HousingWireHousingWire
As Los Angeles County continues to pick up the pieces from the devastation caused by the Palisades and Eaton wildfires, some in the community are losing patience with what had previously been a quirk of the sought-after housing market: unscathed homes in impacted areas sitting vacant, owned by foreign nationals thousands of miles away.
According to a report from the Wall Street Journal, certain community members are calling foul on the high-priced homes sitting empty in the areas in which residents are desperately seeking housing, and real estate agents are some of the loudest people bringing attention to the issue.
“Why are there vacant houses here?” said Ashleigh Rader, an agent with Compass based in Pasadena. “When there’s not enough housing, we need homes to be viewed as shelter rather than an asset or an investment strategy.”
A particular source of consternation are homes that have owners who, in some cases, live thousands of miles away from them. Many of these owners are Chinese nationals, according to the Journal.
“For years, wealthy international buyers have bought high-end homes in the U.S. as offshore investments,” the report said. “Buyers from China often led the way. Many flocked to Los Angeles, though their appetite started to dry up in 2018 after Beijing implemented new currency controls.”
There are still a fair amount of vacant homes in the impacted areas owned more locally, however. Some may have inherited the homes and are not yet sure what to do with them, while others are keeping them off the market as second homes, the report said.
But a drop in home prices following the 2007-08 financial crisis led to an influx of foreign buyers in hotter real estate markets across the country, including Los Angeles. According to data from the U.S. Census Bureau’s 2023 American Community Survey (ACS), roughly 6.1% — or around 225,000 housing units — were vacant when that survey was being conducted.
About 33,000 of those units were being used for other purposes including “seasonal, recreational or occasional use,” the Journal said.
But Los Angeles County’s vacancy rate is also quite low based on national averages, and some displaced residents see their unavailability as a compounding factor in an area already facing a housing shortage.
An official with the California Association of Realtors (CAR) estimated that roughly 150,000 single-family homes are owned by foreign buyers based on the organization’s surveys, and that around 27,000 of them could be considered investment properties.
Some local politicians are urging these owners to put the homes on the market to try and make them accessible to people continuing to seek housing.
