Gap widens between number of homes listed vs. homes sold

The supply/demand dynamics of Malibu real estate have reversed completely from five years ago when scant few homes were on the market, and home sales were sizzling. Mid-way through 2009, a sales tally unimaginably low is offset by an inventory of homes available that is the highest of the decade.

Malibu is on a pace for much fewer than 100 home sales this year, compared to 2004 when more than 300 homes sold. Contrarily, about 140 homes were on the market five years ago and the number was decreasing rapidly. Now, the inventory approaches 270 homes for sale.

Listings represent supply. Actual sales represent demand.

Home values seem to resemble those of 2004, but moving quickly back in time. While the state and Los Angeles region have gradually seen more than 50 percent drops in value, Malibu is off about 33 percent this year from last. The median value of a home sale this year, $2,250,000, is well below the past two years, which topped $3 million, but about the same as the median of 2004.

Only 10 homes have sold in excess of $4 million so far in 2009; in 2007 it was six per month. In that prestigious category (homes for sale more than $4 million), more than 100 such listings are in the computer, highlighting the severe challenge of home sellers this year. With only one in 10 selling during a five-month span, the current inventory is about 50 months of high-priced Malibu listings waiting to sell.

The direction of values is unmistakable. A symptom of a lending market that collapsed and has yet to fully recover, the breakdown in the marketplace is systemic. Nevertheless, the result is a playing field where only the very most compromising sellers are luring willing buyers, and the influx of short sale listings and foreclosures increasingly influences the Malibu scene as it already has virtually everywhere else.

Both homes and condos are finding the same fate. Fourteen condos, in fact, had sold through May, a pace far different from 2004 when about 10 sold every month. On the plus side, the number of escrows opened recently has increased and activity is reported brisker throughout the industry.

The summer inventory of homes listed, seasonally the busiest of the year, only reached 200 last year-the first time since 2001. It is now at a point (more than 260 homes listed) not seen since 1999. Even beach homes are finding extra competition, with about 50 currently listed.

Malibu's pricey marketplace has lagged well behind adjusting to the financial meltdown. Only about a year ago did the tug on prices downward begin here, 18 months behind entry-level communities. Those communities have hit bottom, apparently, as California is experiencing brisk sales in low-priced regions and stabilized prices, albeit at 50 percent to 60 percent off the peak. Homes that sold in the past three months averaged 371 days of market time during their latest listing, some with previous brokers and attempts going back even farther.

The adjacent chart is produced from ongoing analysis of the local Multiple Listing Service information and a review of the public records of every home and condo in Malibu, as some sales are made privately. All homes and condos in the 90265 ZIP code were reviewed.

The median in Malibu was rising steadily since 2004 even while the number

of sales was decreasing. Malibu has been anchored by the high-priced market, which kept overall volume robust and tilted the averages upward, the last frontier for a market virus that slowly spread up the ladder.

Until this year.

Lower-priced homes (and condos) are getting the most attention as only the most affordable properties are sought by cash-strapped and loan-battered prospects. The inevitable recovery will begin with the lowest tiers, though a buying frenzy in that marketplace lacks apparent imminence.

Sales in Malibu as a percentage of homes existing is surely the lowest ever. Even as every price range in every region of the state has dropped more than 50 percent during the downturn, Malibu, in judging the behavior of asking prices, has pleaded exemption. The vast majority of new listings this year of homes that sold since 2004 are asking more than what the owner paid.

The measly sales totals are both a cause and effect of a community in denial of its fate. Buyers have long seen Malibu as overpriced and out of step with these new times. The sales totals of the past 18 months bear that out. On the other side of the coin, with such little comparable sales information available to work with, sellers have grappled with their pricing decisions and, as a whole, misjudged the market.

City adopts budget, passes resolution against state tax raid

City adopts budget, passes resolution against state tax raid

The Malibu City Council at its Monday night meeting voted to adopt both the 2009-2010 fiscal year budget and a resolution to help prevent the state of California from seizing $2 billion in statewide municipal property taxes to help balance its more than $24 billion budget deficit.

The council also voted to levy assessments for the maintenance, repair and improvements of landslide mitigation services in the Big Rock Mesa, Malibu Road and Calle Del Barco areas.

Totaling more than $36.5 million, the approved city 2009-2010 fiscal year budget includes expense reductions and fee increases the city has made after determining in April that its 2008-2009 fiscal year budget is $1.2 million less than originally projected.

Such changes include $300,000 saved by the termination of three city positions (senior civil engineer, division manager and part-time public works office assistant), and a $15,000 total decrease in authorized city salaries, among others.

For additional revenue, the city last week announced it would on July 1 begin collecting Transient Occupancy Taxes of 12 percent of rental income from private homes leased for 30 days or less. (A property owner will have to pay $120 per $1,000 in rent charged.)

The tax will generate an estimated $200,000 per year and will require property owners of the short-term rentals to register with the city and obtain a transient occupancy registration certificate. A one-time registration fee of $25 per property will also be implemented.

Despite its recent budget cut, the city stands to lose another $700,000 and myriad city services if the state decides to borrow $2 billion in statewide cities' property taxes as part of a plan to address what could amount to a more than $24 billion budget deficit.

The plan, unveiled by Gov. Arnold Schwarzenegger after voters on May 19 rejected a batch of ballot measures intended to generate $6 billion through mid 2010, would also hack billions from education, healthcare, law enforcement and social programs. If enacted as an urgency statute, the plan could be become effective July 1.

Thus, council members on Monday night adopted a resolution declaring that the proposed tax acquisition would create a severe fiscal hardship, as property taxes amount to one-third of the city's revenue. The resolution is intended to support the League of California Cities' efforts to prevent the state from collecting the taxes.

The state's possible property tax collection could jeopardize capital for numerous projects within the City of Malibu relating to water treatment, computer updating, street improvements and park construction.

Should the state decide to collect the taxes, Administrative Services Director Reva Feldman said the city would meet to discuss budget modifications.

Included in the 2009-2010 fiscal year budget are the assessments approved by the council on Monday night for the maintenance, repair and improvements of landslide mitigation services for the district areas of Big Rock Mesa, Malibu Road and Calle Del Barco.

The total 2009-2010 fiscal year levy for continued maintenance and capital improvements on Big Rock Mesa is $256,526. The annual assessment will amount to $726 per single-family household, a $280 increase from the cost during the 2008-2009 fiscal year. The increase is due to anticipated capital replacements scheduled for this fiscal year, as stated in a city report.

Malibu Road's total levy amounts to $46,513 for continued maintenance and capital improvements, with each single-family home assessed at $465. However, the city anticipates Malibu Road will incur a $1,544 deficit due to delinquency of tax payments.

The predicted deficit has not yet been factored into the 2009-2010 fiscal year budget, and staff in the upcoming year will consider a ballot measure to increase assessments to reduce the potential of deficits in future years.

The total 2009-2010 fiscal year levy for Calle Del Barco totals $95, with each single-family household assessed at $1. The city had a large surplus of funds due to collection of delinquent payments.

Meeting actions

- Directed staff to obtain a minority report from the View Protection Task Force.

- Authorized the city manager to execute the Community Recreation Agreement with the Santa Monica-Malibu Unified School District allowing the city to operate and maintain Malibu Equestrian Park.

- Appointed eight local students and two alternates to serve one-year terms on the 2009-10 Harry Barovsky Memorial Youth Commission.

- Authorized the mayor to send a letter to the U.S. Board on Geographic Names in support of renaming Negrohead Mountain, located near SantaSeminole Hot Springs, to Ballard Mountain.

Source:
The Malibu Times
By Olivia Damavandi / Staff Writer
Published: Wednesday, June 10, 2009 1:05 PM PDT