Maybe people really are fleeing the city. Malibu represents an escape to a more rural area with great weather and less big city strife, and something strange is going on in the local condo sales market. Without any other explanation that would fit current market trends and underlying economic movements, Malibu condos under $1 million are selling at a dizzying pace.
For a few weeks, to this writing, there has not been a Malibu condo listed in the MLS available for under $785,000. Everything else has been cleaned out and some unlisted units have sold also. Chalk it up to finding anything “affordable” out of the city? The Malibu condo market is going wild.
The two clearly recognized condo complexes in town that offer the lowest prices, the Malibu Canyon Village (MCV) and Malibu Gardens, have had their inventories almost completely wiped out. At this writing, only listings in the 800s are available in the two locations. In one specific building at MCV, where eight sales had occurred between $323,000-$537,000 over the past 10 years, two units have topped $700,000 already this year. Two other units at MCV have sold for more than $700,000 and a few such listings are in escrow. MCV had three sales reach the 700s in 2017 and none in the past two years.
That is probably the overall best indicator for Malibu of what is occurring this summer.
To emphasize the particular attention to lower priced condos, the median for Malibu this year is actually going down. With so many units under $1 million being cleaned out, the median value is registering at about $934,000 for all of Malibu. Last year, it was just over $1 million. In 2018, it was over $1,250,000. Even during COVID-19, the sales pace is not far off last year’s tally, but the great weight of sales has been to the lower priced units. Possibly, size is becoming less important to the buying public, and location more paramount. Perhaps people want safer communities, even if living smaller. (In the home sale market for 90265, only nine houses are for sale under $2 million.)
In 2018, only 22 of the 78 condos sales in the 90265 zip code went for less than $1 million. Beach units as well as newer, larger condos were more the buying preference. Not this year. Twenty-six of the 45 sales, to this writing, have been under $1 million.
That is not to say that underlying prices are going down. Note the MCV experience above. At the Malibu Villas, in 2018, four sales averaged $793,000. Last year, seven sales averaged $804,000. This year, four sales so far have averaged $906,000. The Villas are another benchmark complex from which to test the sales winds.
The Malibu Bay Club is another weathervane. For each year from 2018-20, the average price has been between $930,000-$950,000 (excluding the expensive beachfront townhouses).
The big question is this: What the prices will look like if demand continues and the very thin supply of homes for sale doesn’t change.
At this writing, nine units in the $800,000-$900,000 range are for sale; two are in escrow. That was the general ratio of active/escrow for units under $800,000 until recently. For many years, $600,000 was the general entry-level price for a 1,000-square-foot, two-bedroom condo. Perhaps we are transitioning to $700,000?
It is not as if the whole Malibu condo market is thriving. The upper end is skittish. In 2018, there were 12 sales of beachside and larger, newer condos that topped $2 million. Last year, there were 10. This year has seen only five to date. As such, those seeking to escape the turmoil of the times seem to be doing so with price as a factor.
Rick Wallace has been a Realtor in Malibu for 32 years and a contributor of real estate articles to the community for 26 years.