This was supposed to be the year that Joel Cruz and his family would buy a house. The owner of a popular taco truck catering business called Oaxaca on Wheels, Mr. Cruz had begun to look in the West Adams neighborhood of Los Angeles, where his family has rented an apartment for the past 20 years.
Mr. Cruz, 43, liked a three-bedroom, two-bath house he saw at an open house held on a Saturday in January, especially since it was priced under $1 million. It reminded him of days past when homes twice the size in the same neighborhood listed for a similar price.
“I regret not buying before. It was always a dream — first the business, then the home,” Mr. Cruz said. “Now I don’t know what’s going to happen.”
Demand for housing has increased in and around Los Angeles following January’s wildfires, which contributed to a shrinking inventory, making the market even more competitive than it has been in the past. Rising interest rates and the difficulty of finding insurance compound the problem.
Cipriano Ramirez, a mortgage loan initiator, has seen families recalculate their budgets to accommodate rising interest rates.
“The process has become more stressful,” Mr. Ramirez said. People are qualifying for homes in the $500,000 to $800,000 range that are the most sought-after right now, he said. “There’s more competition for those price ranges.”
The competition has caused some buyers to try and speed up their buying plans. Brandon Humphrey, an insurance broker, had been planning to buy a home in Long Beach later this year after a frustrating, yearslong search. Concerned over increased demand after the fires in his beachside neighborhood, he is hoping to pay a $60,000 down payment on a condo by May.
“Every time you get close to a down payment, prices go up. Now with the fires, people are coming to Long Beach condos, whether permanently or temporarily,” Mr. Humphrey said.
Having just begun a new, higher-paying job in early February, that decision feels risky. Ideally he’d like to focus on the learning curve of a new job before committing to buying a home at the same time, but he’s feeling the anxiety of a home purchase being forever deferred.
Mr. Humphrey, who grew up in Long Beach, has dreamed of buying a home in his hometown since his early 30s. Now nearing 40, he’s gone from occasionally dabbling on Zillow to checking his favorite listings multiple times a day, making sure the prices haven’t increased in price. Even as a Millennial earning more than the average Angeleno at $140,000 per year, he feels pinned down.
“The American dream feels just out of reach for people like me,” Mr. Humphrey said.
Further north in Venice, 35-year-old Amanda Krader explored the bohemian luxury of her fantasies.
Strolling through a midcentury modern home, Ms. Krader, a television legal affairs manager, knew she would be up against buyers with deeper pockets, higher equity and urgent need. She decided it was time to take a break.
“I’m going to step aside for a little bit for the people affected by the fires who need homes most right now. I can wait for my dream,” Ms. Krader said.
Still, Ms. Krader, who comfortably pays $2,800 on rent and has saved $500,000 for a down payment, is frustrated that the fires have added a new layer of uncertainty in a city where housing has been increasingly out of reach.
“I’m the aspirational buyer, but I shouldn’t be. I’m in my mid-30s and have a solid job. I should be able to buy a house,” she said.
The crunch of dwellers staying on the west side has sent interested buyers, affluent or not, searching farther east into the hotter and drier Inland Empire. But the sentiment that new buyers are up against hundreds if not thousands of fire victims looking to replace their homes hasn’t escaped that territory either.
In Pasadena, houses are already selling for a half-million dollars above the asking price as competition for homes increases, says Andrew Rayas, a Compass agent in northeast Los Angeles. Calling this phase in Los Angeles a “hunger games,” Mr. Rayas said he hasn’t seen this level of bidding since the Covid-19 pandemic set the housing market into another frenzy.
At a recent open house in the quiet neighborhood of El Sereno, nestled between Highland Park and Monterey Park, he watched as 15 couples including first-time home buyers and fire victims, whispered among themselves while they toured a charming three-bedroom house listed for just over $800,000.
“There’s just that level of eyeing the competition, battle-wise. They know that they’re going to have to fight for this house and you feel it,” Mr. Rayas said.
El Sereno, like West Adams over the past decade, is seeing its own gentrification take shape following the fires. Mr. Rayas has been involved in starting a children’s museum and a social club to stoke interest in the area. As young couples perused the quaint quarters throughout the open house, longtime residents who lived nearby stopped by to figure out why home prices were rising so quickly.
Colleen Cameron, a nurse, and her husband, Graham Cameron, a project manager, sense that they will need to act quickly. Though Ms. Cameron has bought property previously in San Diego, Mr. Cameron is a first-time buyer. They are anticipating a summer real estate crush that could lead to higher bidding wars. Both 32-years-old, their budget is $1.2 million.
“If we see something we really like, we’ll have to put in an offer immediately. I’m a little worried about what houses could end up going for, on top of the asking price,” Ms. Cameron said.
As Mr. Cruz and his family search for an affordable but sizable home, they have been looking farther and farther away West Adams. They spent one weekend in Crenshaw, two miles away, and another in Santa Clarita, 35 miles away, and even one in Bakersfield, an hour and a half away. With children in bilingual Santa Monica schools and a local food business in the city, Mr. Cruz said he is worried that owning a home may give them no choice besides uprooting their lives entirely.
