The January 2025 wildfires that devastated areas of Los Angeles and created wide swaths of vacant lots has become an investment boon.
Real estate investors are buying roughly 40% of the land selling in areas impacted by the wildfires, according to a new report from Redfin, the real estate brokerage powered by Rocket.
In the 90272 ZIP code (Pacific Palisades), investors purchased 48 of the 119 lots (40.3%) that sold in the third quarter. That compares with zero lot purchases a year earlier—from both investors and other buyers.
Redfin reported that in the 91001 ZIP code (Altadena), investors bought 27 of the 61 lots (44.3%) that sold. That also compares with zero lot purchases a year earlier from investors and other buyers, Redfin said.
And in the 90265 ZIP code (Malibu), investors bought 19 of the 43 lots that sold (44.2%). The study said that’s more than double the 21.4% share of a year earlier.
Many Investors Making Lowball Offers
“In Altadena, there’s a real push around the idea that the community is not for sale,” said Redfin Premier Real Estate Agent Sylva Khayalian. “People who plan to stay are encouraging others not to sell because of how much it could change the neighborhood—but for some residents, selling is the only option that makes financial sense.”
Redfin said that many of the homes that burned down in Altadena were built in the 1940s or 1950s.
Khayalian said that many investors are making lowball offers for the lots, with plans to flip the land into new homes.
Some owners are rejecting those low offers, but others are signing on the dotted line because they’re desperate to sell, Khayalin said.
Redfin said that many of the residents who plan to sell are elderly or were underinsured when their home burned down, so they don’t have enough money to rebuild. Regardless, the rebuilding process has been painstaking for many residents, who have been waiting nearly a year for necessary permits.
Khayalian said that she has seen more builders break ground in the past few weeks.
Many of the homeowners who lost their homes are living in nearby rentals, while others have left town, Redfin said.
Renting While Deciding to Rebuild
In the more affluent Pacific Palisades neighborhood, some people whose homes burned have bought another home to live in while they decide whether to rebuild, Redfin Premier Real Estate Agent Justin Vold said. One of his clients bought a $3.75 million home near Santa Monica, and plans to work with a well-known architect to rebuild the house that burned in Pacific Palisades.
Another client whose Malibu home was destroyed by the fires recently bought a $4.68 million Pacific Palisades house that didn’t burn in the fires but faces landslide risk.
Vold said he expects to see more buyers enter the market as insurance stops covering temporary rentals for people whose homes burned down and as more residents give up on the idea of rebuilding.
If more people decide against rebuilding, Redfin said that the pileup of vacant lots on the market will grow.
Redfin said that it’s not uncommon for investors to buy and develop land after natural disasters.
In all three ZIP codes Redfin looked at, there are far more listings—of both vacant lots and single-family homes—than sales.
Listings for Vacant Lots Rises
In Pacific Palisades, Redfin said that there were 309 lot listings during the three months ending Nov. 30, up from just seven a year earlier. In Altadena, lot listings jumped to 225 from two over the same period, and in Malibu, they rose to 214 from 125, Redfin said.
“There are so many lots sitting on the market that sellers are starting to cut prices to attract offers,” Khayalian said. “Many of the lots that are selling in Altadena are in the $500,000 to $600,000 range. If there was still a home on them, they might sell for $1 million or more.”
Redfin said that the typical lot that sold in Altadena during the three months ending Nov. 30 went for $510,000, while the typical lot that sold in Pacific Palisades went for $1.6 million.
In Malibu, the typical lot that sold went for $1.3 million.
The post Vacant Lots Surge After L.A. Wildfires as Investors Scoop Up Land first appeared on The MortgagePoint.
