The Malibu condominium market has been a leading indicator for several years of the Malibu real estate market as a whole. The lower values of condos serve as a price bridge to adjacent realty areas such as Westlake Village, Calabasas and Santa Monica, which provide the type of essential move-up for buyers necessary to nourish the Malibu marketplace. Just as those areas, where prices may range from $300,000 to $600,000, rely on move-up action from lower price ranges, Malibu is intricately tied to the outside world.
As a general rule, based on statistics from the last two complete cycles, Malibu prices go up higher than most other areas in a great market. But in down markets, Malibu seems to drop as badly as the rest of the lower priced tiers.
For some time, it has been known that the state and the county experienced drops beyond 50 percent in their respective median prices. The first evidence of a similar drop is transpiring in the local condo market. In two local complexes, particularly, recent sale prices have been about half of what was once typical.
First, a handful of units have sold in the Malibu Gardens for less than $300,000, or are in escrow now with a list price near that threshold. These are standard two-bedroom units of approximately 1,000 square feet. The most recent sale was for $252,000. At one time, it was virtually impossible to find a condo for less than $500,000 in the Gardens, or anywhere else along the coast. During 2005, seven units sold in the Gardens complex and only one of them was for less than $535,000. The very unit that just commanded $252,000, in fact, was the $535,000 sale, this time going for 53 percent lower. Right next to it is a unit that just sold for $309,000 after last fetching $610,000 in 2006.
Also, the Malibu Villas has experienced a similar retrenchment. During 2006, 11 units sold in the Villas, across the highway from Paradise Cove. The average sale price: $850,000. This year nine units have sold, at an average of $433,000. The decrease has been 49 percent.
Several examples abound of similar, dramatic adjustments downward:
– A two-bedroom beach condo just closed escrow for $1,175,000. It last sold in 2006 for a hair less than $2 million.
– The record-setting unit at Malibu Canyon Village, which sold in 2005 for $720,000, sold early this year for $430,000. In 2010, sales at MCV have ranged from $327,000 to $430,000. Just three years ago, nothing went for less than $560,000.
– A unit on Heathercliff near Pavilions just sold for $665,000. In 2006, that same unit was worth $1,195,000; a 44 percent drop.
– A Tivoli Cove unit that sold for just under $800,000 in 2006, sold again for $450,000 this year.
– The only sale in Zumirez Terrace View in the past three years came recently at a price of $407,000. The very same unit sold for $715,000 in 2005 and all sales in 2006 and 2007 in the complex went for even more than that.
In fairness, this phenomenon applies to the units in Malibu that are at the lower price ranges. Indeed, higher priced complexes such as Vista Pacifica at Lunita, The Pointe and Portico, for example, have had plentiful sales at decreases less devastating than above. But that is no guarantee they will not fall victim to a similar curse that has beset virtually every real estate zone in California-and now a faction of Malibu. The handwriting remains on the wall since the state median dropped more than 50 percent during 2007-2008.
The good news: This is where the action is. Condos priced less than $400,000 anywhere in Malibu are getting fast sales. Just as outlying areas are reporting upbeat sales tallies, the very low end of Malibu is busy, also.
The overall snapshot of local condos since 2008 is worth noting. In 2008, only 37 units in all of Malibu sold, giving ample warning prices would suffer. Last year, the sum was 40 units. With about 1,100 units existing and robust years seeing 100-plus sales, a heavy downward pressure has been undeniable. This year, total sales number 56, with the year not completed. The end of price decreases comes only after the beginning of sales increases.
But it is the nature of the sales that is most telling. Practically the entire market this year has been in the more affordable, lower-priced tiers mentioned above. Just as houses are doing in such places as Calabasas, condos similarly-priced here are forewarning a recovery.
In 2008, a scant 12 condos in all of Malibu sold for less than $1 million. Last year, it was 25 units. So far in 2010: 45 such sales. Not only is that a further indicator of prices gone far south, but that the market is finding its legs again.
Meanwhile, the average of all the sales each year, heavily weighted on top by large beach townhouse deals: 2008- $1,455,000; 2009-$970,000; 2010-$816,000.
For those interested in local housing indicators, the first substantial light at the end of the tunnel is the increasing sales, as well as price firming of lower-priced condos, at the entry gate of all of Malibu’s real estate.
Rick Wallace has been a Realtor in Malibu for 23 years.