Financing is still tough; however, many sales are going to cash buyers.
By Patrick Timothy Mullikin / Special to The Malibu Times
Millie Campbell is convinced the $4 million property she is co-brokering will sell by the end of Sunday’s open house. Some two dozen groups of possible buyers have strolled through the premises, each oohing and aahing at the spectacular ocean view.
“Just look at this panoramic view,” the Sotheby’s International Realty agent said to a French woman who’s gazing at the ocean.
“At $4 million it’s a steal,” the 30-year real estate veteran said after the French woman leaves.
The neighborhood is bustling with open houses, and Campbell feels charged. “This is a window of opportunity for buyers,” she said of the current real estate market.
A few blocks away and a few weeks earlier, Coldwell Banker agent Marta Samulon, all smiles, was busy posting a “SOLD” sign in the front yard of a $3 million Coastline Drive home.
Malibu’s sleepy real estate market has perked up in the past few months, agents say. And while sales are not great, most agents are optimistic the market is turning around after months of inactivity.
“Sales are on the upswing. There is definitely an increase in activity; still not anywhere near to the degree that we were a few years ago,” said Bill Rhodes, an agent with Coldwell Banker Malibu Colony branch office. Rhodes said that while home sales to date are up some 80 percent higher than last year throughout Los Angeles County, sales of homes in Malibu are down.
He explained why: “That 80 percent increase is for homes under $500,000. The median price in Malibu is something more in the two million-ish range.”
Bill Bowling, president of the Malibu Association of Realtors and Realtor with Prudential Malibu Realty, has year-to-date sales figures for Malibu, and they show an actual, though tiny, increase over last year. “We are a slight bit on the up,” he said.
According to MLS/CLAW (Combined Los Angeles Westside Multiple Listing Service) figures, 69 single-family residences sold between Jan. 1 and July 31. Last year 62 homes sold, including at Heathercliff and Paradise Cove mobile home parks, and 18 condos sold so far this year, compared to 15 last year at this time.
For the 275 or so real estate agents in the Malibu area, these numbers are encouraging.
“There are lots of open houses and lots of buyers [who] are now ready to get into Malibu, when in the past it was unaffordable,” Bowling said. “In some cases we have seen million-dollar reductions.”
Katie Bentzen, co-founder of Bentzen Levin Real Estate Inc., is seeing it.
“Homes are selling in Malibu again, but not unless the price is right. I’m talking about homes listed for $14.5 million selling for $11 million, or $8 million selling for $5 million, $7 million selling for $4 million,” she said. “A bluff-top estate I listed didn’t get an offer until we dropped the price a million dollars, and then two offers came in. It sold to a cash buyer.”
For buyers and agents, these price reductions are good news. For sellers it’s a different story. Some sellers, agents say, are sticking to their prices, hoping to get top dollar (or recoup their losses) when the market turns around. As a result, the market is flooded with inventory.
“We’re at all-time inventory levels in all price ranges,” said Sandro Dazzan, an agent who works alongside his mother, Irene Dazzan-Palmer at Coldwell Banker Malibu Colony branch office. “On the beach there are over 50 homes for sale, where three or four years ago there were maybe less than 20 homes for sale.”
Dazzan agrees it’s a buyer’s market. He also agrees that for some sellers-those who paid top dollar for their Malibu property and have an unrealistic view of their home’s real value-this may not be the best time for them to sell. And many aren’t.
Sellers who are realistic about their asking price, however, are getting offers and selling their homes, he said. That’s music to agents’ ears.
Mark Gruskin, who works out of Westside Estate Agency’s offices above Carbon Beach, agrees with Dazzan. “Motivated sellers who have accepted current market conditions and have priced their properties accordingly are still selling, though not without some tough negotiations and crossed fingers along the way,” Gruskin said. “Indeed, on all levels of the market, pricing is key. And in some cases, where the property and pricing are right, we are actually seeing multiple offers-reconfirming that there are still plenty of buyers out there, but only for the best deals.”
Even though the deals are out there and interest rates are at an all-time low, many prospective buyers are finding it tougher to get financing.
“Those [deals] involving loans have at best been challenging and at worst a complete nightmare,” Gruskin said. Many of his deals have been with cash buyers.
Dazzan-Palmer said 80 percent of her transactions have been with all-cash buyers.
“Interest rates are unbelievable right now,” Rhodes added. “They are just phenomenal-if you can qualify.” This is not always easy. Rhodes said gun-shy lenders now want a lot of money down. “The lenders have gone overboard in the other direction. They were so lax for so long, now it seems like they are going, ‘Hey, we are proving a point, that we can be really tough.’ We need to find some middle ground here.”
Dazzan-Palmer agrees it’s tougher for buyers to get a loan. “In the loan market today you have to have a very high FICO score, even if you have a lot of dough,” she said.
Bentzen added: “Lending is our number one problem. The banks are very tight; they’re holding onto that stimulus money.”
Harlow Sharp, mortgage loan officer for Bank of America home loans in the Malibu area, agrees it’s tougher for some people to qualify for a loan. Tough but not insurmountable.
“Some people would say we have gone back to traditional lending, so to speak, in that loans are all income and asset documented, as opposed to stated income,” Sharp said.
While Sharp said the combination of low interest rates and realistically priced home prices has sparked a slight uptick in the Malibu real estate market, he’s not convinced this uptick signals a real upswing in the real estate market.
However, most Malibu real estate agents are hopeful the Malibu market will rebound
“It always does,” Dazzan-Palmer said. “Here’s what I tell people about the real estate market: It goes up. It goes down. And then it goes waaay up. That’s living in the ‘Bu.”