Upward price surge continues through midyear
By Rick Wallace/Special to The Malibu Times
What is a young buyer to do in the local real estate market we have these days? After finally saving a bankroll of money, with a career launched and established, the dream of Malibu home ownership seems ready for fruition. But the prices!
Buy a one-bedroom condo at the beach for $600,000? A small house in the hills for $900,000? Yes you can, but with no view of the ocean. Amidst the ever-present test to behold who can afford Malibu and who can’t, many purchases today seem just crazy.
Hundreds of hopefuls delay or turn away for good, daunted by the prices of Malibu homes. But it doesn’t necessarily make sense to wait-the competition snaps up the current supply of meager inventory and the next batch of available homes is even pricier.
The Malibu real estate market rose at least 1 percent per month through the first six months of 2003. The median price of a home sale, $1,375,000 during 2002, has been $1,450,000 through June of this year. That represents an increase of about 6 percent.
The average price of a home has reached $2.1 million. That is based on 131 home sales though June at a total volume of just over $275,000,000. Last year, the average sale was $1,934,000; the gain this year is about 8.5 percent so far.
For those who have predicted the market moving yet higher, your hunches have been correct. The combination of heavy demand and limited supply is pressuring prices upward throughout the Los Angeles area. New projects essential to the housing supply, both small and large, can’t get off the ground. Scant resale inventory and low interest rates almost assure increased values. Prices are very high on our shores, and there is little constraint.
The inventory of homes remains particularly slim, especially in the lower ranges where so many buyers are trying to establish a foothold in Malibu. Only 17 homes are for sale under $1 million in all of Malibu and the 90265 mailing zone. All of Malibu has about 195 homes listed, extremely low compared to summers of the last decade.
Since the beginning of 1998, the average price has risen 65 percent, from a base of $1.27 million. During that year, the median was $801,000-now it is 81 percent higher, at the level mentioned above-$1,450,000. Half the homes are selling for more than that number, half for less.
If there is any sour news at midyear, it is a slight weakening at the higher price ranges. Beach-home sales were few-only 22 through June. (Nevertheless, when a beach home did sell, it sold big: the average beachside sale was $4.7 million, with a median value at $4.1 million.) Furthermore, only six sales at the $5 million benchmark, or higher, took place through June. Last year, there were at least 20 such sales for the full 12 months.
One area the inventory is not inadequate is the landside/off-the-beach homes for $1 million or more. About 130 such homes are listed, with about 72 of them at greater than $2.5 million. This is the heart of the Malibu marketplace in 2003. And it is where prices have increased 82 percent since 1998. That year, the median for a landside home was $708,000. So far this year, it is $1,290,000.
At the lowest ranges, especially, the burn of a hot market is most obvious. The choices of homes in all of Malibu for under $800,000 are virtually nil. While 89 homes sold in town last year for under $1 million, only 28 dealt through June. That marketplace is disappearing.
By the end of the year, when all the secret deals have been revealed, and with a second half burst, if it is to be, the total number of sales may yet tally 300. Only one year in the last five have sales of residential 1-4 units in Malibu/90265 not amounted to 300 (2001). If not a 300-sale year, combined with changing factors in the inventory and interest rates, the long-anticipated pause in price-increases may arrive. Then again, as many prospective buyers from the last few years know, that might not be the case-and they will have been priced out of the market.
Rick Wallace of the Coldwell Banker company has been a Realtor in Malibu for 15 years. He can be reached at his Web site at www.RICKMALIBUrealestate.com .