Shock as buyers look to profit as they snap up fire-ravaged lots in LA… here’s how much they cost
Listings for land were homes were destroyed in the Los Angeles fires are appearing in droves, and corporations and individuals are snapping them up in hopes of a discount.
In fire-ravaged Pacific Palisades and Altadena, residents are choosing to sell rather than rebuild because of time or money constraints.
Some simply don’t want to return to the area.
But that’s not stopping buyers – with realtors inundated with enquiries. ‘People want to live where they want to live,’ says Fire Damage House Buyer owner Daniel Cabrera, who specializes in purchasing, restoring, and selling fire damaged properties.
Cabrera says many lots will sell for over asking price and that a few burned properties Palisades and Altadena have already sold. Last week, a scorched lot in upscale Pacific Palisades sold for nearly $1.2 million – hundreds of times the asking price.
Typically, he said regular lots are going for between $1 million and $4 million. Owners of bigger, ocean-view pieces of land are not selling as they can afford to rebuild.
More than 16,240 homes and businesses were destroyed overall in areas that – despite the risk of more destruction – is considered prime real estate for many.
The flames forced some 150,000 people to evacuate and many celebrities also lost their homes in the fires, including Sir Anthony Hopkins Billy Crystal, John Goodman and Anna Faris.
Even though demo still needs to happen, buyers are snapping up land where houses sat
Interest in the burnt out properties is starting to gain traction. Owners and even non-specialist realtors are reaching out to Cabrera for help in dumping their property – and he is having investors approach him on the other side to buy them, even though most of the remaining damage has yet to be fully demolished.
Cabrera said: ‘Give it two years, it’s going be fully built. The demand is there, so people want to live there, right? I was talking to somebody the other day, saying people still live in Oklahoma.
‘There’s a tornado there every other day, and they rebuild every single time.
‘There’s a lot of contractors and builders. Fire damage is something that you know, most individuals don’t want to take on so there’s a lot less competition than, let’s say, developers for just a dated home,’ he explains.
‘A dated home in a good area, will have interest from tons of investors and far more competition. With fire damage, it’s just too much for a lot of people to take on.’
Despite the sales resulting from a tragedy, Cabrera says many sellers may actually benefit financially if they sell.
‘There’s homeowners insurance that is paying out the seller, in addition to what someone is purchasing the home for, so a lot of the time the seller is getting pretty much retail value for their home, and sometimes even more than retail value,’ he says.
He says the convenience of the sale is also enticing for sellers. Closing time is about two weeks and homes can be sold as is, no matter the extent of the damage.
Buyers see potential in the burnt down lots and sellers can even make a profit
Cleanup is ongoing following the Los Angeles wildfires and rebuilding will take years
One buyer predicts it will take two years to get a new home fully built and functioning
Daniel Cabrera is buying up fire homes
Inspections and appraisals are waived, there are no open houses or showings, and rebuilding is a long, uncertain path.
‘There’s been houses with plenty sentimental value and not wanting to let go, which is totally fair. I can totally understand that. But the biggest thing we offer is convenience,’ he says.
‘An individual trying to rebuild or repair, I’m sure they could do it. It’s just how long is it going to take for it to be done?
‘How much more expensive will it be versus just a fresh start?’
Cabrera says despite buyers coming in, builders still need permits and its likely to be two years before any one home is complete.
And it’s impossible to tell right now what the new landscape will look like.
‘Developers that are just eager to get there so and it will just come down to what those pieces of land are zoned for,” he says.
‘If they’re zoned for instance, a hotel already, then I don’t see how the city or the county is going to say that they can’t do it.’
The shore line may look completely different than it did prior to the fires
Firefighters battle the wildfires in Los Angeles that destroyed thousands of homes
The sellers may be making the right move.
Former ‘Million Dollar Listing’ real estate agent Josh Altman predicts a staggering 70 percent of Pacific Palisades residents may never return to rebuild their homes.
The wildfires scorched more than 50,000 acres, claimed 29 lives, and destroyed more than 16,000 structures.
‘They’re not staying away because they don’t want to return,’ Altman told Fox Business.
‘Of course they want to go back there. They’re not going to return because it’s simple math.
‘I don’t believe they’re going to be able to afford to rebuild.’
Meanwhile, it’s been determined that LA’s towering palm trees – an essential part of the city’s ambiance – may be a future threat to the city.
The trees are highly flammable, and their dead fronds turn into embers when sparked that can carry for miles by the wind, making the fires spread quickly.
