Real Estate Report: So Much for Finding a House Under $2 Million

It seems reasonable that a prospective person or family might want to move to Malibu and buy any appealing house they can find at the lower end of prices—something affordable, just to get in, just to be part of the climate and scenery and people and amenities of the Malibu area. It would seem reasonable that finding something under $2 million would be a realistic.

After all, $2 million is a lot of money. It would buy five homes at the current national median value. Less than seven percent of the households in America have a net worth of $2 million. It’s a lot of money.

Alas, our hypothetical buyer searching in Malibu for a house to buy under that price would find six houses listed for sale. It would’ve been worse during June when just two were actively for sale. In fact, for the entire time since Easter, five or fewer homes listed for $2 million or less have been available at any time. Of the six at this writing, only one is under $1.7 million.

Thus, it is practically hopeless to find any house to buy under $2 million in Malibu, let alone $1.5 million. Welcome to our latest reality.

There was a time when nothing in Malibu could be bought for under $100,000, probably about 30 years ago. Then $500,000 became an absolute floor. Now, $1 million for any house—any house, no matter how small, or how far up the canyon, or how bad of condition—is essentially the norm. No sale has been reported this year in the local multiple listing service for 90265 for a home under $1.2 million.

Still, there were 25 listings under $2 million at this time of year in 2019. Last year, November 2020, inventory was at 11. Ten years ago, there were more than 60 choices.

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So, affordable housing is almost impossible to find in this red hot market. And, by the way, is this not a period where housing is very “affordable”? So many people are buying homes; so many people seem to be able to “afford” the current prices. These are actually days of intense affordability, no? After it is all over, the market stabilizes and then cools, we will then find a market of “unaffordable” housing. At some point, few will be able to afford the prices of the day. Until then, why do we keep calling it a period of unaffordable housing prices? Buyers are affording it like crazy.

This is all not to say that there are no homes in Malibu worth less than $2 million; far from it. There are hundreds of homes, generally up the canyons, worth less than $2 million on the open market, in reality. It’s just that only six are for sale.

Then again, hardly anything of any kind is for sale. The mid-October inventory level was 117 homes for sale in the 90265 zip code. That was the lowest of the year, except for February at 116. The peak month of June at 129 homes was less than the peak month of last year: June, 2020 at 190 homes. What do you think this continuing dearth of inventory will (continue to) do to prices?

Rick Wallace of Keller Williams Realty has been a Realtor in Malibu for 34 years and a contributor to the community of real estate articles for 28 years.

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