Home values increase more than 20 Percent in 2003 Malibu median price reaches $1,662,000.
By Rick Wallace/Special to The Malibu Times
Keeping pace with a torrid Southland real estate market, Malibu single-family home values increased more than 20 percent during 2003. Joining ever more elite status, the median price rose from $1.375 million to a lofty level of $1.662 million during the year.
Driven by exceptionally low inventory, ravenous buyers were in force throughout the year, though the last quarter saw the largest push of prices upward. A total of 300 homes were known to have sold, keeping pace with the tallies of every year in the past six, except for 2001.
The accompanying chart shows the terrific rise in values in Malibu since the bull market took hold in 1998. The average price of a home sale has increased from $1,266,000 to $2,451,000 during that time.
The volume of sales for single-family homes only located in the Malibu/90265 zip code, inside city limits and out, was a staggering $735 million. This success came despite an inventory that reached generational lows, and offered only 135 homes for sale at the close of the year. There are about 4,000 homes that exist in the Malibu area.
For every year since 1998, save 2001, powerful increases have occurred in Malibu in sales, volume or values, if not all three. Last year was no exception. The median average increased 20.9 percent while the average was up 22.6 percent on volume never before seen and scarcely imagined.
The reported increase in the median value for all of Los Angeles County was 20.9 percent. For Ventura County, 18.9 percent.
Malibu enjoyed the twin circumstances of heavy upward push from lower-priced surrounding communities combined with the draw of high-end sales. At least 24 homes were known to have sold for more than $5 million. Remarkably, nine of those exceeded the eight-figure mark.
The market prices are purely a function of supply and demand. Currently, however, the supply and demand is partly driven by the market itself. The upward market is propelling ever more buyers, also inspired by interest rates, to gobble up supply. The deflation of the number of homes available pumps prices higher causing ever more anxiety among buyers. The cycle of increase feeds upon itself. Adding to the dynamics is the slow pace of construction, as governments keep growth capped, while the population increases at a faster rate.
Buyers, in general, have resisted waiting for a better time. Why? See the chart. Prices keep increasing. There is no guarantee that prices will level out soon, and in fact, based on current inventory levels, surely won’t in the next few months. The risk to buyers of missing the market has been greater than the hope of catching it lower. And thus, the frenzy continues.
Home sales of 300 or more are considered very strong for Malibu. The numbers in this study represent numerous sources of information, particularly the Westside Multiple Listing Service, which serves Malibu. Many other public and private sources were used, and the fate of every home listed for sale during 2003 was tracked. Information about homes sold secretly and otherwise undisclosed, is also included.
(The Los Angeles Times Real Estate section of January 25, 2004 reported that Malibu prices, based on 229 home sales, had increased 30.5 percent to reach a new median level of $1,305,000.)
Some yet undiscovered closed transactions will push the total sales and volume yet higher, but will have little impact on the averages. The record of 353 sales in year 2000 will remain unchallenged.
The distribution of sales for each $1 million benchmark was as follows:
up to $1 million – only 53 sales. $1 million-$2 million – 128 sales. $2 million-$3 million – 51 sales. $3 million-$4 million – 27 sales. $4 million-$5 million – 17 sales. More than $5 million – 24 sales.
The 65 sales that occurred on the beach and bluffs brought the average price in that category to $4 million, exactly. They say they don’t make any more sand out there. It is reflected in the values. Beach property is up 250 percent since 1998. Landside homes, without direct access to the sand, are also up more than double, from $708,000 in 1998 to $1,450,000 currently.
In the year 2003 alone, the average price increase on the beach and bluffs was up 31 percent while the median rose 38 percent.
The biggest single news story of the year was the widely reported purchase by a technology icon of five homes on Carbon Beach for $65 million. The total sales figure, often used in this newspaper as well as the L. A. Times, could not be confirmed by any source. Based on a number of factors, it is much likely the actual sum paid was in the $50 million-$55 million range. Furthermore, two of the homes were bought in 2002. The other three homes and their estimated sale prices are included in these statistics.
Sales were strong across the board, though the leasing market staggered somewhat. Condominiums, reported to have kept pace or surpassed home value increases throughout the county, likely did so here also. Capped by razor thin inventory, as well as virtually no new construction active or planned, and driven by high demand for anything affordable, the Malibu condo market was blazing hot all year.
January seemed to indicate no let-up in the real estate market, as many year-end deals closed. The inventory remains at record lows with homes briskly entering escrow.
Rick Wallace of the Coldwell Banker Company has been a Realtor in Malibu for 16 years. He can be reached at his Web site: www.RICKMALIBUrealestate.com