The year began with few sales and distinctly lower prices. Throughout 2009, as deals trickled in, the median remained at less than $2.5 million. The Malibu median price, the point at which half the homes sell for more and half sell for less, is just above the level of 2004.
Only 104 known sales occurred in the Malibu real estate area that includes all addresses with a 90265 ZIP code, counting sales not reported in the local Multiple Listing Service. That is the lowest of any year going back at least 30 years, according to records. By any gauge, 2009 was the worst year for local real estate ever.
Consider that the state of California median home price had never seen a slump of more than 5 percent in one year, but then experienced a 55 percent drop during 24 months (mid-2007 thru mid-2009). It was only a matter of time before the upper end, which the Westside and Malibu represent, would suffer the impact. Malibu had never had a single-year drop of more than 10 percent in its values. Last year's slide had been thought unimaginable based on past performance.
The entire spectrum of the market is feeling the hurt in Malibu. That includes the upper end, sometimes thought to be impervious to economic forces. Nine deluxe Malibu properties found buyers for more than $10 million during 2009. But that is far less than recent years. In 2007, for example, there were 25 such sales.
At the base of Malibu real estate-condo sales-trying times prevail. After 117 sales in 2005, Malibu condo transactions numbered only 50 by 2007, 37 in 2008 and 35 last year. The median of 2008, $1,045,000, was reduced to $822,000 in 2009. Whereas no condo sold for less than $567,000 in 2007, there were three sales for less than $400,000 in the closing stages of last year.
During the past two years, Malibu homeowners have demonstrated a very deep love of their homes. Their appreciation and pride for their properties, no matter how long occupied, has translated into emotional listing prices, at least for those daring 47 that met with much resistance from the buying public.
The wide gap in opinions of value between buyers and sellers resulted in sales volume last year of less than $400 million, the lowest since 1997. For local brokerages, the business pie was 61 percent smaller than in 2005. Furthermore, about $1.5 billion in listings did not sell during the year. Five particular local Realtors alone accounted for $840 million in listings of homes that went unsold, but required expensive marketing.
It follows that the number of homes for sale, commonly called the inventory, is at high levels. Buyers have plenty to choose from among increasingly competitive sellers (all in an environment of already reduced prices and very low interest rates). Two hundred thirty homes listed for sale in the 90265 ZIP code in January was the highest tally for the month since 1999.
Since the upper end of the market was contributing less weight to the sales barrel, the average price of a home sale was also dramatically lower.
Compare: In 2008, 117 sales for $574,790,000 made for an average of $4.9 million per sale; last year, 104 sales for $384,739,000 put the average at $3.7 million per sale.
Frequently reported in the media is the increase of real estate activity in the state and region, which will surely arrive in Malibu before long. Gradual price stabilization, now seen in the lower price tiers of the Southland, will be Malibu's next phase. The stunning buying opportunities of present will diminish.
How the market reacts after some stabilization is unknown. For sellers who have been chasing the market downward seemingly forever, at least it will be refreshing to regain some negotiating backbone. For buyers who missed out in 2002 and 2003, before triple-digit appreciation raged throughout the market place, the values of those years will once again be available to capture.
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