Broker says recovery in LA could take years
One year ago, Southern California was in the midst of devastating wildfires, particularly in Pacific Palisades and Altadena.
Once the final embers were put out, more than 16,000 structures over 59 square miles were destroyed in the blaze. A year later, many of those same lots sit empty.
According to World Property Journal, approximately 40% of vacant lot buyers in the third quarter of 2025 were real estate investors. In Pacific Palisades, 48 of 119 lots sold were bought by investors. In Altadena, it was 27 of 61.
Many homeowners who haven’t sold their property continue to wait for insurance companies to pay out benefits from the fire. Others just started seeing payouts in November.
Amir Nurani (pictured top), broker-owner at Left Coast Leaders in Southern California, said payouts have been too slow, and there aren’t enough builders to cover all the lost property. The recovery is going to be lengthy.
“The investors went up and picked up a lot of that vacant land, because it's just rubble at this point,” Nurani told Mortgage Professional America. “One of the reasons why that happened is because the insurance company payouts aren't happening quickly. Contractors, there aren't enough of them. The build back in LA is going to be years in the making.”
Cutting their losses
While some homeowners hold out hope of rebuilding on their charred land, others either couldn’t afford to wait for payouts or chose not to. Many sold their property and rebuilt their lives somewhere else.
“A lot of the homeowners there just decided to cut their losses and sold the land to investors and moved on with their lives,” Nurani said. “Those homes would be built back, but if you think about where those fires were concentrated, they're in Pacific Palisades and the expensive areas. The homes that are going to get built back there are going to be the high-end homes. Obviously, all of LA was on fire. There were single-family residences that were priced in the million range.”
Because there weren’t enough construction crews to get all the homes built back, even homeowners who did receive payouts from insurance companies couldn’t use that money to immediately rebuild. So they chose to sell rather than wait.
“The main thing is that there was a bottleneck as far as being able to actually get those homes built back,” Nurani said. “That's why the investors picked them up. Because investors have long-term money. They can sit on that, wait, and get them built back. They don't have to worry about occupying them as their primary residence.”
Market is turning
Nurani said that while the Los Angeles market continues to suffer from inventory issues, in large part because of the wildfires, other areas of Southern California are starting to see a shift from a seller’s market to a buyer’s market.
“I think the housing market has softened a bit, meaning that the pendulum has swung from the direction of a hard seller's market into a bit of a buyer's market,” he said. “The demand and supply are starting to see a bit of equilibrium there right now. In today's world, buyers actually have a chance at buying a home. We’re seeing price reductions. We're seeing seller concessions.
“It makes sense, because properties are sitting for longer. In 2020 and 2021, when the housing market was red hot, properties on the market were under escrow inside of a week, sometimes the same day. Now, you see a property hit the market. It's not uncommon for it to be on the market for 45 to 60 days, maybe even longer.”
While some reasons for a slowdown include high prices and rate fatigue, Nurani also thinks people are concerned about their jobs because many tech companies have announced large layoffs.
“There are a couple of reasons why we're seeing that slowdown,” he said. “One of the reasons for the slowdown is rate fatigue. Rates are high, payments are high, and prices are high. It's an affordability issue. The other part is I think that there's a real economic scare in the marketplace. There's a lot of uncertainty. We’re seeing job loss happen across the board. People are a little bit afraid for their jobs right now, rightfully so.”
With rate declines early in 2026 and more forecast for the year, Nurani thinks the market may swing back in favor of sellers later this year.
“The buyer’s market is not going to last,” he said. “If rates actually dip down by about 75 basis points, and you start seeing rates in the 5s getting advertised everywhere, I think that's enough to invigorate the market. And I think that you will actually have a supply constraint coming down the pipeline.”
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