Why vacant lots are surging after the L.A. fires
A year after the January fires, many properties in Pacific Palisades, Altadena, and Malibu are still in transition. According to Redfin, vacant lots are piling up—often because the homes that once stood there were destroyed. What’s drawing attention now is who’s buying: investors are purchasing roughly 40% of the lots that sell.
For local residents, that statistic reflects a painful crossroads. For the broader market, it signals a shift in supply: more land is coming to market while many families are still deciding whether rebuilding is emotionally and financially feasible.
What it means for buyers (and aspiring rebuilders)
If you’re looking to buy in these communities, a vacant lot can feel like an opportunity—especially when finished-home inventory is tight. But buying land after a fire comes with unique hurdles that can impact your timeline and budget.
Here are a few buyer takeaways to keep in mind:
- Expect competition from cash-ready investors. Investors often move quickly, may waive contingencies, and can close faster—factors that can make land purchases more competitive than typical home buying.
- Financing is different for land than for homes. Vacant land loans frequently require larger down payments and may come with higher rates or shorter terms than a standard mortgage.
- Rebuild costs can be unpredictable. Construction pricing, permitting timelines, utility hookups, and insurance requirements can dramatically change the “real” cost of the purchase.
- Plan for a two-step strategy. Many buyers use one loan to acquire the lot and another (or a construction loan) to build—so it’s important to map out the full financing plan upfront.
If you’re considering a lot purchase, the winning approach is preparation: a clear budget, a realistic timeline, and a financing plan that matches the property type—not just the neighborhood.
What it means for homeowners deciding whether to rebuild or sell
For homeowners who lost a property, the decision to rebuild or sell isn’t just financial—it’s personal. Still, the market reality matters: the presence of investor demand can provide a potential exit ramp for households that don’t want (or can’t afford) a long rebuild.
Here’s how the surge in vacant-lot listings may affect your decision:
- More listings can create price pressure. When vacant lots “pile up,” buyers have more options, which can reduce urgency and soften pricing unless your lot stands out (location, views, utilities, cleared debris, etc.).
- Investor offers may emphasize speed and certainty. That can be valuable if you want a quick sale, but it may come with a tradeoff in price compared to an owner-occupant planning to build.
- Rebuilding may preserve long-term upside. If you have the resources and desire to stay, rebuilding could position you to regain a home in a neighborhood with historically strong demand—though timelines and costs can be challenging.
A practical next step is to compare three numbers side-by-side: as-is lot sale proceeds, rebuild budget (including contingencies), and the estimated value of the completed home. That comparison often clarifies what’s realistic.
How this affects refinancing (and rebuilding finance options)
Many homeowners in fire-impacted areas are asking a related question: “Can I refinance or restructure my financing while I figure out the rebuild?” The answer depends on what you own today (a standing home vs. a vacant lot), your current loan status, and your future plan.
In general, this environment can influence refinance decisions in a few ways:
- Property condition and occupancy matter. Traditional refinance options are typically designed for habitable homes. If the structure is gone, you may need a different financing path than a standard rate-and-term refi.
- Construction and renovation loans may be the better fit. If your goal is to rebuild, explore financing designed for building costs, draws, and timelines rather than a conventional mortgage built around an existing home.
- Cash flow planning is crucial. Even with insurance proceeds, households often face overlapping expenses (temporary housing, storage, rising construction costs). The right loan structure can help manage that gap.
If you’re unsure whether refinancing, rebuilding financing, or selling is the smartest route, it’s worth reviewing your full picture—loan terms, equity, insurance proceeds, and your ideal timeline—before making a move.
Bottom line: opportunity and urgency are rising at the same time
With investors buying around 2 in 5 vacant lots that sell, the post-fire market is moving quickly. Buyers may find rare entry points into coveted neighborhoods, while homeowners may see a path to liquidity if rebuilding feels out of reach. The key is making decisions based on total cost, financing realities, and your long-term plan—not just the list price of the lot.
Ready to explore your options? Schedule a free consultation with our team today!