Prices remain firm in most neighborhoods, despite a dramatic reduction in the number of sales.
By Rick Wallace/Special to The Malibu Times
The economy is officially in recession according to the National Bureau of Economic Research. However, you wouldn’t know that by one indication of trends in the local real estate market.
Observe the sales list during one recent seven-day period:
A home listed at $859,000 sold for $845,000. A beach house asking $1,495,000 sold for $1.5 million. A house in the hills, listed at $659,000, sold for $615,000. On Point Dume, a new listing at just under $1.7 million, sold for $1.65 million. A $595,000 listing got $580,000. A foreclosure priced at $359,000 traded for well over $400,000.
When they sell, they sell close. That is, most Malibu homes sales remain within one key trend of the hot 1997-2000 marketplace, getting close to asking price.
As a result, virtually every neighborhood in Malibu has held firm on its value. A survey of all the sales of single-family residences in Malibu through Nov. 15 shows that average sale prices are higher than last year, or at least as strong.
This is despite a dramatic reduction in the number of sales. Only 200 homes have sold in Malibu this year as the calendar winds down. The year will end with a 35 percent drop-off in the number of homes sold and dollar volume, approximately.
There are two primary reasons why values are holding despite a shift in the supply and demand dynamics, and the uncertain economic and terrorist climate.
Low interest rates are more than alluring. They make homes more affordable. The lowest rates since the 1960s allows buyers to spend more-and negotiate more liberally, apparently, than might be the case otherwise.
One point of interest rate affects payments on a home loan about 10 percent. Home values now are about the same as last year, but mortgage costs are at least 10 percent less.
Secondly, choices remain slim for buyers. A low inventory, particularly under $1 million where the action is, keeps purchasers hungry at the plate, willing to get the deal they can when they can.
In effect, the current market in Malibu is in a price stale-mate-many fewer buyers; few sellers to begin with.
By one measure, Malibu features 50 neighborhoods of distinctive personality.
Though the pool of sales is a handful for most, the average price in 34 of them is higher than in the year 2000.
Neighborhoods with at least five sales this year and last, that show mean average increases this year, are: Big Rock, Sea View Estates, Rambla Pacifico area, Corral Canyon, Ramirez Canyon/Mesa, Cavalleri, Point Dume, Zuma Bluffs/Bonsall and Malibu Park.
Prime market indicators have been consistent throughout the year. Sales started slow and stayed that way. Particularly on the beach, the number of sales has been half of last year. Thus, sales of more than $2 million have decreased drastically this year.
The median average price of a home (the point where half of listed homes sell for more and half for less) has drifted downward to about $1,100,000.
That is more than 10 percent less than 2000 and about the same as 1999.
Technically, Malibu homes have lost value. In reality, that is not the case.
The key fact is that lower-priced homes have sold while higher-priced ones have not. Because lower-priced homes have sold more, the averages appear lower.
Homes that are reselling are getting as good or better prices than before.
Rick Wallace of the Coldwell Banker Company has been a Realtor in Malibu for 14 years. He can be reached at RICKMALIBUrealestate.com.