The Los Angeles wildfires are amplifying many of the usual steep challenges for those who want to build or buy new homes in the region.
January’s firestorm destroyed or damaged more than 12,000 structures around Altadena and Pacific Palisades. To gauge how that changes the real estate game for local homebuilders and their customers, we chatted with Richard Douglass, president of Trumark Homes’ Southern California division.
His instant analysis acknowledged the vast uncertainties: “It depends,” he said. It’s an unprecedented unknown.”
The big wildcard within Douglass’ thoughts is how fast reconstruction goes.
Suppose the push to rebuild quickly is successful.
In that case, that building boom will create one major headache for anybody trying to develop housing – whether it’s replacing fire-damaged property or any new construction. Southern California finished 2024 with construction staffing just below its all-time high.
“There’s not enough labor,” he says. “We would not have enough people to build.”
Conversely, imagine the construction landscape if bureaucratic delays seriously stall reconstruction. The already stiff competition among house hunters seeking newly built homes will be expanded by fire victims who opt not to wait for plan approvals.
Trumark had 1,000 visitors in Chino Hills for its January grand opening of the Shady View neighborhood, where prices start at $1.4 million. The builder, which this year will debut nine other Southern California projects – from north San Diego to Covina and Orange County – has already sold 67 of Shady View’s 159 single-family houses.
Yet Douglass warns that a lethargic fire reconstruction doesn’t mean everything built by homebuilders will be an easy sell.
Great locations will sell briskly, but ”if you drive 2 miles and have a product with competition then I’m in a dogfight.”
Douglass’s three-plus decades in the local homebuilding game make him a bit jaded. He thinks slow reconstruction is the most likely outcome, with bureaucracy a repeated hindrance.
“Construction is the easy part. All the stuff before that is the hard stuff,” he says. “We’re making this way too hard.”
Small focus?
Trumark navigates the local construction maze by concentrating on smaller projects.
That doesn’t necessarily mean simpler.
Last year, the company completed sales at two unusual projects: the 132-townhome community surrounding the old Covina Bowl bowling lanes and the 91-townhome Saddleback Place in Mission Viejo, built on a steep hillside.
Trumark also finished selling two more traditional sites: its 301-home Melrose Heights neighborhood in Oceanside and the 73-home Dahlia project at Rancho Mission Viejo’s Rienda master-planned community.
All told, the company closed 387 sales in the region last year after selling 421 in 2023. It finished 2024 with no unsold finished homes.
What’s next?
The wildfires are not the only variable twisting the outlook for 2025.
Still, Douglass says any forecast is a “mosaic” of factors, from the direction of mortgage rates to the region’s overall economic progress to what other builders will construct.
“It depends on where you go. Good locations with good product will see lots of demand,” he said. “But acute affordability is the big issue.”
And then there’s the hardest thing to predict: shoppers’ anxieties. California consumer confidence is near a four-year low.
“I’m concerned about buyer psychology,” he said. “Sometimes it’s more important than fundamentals. When people pause, that’s a problem.”
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com