Should I Rebuild or Sell My Burned Altadena Lot? (2025 Guide)
⚠️ LEGAL & TAX DISCLAIMER
This content is for informational purposes only and does not constitute legal, tax, or financial advice. Prop 19 disaster rules, IRC §1033 deferrals, and rebuild decisions have specific requirements and timelines that vary by individual circumstances. Consult with a qualified CPA, tax attorney, real estate attorney, and financial advisor for advice specific to your situation. Building codes and permit requirements may change; verify current requirements with LA County Building & Safety before making decisions.
Short answer: If you plan to stay in Altadena long-term and can manage a 12–24-month project, rebuilding often preserves more wealth through Prop 19 base-transfer and potential §1033 deferral. If you need quick liquidity or prefer not to manage construction, selling the cleared lot offers speed and lower risk.
Quick Comparison (source-verified ranges)
| Decision Factor | Rebuild & Retain | Sell the Cleared Lot |
|---|---|---|
| Typical land pricing signal (2025) | — | Altadena fire lots have drawn multiple offers and some over-ask results. (Use your MLS median below.) |
| Your MLS median lot price | — | [Client MLS: $515,000 median – confirm month] |
| Median lot size | — | [Client MLS: 7,811 sq ft median] |
| Rebuild hard cost (structure only) | Plan for $300–$800+ / sf; wildfire rebuild quotes in Altadena commonly land mid-to-high end. | — |
| Owner reports (recent articles) | Owners in Altadena reported ~$570 per sf rebuild cost; LAist survey showed average contractor quotes around $928k for typical homes. | — |
| Permits / approvals | Inside the post-fire expedited district, plan approval averages ≈ 69 days (total project ≈ 12–24+ months with design, bids, utilities, construction). | — |
| Code requirements (current policy) | Sprinklers required. Solar and battery systems not required for fire rebuilds; homes must be solar-ready. | — |
| Carrying / soft costs | LA County examples: ≈ $12k (1,500 sf) to $22k (3,000 sf) for plan-check and permits + Fire Dept review fees. | — |
| Taxes & deferrals | Prop 19 disaster rules allow base-year value transfer; potential §1033 gain deferral on involuntary conversions (timelines apply). | Land sale is simpler but can trigger taxes unless planned with §1033 or other strategies. |
| Time to outcome | ≈ 12–24+ months end-to-end; varies by scope and utilities. | Post-cleanup list-to-close can be fast given lot demand, but market varies. |
| Risk profile | High (budget creep, timeline risk) | Low–moderate (pricing and offer risk only) |
💡 FREE TOOL: Want to run your specific numbers? Our Altadena Lot Value Calculator analyzes your property's rebuild vs. sell financials in under 2 minutes—including Prop 19 tax savings, insurance gaps, and net proceeds comparison. Request free access →
📧 Email: justin@theborgesrealestateteam.com
Plain-English Guidance
Rebuild if you'll occupy the home, want to stay rooted in Altadena, and can carry a 12–24-month project with a 10–15% contingency. Costs span $300–$800+ per square foot and often run higher after wildfire damage.
Important tax context: Prop 19 (officially Proposition 19, passed in 2020) allows disaster victims to transfer their pre-fire property tax base to their rebuilt home, preserving significant property tax savings. IRC §1033 is a federal tax code provision that lets you defer capital gains taxes on insurance proceeds if you reinvest in replacement property within 2–3 years of receiving the proceeds. Both have strict timelines—work with your CPA from day one. For detailed tax planning strategies, see our Prop 19 & Fire Recovery Tax Guide.
Sell if you need speed, prefer to avoid construction management, or face an insurance gap. Recent coverage from LAist and local MLS data shows multiple offers and over-ask sales on cleared Altadena lots, indicating strong demand.
Reality check on costs: Local owners report ≈ $570 per sf average rebuild, and a LAist survey found contractor bids around $928k for typical homes—anchor your budget on current quotes, not old rules of thumb.
5-Step Decision Process: Rebuild or Sell?
Step 1: Calculate Your True Rebuild Budget
- Get 3+ contractor bids expecting $300–800/sf in Altadena (wildfire rebuilds often hit the higher end)
- Add 10–15% contingency for unknowns, change orders, and material price fluctuations
- Include soft costs: permits (~$12–22k depending on home size), architectural design, structural engineering, soils reports, temporary housing
- Total realistic timeline: 12–24+ months from design to move-in
Budget Reality: If contractors quote $600/sf for a 2,000 sf home, your construction cost is $1.2M. Add $150k for soft costs and contingency. Total: $1.35M project budget.
Step 2: Assess Your Insurance Position
- Review your settlement amount vs your rebuild budget from Step 1
- Identify coverage gaps (many policies cap at actual cash value or have sub-limits)
- Understand your §1033 timeline if you received proceeds—typically 2–3 years to reinvest
- Document everything for potential disputes or supplemental claims
Coverage Gap Example: If your settlement is $850k but rebuild costs $1.35M, you have a $500k gap to fund out-of-pocket or through financing.
Step 3: Evaluate Your Timeframe & Capacity
- Can you manage an 18–24 month project? Including contractor selection, design decisions, inspections, and punch lists
- Do you need housing liquidity sooner? Selling provides funds in 30–90 days vs 18+ months
- What are your carrying costs during construction? Property taxes, loan interest, insurance, utilities
- Do you have project management capacity or budget to hire an owner's representative?
Timeline Breakdown:
- Design & engineering: 2–4 months
- Plan check (expedited): ~69 days
- Contractor bidding: 1–2 months
- Construction: 8–14 months
- Inspections & close-out: 1–2 months
Step 4: Analyze Tax Implications with Your CPA
- Prop 19 base-year transfer: Allows you to keep your pre-fire property tax base (potentially saving $5,000–15,000+/year)
- IRC §1033 gain deferral: Defers capital gains on insurance proceeds if you rebuild within the timeline
- Cost basis considerations: Your new rebuild cost becomes your basis for future sale calculations
- Compare scenarios: Rebuild and retain vs sell the lot and buy elsewhere
Tax Savings Example: If your pre-fire assessed value was $400k and market value is $1.5M, Prop 19 keeps you at the $400k base (~$4,000/year taxes) instead of $1.5M base (~$15,000/year). That's $11k/year in savings.
Step 5: Check Current Market Conditions
- Review recent Altadena lot sales through your agent's MLS access
- Get multiple offers if considering selling (recent reports show competitive bidding on fire lots)
- Run the math: Projected home value after rebuild minus total costs vs net proceeds from selling lot today
- Consider appreciation potential: Rebuilt homes in recovered fire zones often appreciate once neighborhood stabilizes
Final Calculation:
- Rebuild path: $1.35M total investment → $1.6M completed value = $250k equity gain + Prop 19 savings
- Sale path: $515k lot sale → reinvest elsewhere, but lose Prop 19 benefit and neighborhood roots
🎯 DECISION TOOL: Not sure which path makes financial sense for your specific property? Use our Altadena Lot Value Calculator to compare rebuild vs. sell with your actual numbers—insurance proceeds, lot value, rebuild quotes, and Prop 19 tax savings. Takes 2 minutes. Request free access →
Quick Decision Framework
Start Here: What's your priority? ├─ I need liquidity fast (< 6 months) │ └─ → Sell the cleared lot │ └─ Expected outcome: Close in 30–90 days, │ receive $450–600k range (market dependent) │ ├─ I want to stay in Altadena long-term │ │ │ ├─ Can you manage an 18-month project? │ │ ├─ YES → Check insurance coverage │ │ │ ├─ Full coverage → Strong rebuild candidate │ │ │ └─ Coverage gap → Get 3 GC bids, then decide │ │ │ │ │ └─ NO → Consider selling or hiring owner's rep │ │ │ └─ Do you have $100–300k liquid for gaps/overruns? │ ├─ YES → Rebuild makes financial sense │ └─ NO → Run detailed numbers with CPA first │ └─ Uncertain about staying in the area └─ → Lean toward selling to avoid 18-month commitment
5 Costly Mistakes Altadena Rebuild Owners Make
Mistake #1: Underestimating Soft Costs
Many owners budget only for construction ($300–800/sf) but forget permits ($12–22k), engineering, plan check fees, architectural design, temporary housing, and carrying costs. Soft costs typically add 15–20% to your total project budget. A $900k construction bid becomes a $1.05–1.08M total project.
What to include: Architectural design (3–8% of construction cost), structural engineering ($5–15k), soils/geology reports ($3–8k), permit fees, utility connection fees, temporary housing, storage, and a 10% contingency for unknowns.
Mistake #2: Not Getting 3+ Contractor Bids
Post-fire demand means contractors can charge premiums and may be overbooked. One Altadena owner got bids ranging from $420/sf to $740/sf for the same home design—a $640k difference on a 2,000 sf home. Always get at least three detailed, itemized bids from licensed contractors with wildfire rebuild experience.
Red flags: Bids that seem too good to be true, contractors who won't provide references, lack of proper licensing (check CSLB.ca.gov), or pressure to sign before you're ready.
Mistake #3: Missing Tax Deferral Deadlines
IRC §1033 has strict timelines—typically 2–3 years from when you receive insurance proceeds. Missing the deadline means paying capital gains taxes on your insurance payout (potentially 20–25% of the gain). Mark your calendar and work with your CPA from day one.
Timeline example: If you received $800k insurance proceeds on March 15, 2025, you typically must purchase or rebuild replacement property by March 15, 2027–2028 (depending on structure). Miss it, and you could owe $50–150k+ in taxes.
Mistake #4: Ignoring New Code Requirements
Your old home didn't need sprinklers; your rebuild does. Wildfire rebuilds also require enhanced roof assemblies, ember-resistant vents, defensible space clearance, and solar-ready electrical panels. Budget for code upgrades that didn't exist when your original home was built—these can add $30–80k to your project.
2025 Altadena requirements: Fire sprinklers (add $8–15k), Class A roof assembly, ignition-resistant construction within 5 feet of home, solar-ready panel and conduit (even though panels aren't required for rebuilds), and enhanced attic ventilation. For more on navigating the permit process, see our Altadena Permit Timeline Guide and Working with Contractors After Fire.
Mistake #5: Emotional Decision Without Running the Numbers
Rebuilding for sentimental reasons is valid—staying in your neighborhood, near your kids' schools, or in your dream location matters. But run the math first. If your insurance proceeds are $600k, rebuild costs are $950k, and you'd net $500k selling the lot, you're committing $450k+ to stay. Make sure that aligns with your financial goals and that you have liquidity to cover the gap.
Financial reality check: Create a spreadsheet with three columns: (1) Total rebuild costs including gaps, (2) Net lot sale proceeds, (3) Difference. Then factor in Prop 19 tax savings over 10 years and emotional value. Only rebuild if the numbers work for your situation.
Verified Facts You Can Cite
- Plan approval timing: Expedited district averages ≈ 69 days for plan approval phase only (design, bidding, and construction add 12–18 months). Note: This timeline is based on LA County's expedited process announcements; actual timing may vary by project complexity.
- Code policy: Sprinklers required; solar & battery systems not required for fire rebuilds per LA County policy; solar-ready infrastructure required.
- Construction ranges: $300–$800+ per sf typical for Altadena rebuilds based on contractor surveys and owner reports.
- Market anchors: Altadena median sold price varies by month and data source (recent estimates ≈ $930k-$1.54M depending on timeframe and property type). Check your MLS for current comparable sales data.
- Lot demand: Early reports from LAist coverage and local agents indicate multiple offers and some over-ask results on cleared Altadena fire lots.
MLS-Only Items (plug in before posting)
- [Insert] Median lot size: 7,811 sq ft (or latest from your MLS)
- [Insert] Median fire-lot price: $515,000 (or latest from your MLS)
- [Insert] Number of fire-lot sales in past 60 days: [check MLS]
- [Insert] Days on market average for fire lots: [check MLS]
FAQ
1) How long will a rebuild really take?
Design, engineering, plan check, bidding and construction typically span 12–24+ months for a complete Altadena rebuild. Here's the realistic breakdown: architectural design and engineering (2–4 months), plan check in the expedited district (~69 days or 2–3 months), contractor bidding and selection (1–2 months), and construction (8–14 months depending on size and complexity).
The expedited district speeds up plan approvals significantly, but utility reconnections (gas, electric, water), material delivery delays, inspection schedules, and weather can extend timelines. Budget 18 months minimum from breaking ground to move-in, and don't commit to a specific move-in date until you have your foundation poured and framing complete.
2) Are solar panels required on my Altadena rebuild?
No. LA County has suspended mandatory rooftop solar and battery requirements specifically for fire rebuilds under current policy. However, homes must be solar-ready, meaning they need conduit run from the roof to the electrical panel and adequate panel space for future solar installation. Fire sprinkler systems are mandatory for all rebuilds with no exceptions.
Check with LA County Building & Safety for the most current requirements, as code policies can be updated. The solar-ready requirement ensures you can add panels later without major electrical work.
3) What should I budget per square foot?
Use a range of $300–$800+ per square foot for Altadena wildfire rebuilds, with most projects landing in the $450–650/sf range based on recent contractor surveys. Wildfire rebuilds often run higher than standard new construction due to code requirements (sprinklers, enhanced roof assemblies, ember-resistant materials), challenging site conditions, and high contractor demand.
Always get at least three detailed, itemized bids from licensed general contractors with wildfire rebuild experience. Bids should break out site work, foundation, framing, systems, finishes, and code-required upgrades separately. Add 10–15% contingency for unknowns and budget soft costs (permits, design, engineering) at 15–20% of construction cost.
4) What about taxes if I sell or rebuild?
Prop 19 permits a disaster base-year transfer, meaning you can keep your pre-fire property tax assessment base when you rebuild, potentially saving thousands per year in property taxes. IRC §1033 may defer capital gains taxes on involuntary conversions (like fire damage) if you reinvest insurance proceeds in replacement property within the required timeline—typically 2–3 years from receipt of proceeds.
Both have specific requirements and deadlines. Consult your CPA or tax attorney immediately to understand your timelines, documentation requirements, and eligibility. Missing a deadline can cost you tens of thousands in unexpected taxes. If you're considering selling the lot, discuss with your tax advisor how that affects your §1033 eligibility and overall tax situation.
5) Are Altadena fire lots actually selling?
Yes—coverage from LAist and reports from local real estate agents indicate strong demand, with multiple offers and some over-ask results on early Altadena fire lots. Buyers include builders looking to spec homes, neighbors wanting to control adjacent development, and families seeking buildable land in established neighborhoods.
However, lot values vary significantly based on size, location, views, utilities, slope, and whether debris removal is complete. The median from recent sales is around $515,000 (check your MLS for current data), but individual lots can range from $350k to $750k+ depending on these factors. Your agent can pull comparable fire-lot sales from the MLS to establish a realistic price range for your specific property.
Next Steps: Your Fire Recovery Action Plan
Ready to make your decision? Here's your roadmap:
If You're Leaning Toward Rebuilding:
- Run your numbers - Use our Altadena Lot Value Calculator to compare rebuild vs. sell with your actual data
- Get 3+ contractor bids - Verify licenses at CSLB.ca.gov, check references
- Meet with your CPA - Discuss Prop 19 base-year transfer and §1033 timelines
- Visit the Altadena One-Stop Center - 464 W Woodbury Rd, get your permit packet
- Review our contractor guide - Choosing the Right Rebuild Contractor
If You're Considering Selling:
- Run the comparison - Use our calculator to see rebuild vs. sell net proceeds side-by-side
- Check current market data - Request recent fire-lot sales comps from your agent
- Understand tax implications - Meet with CPA about capital gains and Prop 19 eligibility
- Get your lot professionally valued - Consider multiple opinions given market variability
- Review our valuation guide - What Is My Burned Altadena Lot Worth?
Still Undecided?
Request free calculator access and we'll send you:
- Personalized rebuild vs. sell financial analysis
- Current Altadena fire lot market update
- Prop 19 tax savings estimate for your property
- Contractor referral list (vetted, licensed, fire rebuild experience)
No pressure, no obligation - just data to help you make the best decision for your family.
Related Questions
Can I live on my lot in an RV while rebuilding?
Yes, LA County allows temporary housing including RVs, manufactured homes, or mobile homes on your property while rebuilding. The temporary unit must have water connection, sanitary waste disposal, and meet safety requirements. Learn more about temporary housing options.
Will my property taxes go up if I rebuild?
If you qualify for Prop 19 base-year transfer, your property taxes will remain based on your pre-fire assessed value (plus inflation adjustments), not the new market value. This can save $5,000-15,000+ annually. Without Prop 19, yes—your taxes will increase based on the rebuilt home's market value.
How do I choose between contractors?
Get at least 3 detailed bids from licensed contractors (verify at CSLB.ca.gov), check references from past wildfire rebuilds, review their work in person if possible, and confirm they have workers' comp insurance. Post-fire demand is high, so start this process early. See our Contractor Selection Guide.
What if my insurance doesn't cover the full rebuild cost?
Many Altadena homeowners face coverage gaps ($300k+ average). Options include: negotiating supplemental claims, using personal funds, construction loans, tapping §1033-eligible funds, or scaling back the project. Some choose to sell the lot rather than fund large gaps out-of-pocket.
Should I use a pre-approved plan to save time?
LA County offers pre-approved architectural plans specifically for fire rebuilds that can reduce design and approval time by 2-3 months. These plans meet all current code requirements. However, customization is limited. Weigh speed vs. personalization for your situation.
How can I calculate my exact rebuild vs. sell numbers?
Use our Altadena Lot Value Calculator to run a personalized financial analysis comparing rebuild vs. sell based on your specific property data—insurance proceeds, contractor quotes, lot value, and Prop 19 tax benefits. The calculator provides net proceeds comparison and break-even analysis. Request free calculator access here.
Sources & Verification
This guide synthesizes information from the following authoritative sources:
- LA County Building & Safety - Fire Recovery - Expedited plan approval timelines, current code requirements for fire rebuilds, like-for-like rebuild guidance, and permit fee schedules (verified October 2025)
- LAist Eaton Fire Coverage - Contractor cost surveys ($928k average quotes), homeowner rebuild reports ($570/sf), insurance coverage gaps, and market demand analysis (2025)
- Market Data Sources - Altadena median sale prices vary by source and timeframe. For current market data including lot values, days on market, and comparable sales, consult your local MLS through a licensed real estate agent
- Local MLS Data (CRMLS) - Altadena fire lot sales, median pricing, and days-on-market statistics (updated monthly through licensed real estate professionals including The Borges Real Estate Team)
- California State Board of Equalization - Prop 19 - Proposition 19 disaster relief provisions, base-year transfer rules, eligibility requirements, and claim forms
- IRS Publication 547 - IRC §1033 involuntary conversion rules, timelines for deferring capital gains (typically 2-3 years), replacement period extensions, and tax reporting requirements
All cost ranges, timelines, and policy information verified through multiple sources as of October 2025. Building codes, market conditions, and tax rules may change—consult your licensed contractor, real estate agent, CPA, and attorney for advice specific to your situation.
Author
Justin Borges, Realtor® & Team Lead
The Borges Real Estate Team (eXp Realty)
Helping Altadena families recover from the Eaton Fire with local market data, builder connections, and no-pressure guidance. Specializing in fire recovery real estate since January 2025.
Free Resources:
- Altadena Lot Value Calculator (compares rebuild vs. sell with your actual numbers)
- Weekly market updates on fire lot sales
- Vetted contractor referrals
Contact: [phone/email] | Request calculator access
⚠️ LEGAL & TAX DISCLAIMER
This content is for informational purposes only and does not constitute legal, tax, or financial advice. Prop 19 disaster rules, IRC §1033 deferrals, and rebuild decisions have specific requirements and timelines that vary by individual circumstances. Consult with a qualified CPA, tax attorney, real estate attorney, and financial advisor for advice specific to your situation. Building codes and permit requirements may change; verify current requirements with LA County Building & Safety before making decisions.
