We are approaching the one year mark since the devastating Woolsey Fire. The scars on the hillsides have faded, but the destruction on many properties and lives is still very much present.
The properties that suffered a total loss or partial damage have been granted the right to an expedited permitting process. This process greatly reduces the amount of red tape to obtain building permits, and owners are allowed to rebuild within the same footprint plus an added ten percent. We have heard that this expedited process takes around 6 months to a year. Only 18 of these fire rebuild permits have been issued as of September 25, 2019. For updated stats, click here.
To Stay or Sell
Many friends, clients, and victims of the fire have reached out for our opinion regarding whether they should rebuild or sell the lot and move on. This is not a simple answer, and the factors of insurance claims, lot size, location, and previous construction all play a huge part.
That said, here are our general thoughts for those in this predicament. If you are weighing your options, please reach out to us for a detailed analysis and we are happy to advise you.
Lot Value
Every lot in Malibu is unique. Obvious factors to consider include accessibility, views, usable land, privacy, utilities, and neighborhood. Lots on Point Dume and some in Malibu West enjoy deeded beach rights, which greatly increases their value.
Of the burnout properties listed for sale thus far, the most valuable have been in Point Dume, Malibu Park, and Encinal Canyon Two contiguous lots on Greenwater Road sold in August for a combined total of $3.6 million in August. Other notable sales include three sales on Cuthbert Road in Malibu Park, priced at $2 million, $1.65 million, and $1.2 million.
Market Pressure
The rights to the expedited permitting process have made burnout lots much more desirable than raw land to the average buyer. As of late September, there are currently over 25 burnout lots listed for sale, ranging from $350,000 to $2.6 million.
This slow but steady influx has caused downward pressure on pricing. For property owners who decide to sell, positioning the lot’s price, image, and opportunity are key. The dreary alternative is listing at an unrealistic price and slowly following the market downwards.
Listing a Burnout Lot
Our team has transacted over $5 million of fire-affected properties and lots in 2019 and currently represent another $2 million in listed burnout land. Here is our best advice to those who are considering selling a burnout property:
- Complete debris clearance and obtain a debris removal final signify form. This provides a clean slate for a buyer.
- If the foundation, septic system, or any structural elements survived, this will be a significant value add to a buyer. Have them all inspected and make the reports available upon serious inquiries.
- Consider completing, or at least beginning, the permitting process. Delivering the lot with permits represents a significant increase in value. If you decide to go down this path, it is important to work with a great architect who will design a home that has a wide-ranging appeal.
- Have stunning visuals that portray the properties true potential. When you work with the right real estate representation, this is all taken care of. Waiting for the right weather to highlight a property’s attributes, using a great photographer, and adding graphic design elements all help to engage potential buyers online and stand above similar listings.
- Price well. Depending on your goals and timeline, sellers can look for the high-mark price or create excitement with a lower and more compelling number. There are two means of finding a general price range. The first would be looking at comparable properties and considering what is active, pending, and sold. The second is by considering construction costs, the margin most buyers will find appealing, and finally the likely value of the lot. Both of these methods should be discussed with experienced and well-versed representation.
We Can Help
Our team would love nothing more than to see every victim of the Woolsey Fire rebuild and stay within the community. However, the unfortunate reality is that for some, the most sensible course of action is to sell and move on.
For those considering selling, please feel free to reach out to our team for a property evaluation and market overview. As one of Malibu’s top-producing real estate teams and lifelong residents of this coastline, we are honored to help anyone and every one however we can.
To contact our team, please email russellandtony@compass.com or call our office at 310.230.5771.
–
*The statistics and data cited in this blog post are current as of September 30th, 2019. These have been sourced from the MLS and do not include any off-market transactions. For an up-to-date burnout land market analysis, please contact our team.
