In 2008, even amid the national housing collapse, the median price for a single-family home sale in Malibu rose from $3,050,000 to $3,250,000. It seemed Malibu’s pricey lifestyle was immune to market calamity. But only on the surface.
That same year, warnings of impending doom were evident in the very same 90265 ZIP code: the condo market. While home prices were flying high, condos stopped selling. Only 44 condos sold in all of 2008, where there had been 87 such sales just two years earlier. Most particularly, condos not located directly on the sand lost their appeal to a stingier buying public: only 30 inland condos sold, compared to 70 just two years earlier.
Malibu’s condo market, particularly the typical inland version, is the link between the luxurious Malibu real estate market and the rest of the real world. When the buying public wants to make a move from Santa Monica or Agoura Hills into the Malibu market, the condo market is the first point of impact; it is priced most similarly to the next lowest-tier from which the buyer steps up (or down) in wealth.
Malibu’s condo market shows the way for all market prices above. Want to know how your $5 million estate is doing in the marketplace 18 months in advance? Looking at condo sales at the low end now might be a solid indicator. Homes priced at $1 million today are probably looking at market results in six months similar to what low-end condos are doing now, as a general guess.
And what are low-end condos doing now?
Not much.
Sales in 2011 have been poor, nearly matching the collapse of 2009, offering little inspiration that a recovery is coming to the housing market any time soon.
The local condo market saw a median drop from 2008 at $1,095 million to just $560,000 by 2010 for all condos, including ones directly on the sand. This year, it has inched up slightly to $590,000, hinting at some price stability. On the other hand, while 64 condos sold last year (after 40 sales for all of 2009), this year projects to 57, a slight drop. The total volume of sales is projected to be less than last year, also. Instead of a boost in the market, there has been retreat.
The median annual sales price for inland condos is even more discouraging: $1,030,000 in 2008, dropping to $505,000 last year. So far in 2011, that figure is only $495,000. Values are less than half of what they were three years ago.
During 2007, the very lowest condo sales price in Malibu was $567,000. Last year it was $252,000. So far in 2011: $272,000.
Since condos showed the way to this darker market environment, it is the commodity trusted to guide the higher price tiers out of the doldrums, to be the indicator of better times to come.
Consider how many complexes throughout Malibu are performing:
* One of Malibu’s two lowest-priced neighborhoods, the 104-unit Malibu Canyon Village along Civic Center Way, had 10 sales in a spirited 2010, all at $430,000 or less. This year, there have been only four sales so far, with the highest going for $390,000.
* The Malibu Villas, near Paradise Cove, have been decimated unlike anywhere in Malibu. After a couple of sales over $1 million in 2006, (and a half-dozen sales above $800,000 during the glory days), literally nothing sold in 2008, despite dozens of listings that year. The 15 sales since have been for $500,000 or less, including a paltry three deals this year for around $400,000 each.
* The Zumirez View Terrace at Zumirez Drive and Pacific Coast Highway had many sales over $700,000 during 2005-2007, followed by a two-year slowdown. A few sales of less than $500,000 have been made in the last two years.
* Even more illustrious complexes like the Zuma Bay Villas, on the backside of Point Dume, have felt the squeeze. Just two sales have been made for 2010-11. Both of have gone for less than $1 million. By contrast, through 2006-2007, nine units sold for an average of more than $2 million.
Slim sales tallies at surprisingly low prices are the norm for virtually every complex in town. It was not supposed to be that way in 2011. The great, long-awaited hope-that a booming leap of condo sales would lead to price stability, followed by upward movement of single-family home values and a housing recovery-will have to wait longer.