As far as the rebuilding goes, I know a few people who are getting a clear picture of their situation. It’s probably too early to make any generalizations, but it’s looking like most owners were underinsured—at least to rebuild.
New construction in the state costs between $400 and $600 per square foot. That’s a million dollars to rebuild your average house—most policies will not cover that.
Who is to say what will happen, and what kind of government support will be provided, but here's my prediction.
One third of the lots will not get rebuilt, at least any time soon. Free-and-clear vacant lots can sit empty for decades. Owners see them as money in the bank, and they cost nothing to own.
Another third will sell - we are are already hearing about offers and deals getting made on vacant lots. (Note: DO NOT SELL YOUR LOT - more on that coming next week).
Some will sell to their neighbors. Rumor has it David Caruso is making offers to commercial owners to rebuild his Palisades Village even bigger. And some owners will simply walk - the lots will go to banks and be sold as foreclosures.
And a third will manage to rebuild. I hope more.
So that leaves most of the displaced Angelenos looking for a new house. At this point, we're seeing those displaced primarily (and frantically) looking for rentals. Very few people lost their house and are suddenly looking to buy, at least not on this side of town.
But I imagine that will change as people start to make their long-term plans, and a real estate market surge will predictably emerge in late-spring/summer.
