For local Realtors who pay attention to the multiple listings’ daily hot sheet of market updates, activity has been heavy. The tally of changes seems lengthy every day. It’s not that sales are brisk; sales have been slower. It is new listings on the market and a rash of price reductions that have become the Malibu real estate market’s most prominent features.
There is always something going on in real estate. Somebody is buying or somebody is wanting to sell. Lately, folks more anxiously wanting to sell is the trend, characterized by price reductions. Nearly half of the homes on the market today have experienced at least one price reduction, and many of them in recent weeks. Furthermore, the inventory is increasing rapidly-half the homes on the market now joined the club just since April 1.
A market in transition may have tilted to a buyer’s advantage. Last year in March, scarcely 100 homes were listed for sale. The choices have now doubled, with a supply of homes for sale reaching 200 for the first time since October 2002.
The pace of price reductions is not exactly at a frenzy. But it’s close. Sellers of homes languishing with few showings are learning that competitive pricing is mandatory in 2006. Particularly at the lower price ranges, with a burst of new listings hitting the market, price reductions are fairly rampant. Nearly 80 percent of the homes offered for sale under $3 million and on the market more than four months have had a price reduction (31 out of 39 such listings).
About two-thirds of the homes listed before April 1 have had a price reduction.
The chart below breaks down the trend of listing prices and price reductions. Single-family homes in the 90265 ZIP code are included in the analysis. Homes are categorized by their current asking price (as of July 10), as well as their time on the market so far. The original date the home went on the market and the original price have been tracked in each case to determine these tallies.
It appears the low end of the market is quickly responding to new realities, while the upper end pays less attention. A whopping 47 homes have hit the market for less than $3 million just since April 1. According to the MLS, 24 homes closed escrow below that benchmark in that same period.
With an average of eight homes selling each month under $3 million, the current supply of 86 homes for sale may take an average of 11 months each to be sold out, keeping in mind that new listings add to the competition during that time.
Higher up the price ladder, hopes are darker. About 45 homes are currently listed between $3 to $5 million. With 14 reported sold since April 1, the inventory of current homes may take an average of more than a year to all sell.
Many homeowners are unwilling to wait. The competition for buyers has been joined, and only the most anxious sellers with appealing prices are attracting offers. Have prices begun to drop? No. Have any sales in 2006 been for less on the same home than in the past couple years? No. Will the answers to both questions change in the coming months? Probably. One new listing is asking for less money than the owner paid for the same home in April 2005. It is only a matter of time before some anxious sellers begin to take less money, in the current environment of fewer sales and more listings, than they had paid at one point.
Not noted in the chart is the number of price reductions per residence. Some homes have dropped their price several times. Only noted are listings that came off their original price since first listed.
Despite the pendulum movement back to a buyer’s advantage, some eyebrow-raising sales still occur. Most notably, a trend remains that sales tend to be close to asking price.
Here are some closed sales from the past three months drawn from one end of Malibu to the other:
A home in the upper mesa of Malibu West sold for about $1.8 million (and just above asking price). The home has ocean views from all the back rooms. It has four bedrooms and a large back yard.
A transaction that closed this month involved a four-bedroom house in the Rambla Pacifico area, just above the slide. The final sale price of $1.8 million was 25 percent off asking price and not much of a jump from the purchase price paid on the same house last year. The property has three acres and a good ocean view.
The upper Zumirez neighborhood saw a house sell pretty quickly and at a final price of $2,750,000. The same house sold for just under $2 million in 2004. The current version is nicely landscaped on about one acre with ocean view and a home with three bedrooms, office, soaring ceilings and French doors.
A sleek, contemporary-style home in La Costa Hills sold for about $3 million (at full price). Including beach club rights, it featured great ocean views and a kitchen with top of the line stainless appliances. Several walls are made of glass. There is a media room and despite the hillside location, some flat grassy yard as well.
A stunning villa in the Sycamore Park area sold for $5 million (also at full price). The Spanish estate is on two acres, all lushly landscaped and walled, and includes a pathway that leads to the Escondido Falls. There are several fountains on the property and several structures also, including a guesthouse that has a media room. The home has the sensation of one of Malibu’s most private retreats.
Another property selling at $5 million, yet again at full price, was a huge 10,000-square-foot contemporary estate in the Sea Vista neighborhood. The property opens with a large motor court and five-car garage, but also includes sweeping ocean views. The master suite leads to the pool. Additionally, the home has an elevator, media room and wine cellar.
A home on Point Dume sold practically its first day on the market for a full asking price, $3.7 million. Elevated at the highest point on the Point, it has complete ocean views and queen’s necklace views to the east, down a private lane.
A home in the El Nido section of Corral Canyon sold for about $1.5 million, close to its asking price. The remodeled home was effectively a duplex, and included two parcels. The property is decorated like a walled hacienda.
A fixer beach cottage near the County Line sold for about $2.5 million in a deal that closed escrow in early May. The house has only one bedroom, but sits on a wide lot of 60 feet of sandy beach.
A home in Malibu Country Estates sold quickly and at full price, about $2.9 million. Built in 1978, it has four bedrooms, a three-car garage and excellent ocean views. The home has the appearance of a California mission in style.
An architectural-style home in the flats of Serra Retreat brought nearly full price, just under $3.5 million. The home features open spaces and high ceilings of wood beams. The large, grassy back yard includes a pool and spa.
Rick Wallace of the Coldwell Banker company has been a Realtor in Malibu for 18 years. He can be reached at his web site, www.RICKMALIBUrealestate.com.
MALIBU HOMES
LISTINGS / PRICE REDUCTIONS
LISTED SINCE APRIL 1
LISTED JANUARY – MARCH
LISTED 2005 OR PREVIOUS
TOTAL
PRICE
# LISTINGS
# REDUCED
# LISTINGS
# REDUCED
# LISTINGS
# REDUCED
LISTINGS
Up to $3 million
47
13
17
10
22
21
86
$3-5 million
23
5
7
4
15
10
45
$5-10 million
22
4
14
8
7
5
43
More than $10 million
8
2
10
4
10
4
28
100
24
48
26
54
40
202