Living through the LA wildfires has left countless individuals displaced. Now, confronting skyrocketing rent prices, the search for affordable housing becomes their foremost struggle.
"We've been living without a kitchen for a year and a half now," Johnson shared, co-owner of LA Woodshop, a place that offers woodworking spaces and lessons for DIY enthusiasts or professional furniture makers. "We spent countless nights sanding doors and window frames by hand," Chapman added. "The floors took us 18 long months to finish. Just when we were weeks away from turning this house into a piece of art, it's all gone."
Dealing with this financial and emotional loss isn't simple enough, not with the already challenging and expensive housing market in Southern California. The recent wildfires, displacing thousands of families, might only make things worse.
They've been staying with friends, struggling with stress and sleepless nights as a consequence of Chapman's anxiety. "We'll find something," Johnson remained hopeful. "But we can't be too selective. We couldn't be even before the 10,000 houses burned down."
Real estate agents and economists suggest that the surge in demand from displaced residents, coupled with the drop in available homes, is expected to skyrocket housing prices in the coming months and years.
"We were already in a housing crisis," stated Los Angeles real estate agent Brita Kleingartner. "Now the overwhelming demand and the limited supply is painting a clear picture that we haven't seen before. Our agents have been inundated, most of the showings are for families who have lost everything."
Real estate agents are reporting 12-to-14-hour workdays due to the influx of home searches. "There are basically no rentals," Jade Mills, a Beverly Hills realtor with Coldwell Banker, confessed. "The prices are going up sharply. It's getting pretty crazy."
Restoring the city's lost housing stock is estimated to take at least 3 to 5 years due to the time required for cleaning up burned homes, settling insurance claims, navigating the permitting process, and securing labor for rebuilding. Jeremiah Vancans, another Los Angeles real estate agent, is concerned about predatory buyers seeking to take advantage of financial misfortune.
The housing shortage was already severe, with data from the California Association of Realtors revealing less than 1% of homes sold in a county of 3.7 million households. The estimated 10,000 homes that have been lost to the fires have made the housing market even more challenging.
Real estate agent Brock Harris, who has been trying to help displaced families, noted that this situation will make bidding wars for available properties even higher. "The price increase is simply shocking," he explained.
The Redfin study, which analyzed historic wildfires, suggests that the average property prices may drop initially due to discounted fire-damaged properties or lots needing to be cleared. However, this decline does not last. Daryl Fairweather, Redfin's chief economist, stated, "California is facing an acute housing shortage. The wildfires themselves are making housing more expensive. After a town burns, builders come in and construct new homes, which are typically more expensive."
The situation has triggered a strong response from the real estate community, with property owners converting Airbnbs into long-term rentals and offering their empty homes for rent. Joe Thompson, who was fortunate enough to escape his home with minimal damage, found that prices for rentals were sharply rising in the aftermath of the wildfires. "We're basically at the mercy of property owners," he shared. "The only way to secure a place to live is to put up 12 months of rent upfront."
The challenging and expensive housing market in Southern California is only exacerbated by this situation. Johnson and Chapman now need to find a new property, but they can't be too selective due to the limited supply.
Real estate agents are working longer hours due to the surge in demand for housing, leading to sharp price increases.
