There is normal life and there is COVID-19 life. Before this year, no business or industry knew there was a difference. By March, no person or company was quite sure what the differences might be. Now, we know more.
For Malibu real estate, it has been a tale of two cities. In April, only five homes closed escrow in Malibu. We were headed for the worst real estate year—ever, by far.
Surprise! July had 30 sales and last month followed up with 34. The local real estate industry has been as busy as ever. The sales tallies from the past two months have been staggering—equaling the first six months combined!
By the end of June, the 90265 zip code had seen just under $400 million total volume for the year. During the past two months alone, it was over $400 million.
Nearly half a billion in real estate sales for two months is off the charts. Malibu has never seen anything like it. The pace is almost double any other year, ever. (The record year was 2017, with $1,470,000,000 in total homes sales volume in 90265.)
And this all happened during a period of our county’s heaviest COVID-19 caseload. There is obviously no precedent for these economic and social conditions. What happened? Are people fleeing the city? Are people fleeing stocks? Have traffic and fires and the homeless been eliminated in Malibu? Maybe the election prospects are prompting relocation-mania?
Some businesses and industries have certainly benefited from the pandemic. See Amazon and Zoom. Then there are movie theaters and millions of other businesses and people hurt by it. In great contrast to the first three months of lockdowns and fears, local real estate has come to be thriving, despite it and/or thanks to it.
From the worst year ever projection made in April, it now looks to be a gangbuster year. Prices are in a frenzied upswing. The median price of a sale through August was a mind-blowing $4.8 million, for 132 known sales. Compare that to last year, $3.6 million, and Malibu is seeing a 33 percent rise in prices!
Amazingly, during the whirlwind of 64 sales during July and August, the median of that batch of deals was more than $5.2 million. Big money has invaded Malibu this summer. Malibu had only nine trades over $10 million through June; there were 11 in July and August alone. The market under $2 million is nearly wiped out, meanwhile. Only eight of the 64 “summer” sales were for less than $2 million, a number itself far more than three times above the state average.
The local industry has survived just fine in the new world of email and internet that now makes up the great bulk of the home selling process. In that regard, the whole real estate industry was somewhat prepared for the pandemic. In-person showings and inspections at residences can take place well within distancing guidelines among small groups of people. The rest is online.
Now, it is just a matter of accommodating demand. Total sales of homes in Malibu were about 150 last year—in the post-Woolsey Fire reduced inventory period. That had followed seven straight years of rock-solid consistency of about 250 sales each year. What looked like a year of less than 100 sales in 2020 now will likely top 200.
Total sales volume at just above $800,000,000 through August should make this the second- or third-highest year ever for that statistic, thanks to July and August.
These statistics reflect information culled from the local Multiple Listing Service as well as public records that detect private, unpublished sales, though a handful of them from recent months are surely not yet known. Condos and mobile homes are excluded herein.
Most gratifying, perhaps, is the deluge of interest in higher priced properties, including a beach sale market that has been fabulous. Malibu had at least 19 sales on the beach the last two months. That compares to 39 for all last year and 25 for the first half of this year. Large estates off the beach have also been selling like hotcakes, a laughable analogy. Five stunning, large estates capturing $10 million or more off the beach this year have all transpired since the end of June.
As such, the average price for the 132 sales so far is topping $6 million. The average is the total volume divided by the number of sales. The median price is the point at which half the sales are higher and half are lower.
Current tallies:
2020 average: $6,103,000
2020 median: $4,815,000
The previous records were set in 2017, and were helped by several mega-huge deals.
2017 average: $6,204,000
2017 median: $3,650,000
There have even been two locations in Malibu where three practically adjacent homes have sold, all six of them closing escrow in July and August. Three adjacent homes selling at the same time is essentially unheard of, ever. But maybe a pandemic is different.
If nothing else, the people in Malibu who own property are seeing a bump up in their net worth. This may come at a time for them with income and other economic conditions were otherwise strained. Malibu gets these sudden, even unexpected, bursts of activity and price appreciation every once in a while. You sometimes don’t know how or why the real estate in Malibu is suddenly so much more valuable. But now we are talking a median price over $4.5 million; 25 years ago, it was $680,000.
Rick Wallace has been a Realtor in Malibu for 32 years and a contributor of real estate articles to the community for 26 years.