The Aftermath of Recent Wildfires in California: A Real Estate Perspective Recent weeks have brought devastation to Los Angeles County, with wildfires destroying an estimated 12,000 structures. This tragedy has created significant challenges for affected residents as they navigate their next steps. The real estate market in California is poised to undergo notable changes as a result of this crisis. Current Housing Inventory I drew a map from Long Beach up to Claremont, over to Santa Clarita, and down to Camarillo, and here is what I found: 5,094 single-family residences are available. 2,739 townhouses and condos are available. 2,063 multifamily homes, mostly filled with renters. 37,000 rental units on the market, of which only 4,700 are single-family rentals. This inventory will undoubtedly play a critical role in absorbing those displaced by the fires, but I don’t see that being enough. Immediate Housing Challenges With thousands of families suddenly displaced, the demand for temporary or permanent housing will surge. While some families may opt to stay with relatives for six months to a year or longer, others will: Move out of the area entirely. Purchase homes from the existing inventory. Rent or purchase while rebuilding. Wait for reconstruction to progress before making a decision. Drawing parallels to the Camp Fire 2018 in Paradise, where 18,804 homes were lost, can provide insight. Reconstruction in that region has progressed at a rate of approximately 600 homes per year, meaning a complete rebuild could take 30 years. Even if the rebuilding pace doubles in Los Angeles County, restoring 12,000 homes would take a decade. Real Estate Impacts This situation is likely to ripple across the real estate market: Increased Mobility: Families will look for homes close to their previous neighborhoods to keep children in the same schools or reduce commute times. Others may move closer to work or family, potentially relocating out of state. Demand for Rentals: With limited single-family rentals available, competition for these homes will be fierce. Additionally, we are already hearing reports that rents in areas close to the fires have risen dramatically overnight. This trend highlights the strain on the rental market and the potential for continued rent increases. Boost in Sales Activity: Some displaced residents may decide to purchase from the current inventory, driving sales across various markets. This competitive market environment on both the renting and sale sides is likely to persist for years to come, pushing prices higher for both housing and rentals. Restructuring Goals: The fires may allow many to reevaluate financial goals. Downsizing could lead to a more sustainable financial future for some families. Many of us have too much equity tied up in our primary residence, and buying a smaller house may allow some to invest in more liquid investments like stocks or investment properties. Financial Support for Fire Victims Specialized 0% down loan programs for fire victims, whether owned or rented, are available for up to $1,209,750. While this is a generous resource, the reality is that many homes in the affected areas exceed this price range. A Helping Hand While our company may not have a strong presence in the hardest-hit areas, we’re here to assist those navigating this difficult time. Whether it’s helping to evaluate financial situations, exploring loan options, or planning the following steps, we’re ready to provide guidance. Though we may see only a trickle of new clients moving into our region, the broader real estate market is likely to experience significant activity as families adjust to their new realities. Quick Story from the 1994 Earthquake You look at the devastation and destruction and wonder how everything will be OK! The Government will step in and help out where it is needed. People did not have earthquake insurance in 1994, and SBA stepped up and gave low-interest loans. Sometimes, they pay people 5% interest rate mortgages down to 1% so they can have the same payment with a larger loan amount. The Government doesn’t work fast, so tell your people to hold on and see what will be offered. Please tell your clients/ friends not to listen to people trying to buy their burnt-down houses and do them a “favor.” Let this settle, and determine the best action plan for the victims! Conclusion The road to recovery will be long and complex. However, these challenges also present opportunities for growth and resilience. Whether families choose to rebuild, relocate, or restructure their lives, this period will undoubtedly reshape the real estate landscape in California. For those affected, taking the time to evaluate their options and plan carefully will be key to moving forward. My thoughts and prayers go out to all of the victims and their families. I am here if you have any questions or want to discuss anything related to mortgages, real estate, or the Los Angeles Rams! I am here for all of your lending needs. Please let me know if you have any questions or if a client needs tremendous guidance. I’m just a call, text, or email away. 📞 Cell: 661-714-6258 TEXT: 661-714-6258 📞 Office: 661-260-2970 ext. 2222 📞 Direct Line: 661-291-2222 📧 Email: Mike@AugustaFinancial.com Let’s start cranking up the 2025 machine to sell real estate and get the distractions behind us! But wait, there’s more… Interest Rates Rates are slightly better today, but bond traders have all their eyes on the CPI, which will come out tomorrow. LOW CPI!!! LOW CPI!!! PLEASE!!!!! We offer 12-day escrows for pre-approved buyers - Conventional/FHA/Jumbo/Bridge loans. We provide loans in all states, so call me with anything you need. Government Loans (FHA/VA/USDA) are in the 6s. Conventional loans up to $806,500 are in the 6s and 7s. High Balance Loans from $806,501 to $1,209,750 are also in the 7’s. Jumbo loans above $1,209,750 are in the 7’s. Bank statement loans are available with 10% down again, with larger down payments in the 7’s. Profit and Loss Statement loans require 20% down - no bank statements needed, only a profit and loss statement! 0 down loans are available in the high 6s, with a minimum credit score of 620, up to $1,300,000. Private Money lenders offer Hard Money Loans with 35% down. No Ratio Loans require 30% down. DSCR (Debt Service Coverage Ratio) loans are available with as little as 15% down. Bridge Loans typically have an interest rate of 7.99% with limited fees, helping you get where you need to go! 3/2/1 Buydowns, 2/1 Buydowns, and 1/0 Buydowns are available at great starting rates! Please note that interest rates are subject to change without notice, and the information above reflects LA County Loan Limits. **Good News for Condos:** Nothing new to report. **Bad News for Condos:** Nothing new today. For all other issues involving condos, please check MikeMeena.com. I will post updates here, but all the information on the naughty list is available on my website. Just go there and click about to find our most updated list. Let me know if you hear anything new about condos or townhouses. I am available every day if you need anything. 📞 Cell: 661-714-6258 TEXT: 661-714-6258 📞 Office: 661-260-2970 ext. 2222 📞 Direct Line: 661-291-2222 📧 Email: Mike@AugustaFinancial.com Have a great day, and an even better tomorrow! Please call me when you have a client who needs to borrow! Mike Meena President | Loan Officer Click to Call or Text: (661) 714-6258 This entry has 0 replies Comments are closed.