LA's home market hits fresh insanity

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A smoke-blackened shell of a home with a gaping hole in the roof just sold for more than $1 million in California’s latest jaw-dropping housing market absurdity.

The burned-out, boarded-up house in Torrance fetched the eye-popping price last week despite sitting unlivable on a busy corner lot after a devastating fire ripped through the property last year, according to The Independent.

The three-bedroom, two-bath ranch-style home sold for 2% above its asking price.

“It’s a nice part of Torrance,” NDA Real Estate chief financial officer Rhett Winchell, who handled an earlier auction of the property, told the outlet. “We had a tremendous amount of interest in the property.”

The 1,140-square-foot home has sat vacant since flames broke out inside around 4 a.m. on Feb. 1, 2024, according to a Los Angeles Times report.

The property was reportedly “dangerously cluttered,” and investigators believe the blaze started after a heating grate in the floor ignited nearby material. An older man, the only person inside, escaped through an open window.

He survived the fire but later died, leading to the home being sold at a probate auction last year.

Winchell said the winning bid at that auction reached $980,000, while the added selling costs pushed the total to roughly $1.075 million.

The unidentified buyer flipped the charred property on May 11.

While the plan for the lot remains unknown, Winchell explained the staggering sale price was not unusual for the area.

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The home “sold for the land value” last year, he said, adding that comparable homes nearby in “move-in condition” regularly fetch around $1.5 million.

The wild sale highlights what the California Legislative Analyst’s Office has described as a “serious housing shortage” that has caused housing costs to keep “rising rapidly for decades.”

California Governor Gavin Newsom has signed several bills aimed at boosting the state’s housing stock, including measures that fueled a surge in accessory dwelling units built on existing residential properties.

But experts say California’s housing crisis remains deeply entrenched.

Research from the American Enterprise Institute estimates the state needs roughly 2.2 million additional housing units — nearly 15% of the current supply — to meet demand.

Eric McGhee, policy director and senior fellow at the Public Policy Institute of California, said laws involving accessory dwelling units were “probably the best of the reforms,” with those projects now accounting for about 20% of residential construction statewide.

But whether they are actually easing the shortage remains unclear.

“We don’t know what those are actually being used for,” McGhee said, suggesting some are becoming home offices, “man caves,” and short-term vacation rentals instead of long-term housing.

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