Well, prices can’t go up every year. Malibu has had a nice run of real estate value appreciation since 2012, with six consecutive years of positive results taking the median price of a Malibu home sale from $2,075,000 in 2011 to $3.65 million during 2017. Last year, values took a pause.
Every indicator of home sale production took a small drop last year, leading off with the total number of sales units: A measly drop from about 250 units in most recent years to 242 last year was respectable. But the industry felt a slowing after the summer that mirrored a more pronounced slackening in the Southern California region. Then, the fire hit on Nov. 9, practically shutting down the industry for the final two months.
Nevertheless, even as sales nearly maintained their pace, values did not. Despite the supply and demand components remaining steady during the year, prices still dragged. In the end, Malibu took an 11 percent hit as the median price fell from $3.65 million to $3.25 million. The last time Malibu experienced a drop at all was 2011, when local real estate absorbed a 14 percent statistical whack in values. It should be noted, however, down years for our coast are rare. Since 1995, clear reductions in values have only occurred in 2001, 2009, 2011 and last year. The other 19 years were pretty close to even or distinctly positive.
The final results for the year were boosted by two deals that topped $85 million, on the Malibu Road bluffs and especially on Carbon Beach, where a $110 million price tag was the highest in Southern California history. Generally, however, the very high end sputtered slightly ($20 million deals dropped from 12 in ‘17 to seven last year) and the year was highlighted more by sales below the $3.65 million median benchmark of 2017. Furthermore, activity and sales at Malibu’s west end were essentially put on hold after the fire. [My next column will focus on the fire and its likely effects on the marketplace, with a review of what happened at Malibu’s east end after the 1993 fire.]
The adjacent chart shows a summary of the Malibu marketplace for single-family homes in the past four years. Condominiums and mobile homes are excluded. Only properties with a 90265 ZIP code are included.
The sales were split up between 59 on the beach and bluffs and 183 on the “land side,” away from the sand—both very typical numbers of recent years. Nevertheless, prices slid downward for the average sale price in both locations, as well as the median on the land side. The average sale price of all sales ($1,389,712,000 in volume divided by the 242 sales) came out to about $5.7 million, a slight drop also.
Optimistically, however, the trend line is upward over the past many years. A one-year pause is a normal phenomenon over Malibu real estate history. For example, 1997-2006 saw healthy appreciation every year—with the one exception of 2001, which performed similar to last year, with a slight correction. Going into 2019, the inventory of homes available for sale is currently extremely low; buyers may find it difficult to successfully negotiate ever lower prices faced with such few current buying choices. Furthermore, the number of homes that exist in Malibu just went down 15 percent; undamaged homes scored an immediate jump in value, in theory at least—a whole ‘nother future discussion.
The condo market in Malibu did much better than the house market in 2018, and posted some positive gains on the strength of a very robust year for beach-adjacent and beach-nearby condos, in contrast to a poor year for lower-priced units. [Another future column topic.]
Every year, the percentage of actual sales reported in the local Multiple Listing Service decreases, which causes some reporting discrepancies and shortcomings among the public media. These statistics herein, however, reflect many searches of public records throughout the year, using various searching sources, and include data of several dozen bona fide transactions that were conducted privately. A trickle of yet-undiscovered sales will surely follow over time, but have little impact on the averages.
Rick Wallace has been a Realtor in Malibu for 31 years and a local real estate columnist for 25 years.