Rick Wallace
Hoping for 100?
The number 100 can represent many positive things. As a percentage, it’s a perfect score on a final exam. As an age, most folks would like to make it to 100. As a number of home sales for Malibu during one full year, however, it can be dreadful.
Malibu is on course to barely squeak past 100 homes sold during 2008, which would be the fewest sold in at least 25 years. Only 55 houses were known to have been sold by June. The adjacent chart shows the sales history in Malibu for the past 20 years. Even in the poor markets of 1990-1996, sales never plummeted to current levels.
Since 2003, the number of homes selling in Malibu has been decreasing each year. In 2005, it notably dropped below 300 for only the second time in eight years. The past two years, failing to reach 200 units sold, have been tolerable because the inventory of homes for sale has remained in check. This year, however, the pendulum has swung wildly in the favor of buyers.
As a general rule, prices stay relatively stable in Malibu when the number of annualized homes sales is similar to the number of homes listed at the time. One can make their own judgments about current price trends by noting the chart that compares the sales pace for 2008 with the number of homes listed for sale.
After 1997, the seesaw of buyers and sellers was weighted increasingly in sellers’ favor, and huge price increases were the result. The only exception was 2001, which, sure enough, was a year of relative price stability. In 2008 the number of listings has grown to more than double the projected number of sales.
Out of the 55 known sales this year, only 38 were reported, included price, in the local multiple listing service. Relying additionally on outside sources besides the MLS, including research into public records of almost every home in Malibu, as well as past compilations, the figures herein were tallied. Properties of 1-4 units in the 90265 Zip code, excluding condominiums and mobile homes, are the subject of these charts.
Eleven homes presently in escrow are excluded from the By Price Range chart and are not counted either as current inventory or as sales.
It is hard to know how quickly values are dropping. Or what value adjustments have occurred so far. While there are, without question, many more homes in Malibu worth less than $2 million than there are homes worth more than $10 million, it is the latter category that has outsold the former (13 homes have sold this year for more than $10 million, compared to only 12 that have sold for $2 million or less). So current averages are completely unreliable to gauge price fluctuations. It takes plentiful sales evidence to determine the true slippage in values, if only there was such evidence.
Looking at the results by price range, the true challenge of the current market is easier to comprehend. At virtually every price category, the number of active sellers overwhelmingly outnumbers recent buyers.
Most particularly affected are those homeowners wishing or needing to sell. The dilemma is this: Sell now at a disappointing price, risk selling later at a more reduced price, or wait the unknown time necessary for the next good market to arrive.
At least the most expensive properties have done well. This year will likely see the most $10 million sales ever. Thirty percent of sales so far involved properties not officially on the market; most of those were in the higher echelons.
Contrarily, for those that were actively listed, pricing histories can be tracked. In almost every case, they began in a different price range before they were reduced, in some cases reduced often, let alone negotiated downward further to their final sale price. Most of the 12 homes sold at $2 million or less, for example, began at prices at least 30 percent higher than where they ended up.
It seems like 100 years since the last time buyers had conditions so favorable to pounce on exclusive real estate. Nevertheless, one should not forget the long-term history of Malibu prices. Factoring in the down markets of the past, Malibu’s average annual increase in home values has been 10 percent during the past 40 years. That is, there is usually better than 10 percent to 15 percent annual appreciation, the running average weakened by times such as this. Every phase of a cyclical market such as real estate has either buyers or sellers pounding their head against the wall and wishing they had taken advantage of the opportunity of the recent time. It is the sellers with headaches presently. The buyer of year 2008 may look like a genius in times to come.
Rick Wallace of the Coldwell Banker Company has been a Realtor in Malibu for 20 years.
HOME SALES 1989-2008
1989-231
1990-161
1991-152
1992-131
1993-153
1994-207
1995-186
1996-227
1997-275
1998-315
1999-303
2000-348
2001-245
2002-315
2003-315
2004-310
2005-265
2006-179
2007-170
2008 (thru Jun)-55
90265 zip code, sfr 1-4 units