Coming on the heels of a furious close to 2012, the question was whether the suddenly robust Malibu real estate market could sustain its momentum. The first three months of 2013 have answered that question in the affirmative, and based on historical analysis, the statistics indicate one lasting lull before prices rapidly escalate.
To understand the current market, it is useful first to look back. When the miserable real estate market of 1991-1996 came to an end, it was in the thunderous month of May, 1997, that activity suddenly boomed in Malibu and the negotiating power began to switch from the buyers to the sellers. For almost a decade thereafter, it was a sellers market and prices were rising.
Now, after four or five years passed with the buyers controlling the market, this past December was the month that tilted the seesaw, apparently, as the lifeless local market of 2008-2012 awakened with a fury. About 35 homes sold as the year came to a close, almost all of them in the last two weeks, leading up to New Year’s Eve. The question after such an anomaly of a month was: “Would the new, busy market keep up its momentum?”
The answer has been yes. Sales and volume have been all that could be wished for (from an owner’s standpoint) through the first quarter of 2013, along Malibu’s coast. If you are a prospective buyer, however, the weight keeps growing heavier on your shoulders.
Not that prices are yet screaming upward. That is the very last piece of a Malibu real estate puzzle that has already had its edges and colorful parts fitted. The crush of buyers battling for an ever-decreasing supply of homes for sale has stabilized market values and made home selling often a speedy proposition, but the statistics for January to March indicate one last statistical pause before prices rapidly escalate.
The median sale price for the first quarter of 2013 in the 90265 ZIP code was $1.8 million. Last year, for all of 2012, it was $2,250,000. It is not that home values are going lower, based on that snap shot of the 3-month market, but that more lower-priced homes are selling at a faster rate than the higher-priced product. All price ranges are selling well, actually. The low-end inventory is simply depleting the fastest.
What is most significant of that three-month snapshot: It confirms that prices are not yet screaming upward.
The emphasis on “yet.” In the progression of a real estate cycle, it is now only a matter of time before they do.
This year has begun with the same hectic pace that 2012 ended, in the number of units sold. About 55 houses closed escrow (there were about 250 sales all of last year). $257 million volume was recorded, but the heavily rumored $75 million Encinal Bluffs blockbuster sale that transferred owners on January 4 is included in the total. With that sale excluded, the first quarter would project to full year accumulation of $720 million in volume. Last year ended up at $870 million in volume. Secret sales of late, not yet uncovered, would boost the projection.
The median seems a little lower. And the volume is possibly lower than last year. Is something wrong? Probably not. Statistically, the differences are pretty insignificant and, furthermore, the first quarter is often the slowest quarter of the year. Likely, with any sort of momentum, the 2013 results will be everything we had in 2012 and more, in every way of measuring.
There is a subtle dynamic within the Malibu marketplace that is taking place. In the hottest portion of the Malibu market, the sub-$2 million plateau where business is so brisk, the median is weighted down as described. However, homes are selling at clearly improved prices below that $2 million tier, as values adjust to the hectic pace of that market. The impact of those ever more impressive deals is just not evident in the stats. Distinguishably higher sale prices at all value tiers will be the next phase in the market, certainly.
Many brokers on the west side of Los Angeles complain about lack of inventory, causing fewer sales units. Malibu has had enough inventory of homes listed to allow for plentiful sales units. Next up is too little inventory to be compensated by increasing prices.
In the condo realm, additionally, most of the past month or so has seen no listings at all available under $500,000. At least 30 such listings have been on the market since the beginning of last year. Yet none remain. Any that were available under $500,000 are now in escrow or already sold. When the low end is thriving, it bodes well for the whole market.
Rick Wallace has been a Realtor in Malibu for 25 years.