Real estate investors are buying roughly 40 percent of the land selling in areas impacted by the January 2025 California wildfires, according to a report from Redfin.
In the 90272-zip code (Pacific Palisades), investors purchased 48 of the 119 lots (40.3 percent) that sold in the third quarter. That compares with zero lot purchases a year earlier — from both investors and other buyers.
In the 91001-zip code (Altadena), investors bought 27 of the 61 lots (44.3 percent) that sold. That also compares with zero lot purchases a year earlier from investors and other buyers.
And in the 90265-zip code (Malibu), investors bought 19 of the 43 lots that sold (44.2 percent). That’s more than double the 21.4 percent share of a year earlier.
“In Altadena, there’s a real push around the idea that the community is not for sale,” Sylva Khayalian, a Redfin Premier real estate agent, said in a release. “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.”
A lot of the homes that burned down in Altadena were built in the 1940s or 1950s, according to Redfin. Khayalian said many investors are making lowball offers for the lots, with plans to flip the land into new homes. Some owners are rejecting these offers, but others are signing on the dotted line because they’re desperate to sell, she said. A lot of the residents who plan to sell are elderly or were underinsured when their home burned down, meaning they don’t have the money to rebuild. The rebuilding process has been painstaking for many residents, who have been waiting nearly a year for permits, but Khayalian said she has seen more builders break ground in the past few weeks. Many homeowners who lost their homes are living in rentals nearby, while others have left town.
In Pacific Palisades—a much more affluent neighborhood—some people whose homes burned down have purchased another home to live in while they decide whether to rebuild, said Redfin Premier real estate agent Justin Vold. One of Vold’s clients bought a $3.75 million home near Santa Monica and plans to work with a renowned architect to rebuild their house that burned in Pacific Palisades. Another client whose Malibu home was destroyed by the fires recently purchased a $4.68 million Pacific Palisades house, which didn’t burn in the fires but faces landslide risk.
Vold 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, the pileup of vacant lots on the market will grow.
It’s not uncommon for investors to buy and develop land after natural disasters. And while investors have been active in areas impacted by the Los Angeles wildfires, Redfin agents say there’s so much land for sale that much of it is sitting on the market unsold.
In all three zip codes Redfin analyzed, there are far more listings — of both vacant lots and single-family homes — than sales.
In Pacific Palisades, 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.
“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.”
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.
Some properties in areas impacted by the fires have been hard to value because there’s not much turnover and the surrounding infrastructure has been destroyed, noted Redfin Premier agent Carlos Castillo.
There were 31 sales of single-family homes in Pacific Palisades during the three months ending Nov. 30, up from a record low of just six in the three-month period after the fires started, but down from 45 a year earlier.
In Altadena, there were 58 sales of single-family homes, up from a record low 26 in the three-month period after the fires started, but down from 67 a year earlier.
There are far fewer sales of single-family homes than there are sales of vacant lots in Pacific Palisades and Altadena — a reversal from before the fires.
In Pacific Palisades, there were 107 lot sales during the three months ending Nov. 30, up from zero a year earlier. In Altadena, there were 80, also up from zero a year earlier. In Malibu, lot sales rose to 37 from 12.
“The homes for sale that didn’t burn are only attracting offers if they’re priced reasonably and the owner has remediated ash and smoke damage,” Khayalian said. “The most important thing someone looking to buy in this area can do is figure out if they can afford insurance. Mortgage lenders in California require homebuyers to have fire coverage, and premiums have gone up by 35 percent to 50 percent since the fires.”
One wall of Khayalian’s house burned in the fires, but fortunately members of the community put out the flames with pool water before they could spread. Still, the cost to clean up the damage has been in the hundreds of thousands of dollars. A remediation company cleaned up the ash and smoke residue, which cost nearly $70,000 and was covered by Khayalian’s insurance. But there was also lead exposure due to the fires, which cost $160,000 to clean up — an expense she’s still fighting to get her insurer to cover. The wall that burned cost $20,000 to repair, and there was nearly $30,000 of landscaping work that needed to be done because there was heavy rain after the fires, which created two inches of mud.