1 year after LA wildfires, investors are moving in 

Nearly a year after the Palisades and Eaton wildfires scorched parts of Los Angeles County, two new reports are offering a clearer look at the impacts on housing within the devastated areas.

Tens of billions in housing value was threatened within the burn zones. But many residents whose homes were impacted have moved on, leaving investors to scoop up many of the vacant lots to rebuild. 

A clearer snapshot of the devastation

A new Zillow report assessing the fires' impact on housing estimates that $46 billion in home value — representing 19,605 residential units — was within the perimeters of the Palisades and Eaton fires, where the median home value was $1.95 million.

A Los Angeles County Economic Development Corporation study commissioned by the Southern California Leadership Council earlier this year estimated that over 11,000 homes were ultimately destroyed in the fires.

The fires' impacts continue to reverberate through the region's housing market. Beyond the physical destruction, the loss of thousands of homes has affected affordability and price growth.

"While home values nearby have dipped a bit, in line with broader Los Angeles trends, the most evident impact was on supply," Zillow Senior Economist Orphe Divounguy said in the report.

There has been a "sharp increase in listings just outside the burn zones," Divounguy noted, which "likely reflects a mix of homeowners accelerating planned sales or owners of second homes deciding to list in response to the sudden shift in local demand."

The housing cost impacts are compounded further by California's home insurance crisis. Insurance rates have become prohibitively expensive — or outright unavailable — in parts of California due to climate risks.

Insurance challenges are dragging down home prices in some areas and have been blamed for derailing deals in others, as transaction cancellations tied to insurance concerns nearly doubled between 2023 and 2024. 

Investor activity and opportunities for rebuilding

Even amid stories of resilience and determination in communities like Altadena, some residents have decided they simply can't rebuild and are instead looking to buy nearby or leave entirely.

Many of those sellers are elderly or underinsured and don't have the funds to rebuild, leaving them with few options, according to a Dec. 30 Redfin analysis. "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," Redfin Premier agent Sylva Khayalian said in the report.

This is where investors are stepping in.

In the third quarter of 2025, investors bought roughly 40% of the vacant lots that sold in the Pacific Palisades, Altadena and Malibu areas — and about 80% of those lots previously had a home, according to Redfin researchers.

Despite the investor interest, vacant lots are piling up faster than they're being absorbed. While only seven lots were listed in the Pacific Palisades neighborhood from September through November 2024, 309 lots were listed during the same stretch of time in 2025. Altadena similarly saw a year-over-year jump from two to 225, while the number of lot listings in Malibu jumped from 125 to 214.

As the one-year anniversary of the fires approaches, the area is facing a slow, uneven recovery timeline, with more vacant lots sitting unsold and taking price cuts. Meanwhile, outside capital is poised to change who returns and what ultimately will be built.