The Impact of Recent Wildfires on Construction and the Real Estate Market

Wildfires aren’t new to Los Angeles, but they have been more devastating over the past several months. Examining the aftermath of these incidents is vital. Whether you own property in the region or plan to build a custom home in L.A., it’s important to know how the fires have affected the market.

Wildfires and New Home Builds

As wildfires spread throughout the region, the loss of so many homes begins to affect the construction industry more and more. Here’s an overview of some of the recent changes to the industry.

More Demand for Custom Homes

Property owners in every budget range need new homes built to replace the properties they’ve lost. This has led to an increased demand for construction. Finding a new home contractor in Los Angeles with sufficient availability can pose a problem, forcing property owners to book consultations with builders many months in advance.

Supply Chain Issues

As more property owners begin new home constructions, material suppliers also experience increased demand, often resulting in delays in the supply chain. Property owners should plan for their projects to take longer to complete.

Higher Construction Costs

Property owners should also expect to pay more to complete their projects. The spike in demand has prompted builders to charge more for their services. In addition to the natural inflation wildfires cause, material suppliers have also raised their prices.

Real Estate and the L.A. Wildfires

The resale market in Los Angeles faces similar impacts in the aftermath of the wildfires. Potential home buyers can prepare by anticipating these changes in the market.

Lower Resale Home Inventories

Following widespread wildfires, there are far fewer homes in the area. Additionally, many home sellers have to spend time repairing their properties before entering the market. As a result, there are fewer homes to go around.

Elevated Home Prices

Turning to a new home contractor in Los Angeles is an option many buyers might consider. However, home prices in L.A. have always been higher than the national average. The lower inventory and higher demand will almost certainly drive those prices up further.

Rental Rate Hikes

Finally, rental rates will rise alongside home prices. Since there are fewer resale homes on the market, prospective buyers will likely rent for longer periods. California residents who have lost their homes may also turn to temporary rentals. 

Work With an Experienced New Home Contractor in Los Angeles

Advanced Builders & Contractors builds custom homes in the Los Angeles area. We can design and build a home that you’ll be proud to own for decades. Contact us today to discuss your project!