Lot sales spike after LA fires amid rebuilding challenges 

It's been six months since wildfires devastated two communities in Southern California — and the latest home market data indicates it will take them a long time to heal.

A drop in home sales is not surprising given that the fires caused between $20 billion and $53.8 billion in property damages, according to estimates in a Los Angeles County Economic Development Corporation study commissioned by the Southern California Leadership Council.

But a trend that has taken off early in the recovery phase is property owners in Altadena and the Pacific Palisades neighborhood selling off lots instead of starting the rebuilding process, which could take years to complete.

A jump in lot sales

According to June data from the California Association of Realtors (CAR), the pace of this trend is stunning. As of July 12, approximately 172 properties or land lots were sold in Altadena this year; during the same period in 2024, the total was six.

The situation in the Pacific Palisades is similar, with roughly 94 properties or land lots sold this year compared to one lot for the same period a year ago.

A unique listing challenge

Selling lots that are empty or have damaged buildings is not something agents, particularly in Southern California, are used to handling. Sarah Moore, an agent with Engel & Völkers Pasadena and the 2025 president-elect of Pasadena Foothills Realtors, said things get complicated after destructive fires because of the potential contamination cleanup. 

Once remediation and insurance paperwork is out of the way, the listing situation is still different when compared with a finished house — and that makes setting a price challenging.

"You've got to look at all the characteristics of the lot," Moore said. Along with property basics like size and shape, "some of these blocks still have things on them — so they may have a complete backyard with a beautiful patio, where another one could be completely wiped out."

"You have to look at all the little fine points of it to try and figure out how that's going to work," she added.

Moore, who focuses on the Altadena market, has had clients decide to leave after living in the community for a long time due to the challenges of rebuilding, which include struggling with insurance companies.

Even amid the difficulties, there are stories of hope alongside a strong determination to bring back Altadena's community spirit. In one case, an elderly couple Moore works with decided that while they can't rebuild, they will instead buy another house nearby so that they can stay local.

"Altadena is a beloved community. There are so many people that really want to maintain the spirit," Moore said, adding that these individuals are "really banding together." 

Home sales, prices have dropped

In Altadena, sales were down 54.8% year-over-year, while sales in the Pacific Palisades were down 83.8%, according to CAR data.

For homes that do sell, the median price has dropped significantly. Over the last six months, the median price for a home in Altadena was $867,500, down 39.1% year-over-year. In the Pacific Palisades, a neighborhood known for its high-end homes, the median price was $2.525 million, down 23.7% year-over-year.

These downward shifts are typical when compared with other markets hit by wildfires, according to Jordan Levine, chief economist for CAR. What usually happens next is demand starts returning faster than folks can rebuild.

In Altadena and the Pacific Palisades, demand "is still there for the most part, and ultimately that supply and demand equation will cause prices to start going back up in those areas," Levine said during a phone interview with Real Estate News.

During rebuilding, Levine expects the surrounding communities to see home price jumps until Altadena and the Pacific Palisades can catch up. Meanwhile, watching people leave their communities because of rebuilding challenges is a pattern Levine described as "devastating."

New homes built in these communities will likely be more expensive. In addition to having new features, material costs are expected to increase as a result of tariffs. Labor costs are also expected to increase due to high demand for builders and an anticipated worker shortage amid stricter immigration policies.

"With all of the macroeconomic stuff that's happening in the trade and labor front, I think it just complicates things," Levine said.

Who is buying?

The surge in lot sales signals there are investors who are willing to rebuild. One of the area's biggest investors is Edwin Castro, who grew up in the Altadena area and won a $2.04 billion Powerball jackpot in 2022.

Castro has purchased at least a dozen lots with his brother — and they intend to rebuild in a way that retains the community's character and charm, according to The Los Angeles Daily News.

The intention of other developers is a big question, Moore said. But she's optimistic, particularly for parts of the community that had depressed areas even before the fires. "I feel like, whatever is going to come up, it's going to dramatically change the landscape and elevate that western portion of the city," she said.

The optimism and passion Moore has seen will also help shape the community's character.

"I see these people who've lost everything — and they're still smiling," Moore said. "They're all supporting each other, and it's just the most amazing thing to see. The people who are staying have just the most optimistic, positive vibes going on."