On the first anniversary of the Pacific Palisades and Malibu wildfires, vacant land is piling up across some of Los Angeles’ most heavily damaged neighborhoods, even as investors account for a growing share of the limited transactions taking place.
Real estate investors made up roughly 40% of vacant-lot buyers in several fire-impacted ZIP codes during the third quarter, according to a new report from Redfin Corp. The surge in investor activity comes as thousands of displaced homeowners continue to weigh whether to rebuild, sell or leave altogether, with reconstruction slowed by permitting delays, insurance disputes and rising costs nearly a year after the January 2025 blazes.
In Pacific Palisades (ZIP code 90272), investors purchased 48 of the 119 lots that sold, or 40.3% of transactions. A year earlier, there had been no land sales in the area. In Altadena (91001), investors bought 27 of 61 lots, representing 44.3% of sales, also compared with zero transactions a year earlier. Malibu (90265) followed a similar pattern, with investors acquiring 19 of the 43 lots sold, or 44.2%–more than double their share from the prior year.
The data highlight a widening gap between buyers with access to capital and residents still struggling to recover from one of California’s most destructive wildfire seasons.
“In Altadena, there’s a real push around the idea that the community is not for sale,” said Sylva Khayalian, a Redfin Premier agent who works in the area. “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.”
Many of the homes destroyed in Altadena were built in the 1940s and 1950s. Khayalian said investors are frequently making low offers on cleared parcels with plans to build new homes and resell them. While some homeowners have rejected those bids, others–particularly elderly residents or those who were underinsured–have opted to sell because they lack the funds to rebuild.
The rebuilding process has been slow. Many homeowners have waited months for permits, though Khayalian said construction activity has begun to increase in recent weeks. In the meantime, displaced residents are split between temporary rentals nearby and permanent moves out of the area.
In wealthier Pacific Palisades, the response has been markedly different. Some homeowners whose properties burned have bought replacement homes while deciding whether to rebuild, said Justin Vold, another Redfin Premier agent. One client purchased a $3.75 million home near Santa Monica and plans to work with a prominent architect to reconstruct their Palisades house. Another client whose Malibu home was destroyed bought a $4.68 million house in Pacific Palisades that survived the fires but carries landslide risk.
Vold expects more inventory to come onto the market as insurance coverage for temporary housing expires and more residents abandon plans to rebuild. “If more people decide against rebuilding,” he said, “the pileup of vacant lots will continue to grow.”
Listings Surge, Sales Lag
Despite increased investor interest, supply has far outstripped demand. Across all three ZIP codes analyzed by Redfin, listings of vacant lots and single-family homes have surged, while sales remain relatively thin.
In Pacific Palisades, 309 vacant lots were listed in the three months ending Nov. 30, up from just seven a year earlier. Altadena recorded 225 lot listings, up from two, while Malibu listings rose to 214 from 125.
With so much land sitting unsold, sellers are beginning to cut prices. In Altadena, many lots are selling in the $500,000 to $600,000 range–roughly half of what the properties might have commanded had homes remained intact, Khayalian said.
Redfin data show the median vacant lot sold for $510,000 in Altadena during the three months ending Nov. 30. In Pacific Palisades, the median price was $1.6 million, while in Malibu it was $1.3 million.
Valuations remain challenging in some fire-damaged areas, said Carlos Castillo, a Redfin Premier agent, citing limited transaction volume and damaged or incomplete infrastructure. “With so little turnover and so much uncertainty around rebuilding, it’s hard for buyers and sellers to agree on what these properties are really worth,” he said.
Home Sales Recover Slightly, but Lag Pre-Fire Levels
Single-family home sales have ticked up from the immediate aftermath of the fires but remain below pre-fire levels. Pacific Palisades recorded 31 home sales in the three months ending Nov. 30, up from a record low of six in the quarter following the fires, but down from 45 a year earlier. Altadena saw 58 home sales, up from 26 in the immediate post-fire period but below the 67 recorded a year earlier.
By contrast, vacant-lot sales now outnumber home sales in both communities–a reversal from pre-fire conditions. Pacific Palisades logged 107 lot sales during the same three-month period, up from zero a year earlier. Altadena recorded 80, also up from zero, while Malibu lot sales rose to 37 from 12.
Homes that didn’t burn are attracting buyers only if they are priced competitively and have been remediated for ash and smoke damage, Khayalian said. Insurance has become a central concern. California mortgage lenders require fire coverage, and premiums have risen 35% to 50% since the fires.
Khayalian experienced the costs firsthand. One wall of her home burned, and while neighbors prevented the fire from spreading, cleanup and repairs ran into the hundreds of thousands of dollars. Ash and smoke remediation cost nearly $70,000 and was covered by insurance, but lead exposure cleanup totaled $160,000–an expense she is still disputing with her insurer. Repairs to the damaged wall and landscaping work after heavy rains added tens of thousands more.
“The cost of cleaning up smoke and ash damage can be so exorbitant,” she said, “that some homeowners are morbidly joking it might have been easier if their house had just burned down.”
For now, the imbalance between listings and sales suggests rebuilding in Los Angeles’ fire-scarred neighborhoods will take years, leaving investors, homeowners and communities navigating a prolonged period of uncertainty.
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