$1 million isn’t what it used to be
By Rick Wallace /Special to The Malibu Times
There was once a time when $1,000 was the benchmark for Malibu home values. It was about 65 years ago. Homes in the Colony, and later in the hills east of Malibu, would sell for about that figure.
A generation passed, and so did $1,000 home sales; $1 million became a new benchmark, possibly in the late 1960s. By 1980, many large estates and prime beach homes began to command that figure.
This year, only about 20 percent of all Malibu home sales have been for less than $1 million. The sub-$1 million market is fast disappearing. It is only a matter of time, whether this hot market or the next one, before a local home sale under $1 million is virtually extinct.
Local Realtors know that for the homebuyer on a tighter budget, there are four primary neighborhoods to see first: Sea View Estates, Corral Canyon, Latigo Canyon and Malibu West. Each of these areas is enjoying rapid increases in values as demand under $1 million intensifies. The chart below indicates average price values in those neighborhoods since 1998.
Since that time, the neighborhoods have enjoyed the following approximate increases in value: Sea View Estates-up 86 percent; Corral Canyon-up 89 percent; Latigo Canyon-up 83 percent; and Malibu West-up 67 percent.
Only one home in Sea View Estates has closed escrow this year at this writing, but future sales will likely consolidate the average. At this writing, six homes are listed for sale in the custom tract neighborhood off upper Rambla Pacifico. All six are listed for more than $1 million.
The same phenomenon exists in Malibu West-two homes are listed for sale, both for more than $1 million.
Certainly many homes in both neighborhoods are not yet worth $1 million. The entirety of Malibu has only 15 homes total for sale at that benchmark, according to a recent count.
As recently as November 1997, more than 100 such homes were listed. The inventory dropped below 50 listings in August 2001. Last December was the first time it dipped under 20. After a small surge in July, it did so again and now the choice seems razor-thin.
The primary consequence of this trend is that 2003 is a great year for the lower price ranges and neighborhoods. Sales are brisk and huge gains have already been registered in the four identified areas. Each has surpassed Malibu as a whole: While aggregate Malibu is up about 6-10 percent, the lower-priced neighborhoods are up this year as follows: Sea View-21 percent (based on the first sale) Corral-12 percent, Latigo-31 percent and Malibu West-12 percent.
Some home sales are excluded from the averages because they involve estates far larger and out of character with the general theme and size of the neighborhood. The list of sales results for each year, however, is reasonably apples-to-apples in nature.
The statistics could change, of course, and less expensive sales could bring the averages down. The final results of the year will depend greatly on which houses hit the market-those a little more valuable, or less. Nevertheless, the overall trend for Malibu is unmistakable. As a scant supply of homes dangle in front of plentiful buyers still hoping to dip below $1 million, values are leaping.
Rick Wallace of the Coldwell Banker company has been a Realtor in Malibu for 15 years. He can be reached at his Web site at
www.RICKMALIBUrealestate.com.