During 1999, the value of Malibu real estate went up 37 percent. The median price went from about $800,000 to $1.1 million in that one year. Values also increased more than 30 percent in 2004. Malibu real estate has seen some fabulous times. From 1997 to 2007, prices quadrupled, doubling twice.
And then there is now—the double whammy. Everyone and everything are going through the one whammy; the scourge of the coronavirus affects almost every aspect of American life. For Malibu, it comes 16 months after the Woolsey Fire sent 17 percent of homes up in smoke.
Thirty-two homes have closed escrow in the 90265 zip code through March, putting us on a pace similar to last year’s post-fire tally, which reflected market pause. But we all know the pace is going to slow even more.
There are showings. A prospect and a couple Realtors can view a home with proper social distancing. Real estate sales and leasing are “essential” services. People still need to move. Showings are allowed and the rest can be done by email. It is still possible to buy a home. But not so much if you don’t have a job or your company may go under soon.
Normally, Malibu has at least 20 homes sitting in escrow, and in busy times the total can reach 35 or so. At this writing, only 13 homes are in escrow, projecting to few closed sales during April and May. Three of them were reported to the MLS entering escrow during March (four others were in February, three during January and three during 2019). Besides a Malibu Road beach house contracting on March 4, a Latigo Canyon home and a large Malibu Park estate were negotiated after the shutdown. Not much else to report.
Except this: The big money is mostly staying away. The median price in Malibu last year was $3.6 million, but 17 of the 32 sales this year have been at $3 million or lower. Only two of the 13 current escrows are over $3 million.
I liked the comment of another Realtor I read recently, whose name I did not note: “This feels like 9/11 and the 2008 collapse combined.” For the real estate industry, it is the shock of a sudden unexpected catastrophic event, mixed with a monumental economic setback with unknown proportions.
Last year through March, 13 condos in 90265/Malibu had closed escrow. That was on the way to 70 for the whole year, the fewest since 2012. This year, the tally was eight. Meanwhile, eight others are in escrow at this writing. All of them reported in escrow since Feb. 1, and four of them were in March, but only one after March 13.
Thus, it can be summarized that since the crisis exploded in mid-March, a total of three condos and homes have come under contract. In a normal world, it would be one per day.
That leaves some examination of the leasing market during these challenging times. Thirty-two properties rented out in 2019 during March, according to MLS records. And 28 leased last month. The essential movement of people and families from home to home has been slowed only by the inconvenience of the virus’ movement restrictions. The median price of all reported rentals, including condo and mobile home leases, was $6,700. In 2019, on the heels of heavy demand after the fire, it was $7500.
The clear pause in potential buyers looking for homes may be offset over time with fewer sellers bothering to sell. That effect is not yet seen in these early days of the crisis. The same exact number of homes were for sale last month as in 2019—160 listings of single family homes in the 90265 zip code.
The inventory of homes for sale was last over 230 in June 2018. One month before the fire, it was at 215. It has been under 200 since Nov. 9, 2018—the day the fire came to town. This year’s inventory has been tracking last year’s almost exactly for the first three months. But clearly, in this new world, the number of serious buyers is not and will not.
Rick Wallace has been a Realtor in Malibu for 32 years, and a contributing real estate columnist for 26 years.