and land use rules,” he said. “There are too many people flying blind.”

Steadfast LA, a coalition led by developer and local stakeholder Rick Caruso, is focused on rebuilding shared infrastructure — parks, town centers, and public gathering spots — to draw back residents.

“Palisades is going to come back,” Caruso said on a recent 1Pali webinar. “But government does not have a sense of urgency. Residents need to hold City Hall accountable.”

Caruso warned of coming cost pressures and advised homeowners to rebuild quickly rather than hesitate.

“I would build sooner than later,” Caruso said. “The longer you wait, the more prices will rise. And if you wait for undergrounding utilities or other delays, your street could be a construction zone for years.”

The path ahead for many residents depends on insurance markets. Years of fire losses have pushed many carriers to exit California or cut coverage, making it difficult to obtain financing.

“Without insurance, you can’t get a loan. And without a loan, 99% of the population can’t rebuild,” Horne said. “We need a real conversation with the insurance and lending industries.”

Government assistance is helping. A total of $53.9 million in wildfire recovery aid is being distributed to businesses and individuals. The Federal Emergency Management Agency, the Small Business Administration and local programs are offering grants, loans and tax relief.

For some longtime residents, though, the next chapter is about more than just rebuilding property.

“People are worried about where their kids go to school, where they’ll hang out, what their new routine will be,” Stepp said.

Even for those whose homes are still standing, there are questions about when the neighborhood will be livable again.

Bell said part of why she and her husband love the Palisades so much is because of the community, much of which no longer exists.

"There’s really nothing," Bell said. "It’s hard — all the things you love about your community have been taken away. We don’t plan to sell our house or anything. We will definitely hold onto it. It’s just a matter of, when would we go back? We’re not sure yet. We’re just not sure yet."

As questions remain for residents and outsiders, so does hope, Stepp said.

“This will still be an amazing, beautiful, wonderful town,” Stepp said. “It's not just about rebuilding structures, it's about bringing back the heart of the community, the walkability, the familiar faces. That's what made this place special.”