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.
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