The good and bad of Malibu real estate

Mayor Jefferson Wagner cuts the ribbon last week Thursday, marking the official opening of Trancas Canyon Park. Photo by Dana Fineman / TMT

The Malibu Real Estate Report / Rick Wallace

Common wisdom holds that the short-term and long-term effects of a specific subject are often opposite. Life abounds with examples of a short-term endeavor that produces negative results, only to turn positive in the long run. And visa versa.

Malibu real estate has been an example of such a dichotomy. You want to see poor results and great results from the same commodity? Malibu real estate has been horrible in the recent past, but amazing over the long term.

The two adjacent charts trace how prices can go in very opposite directions. First, the bad, the listing histories of actual homes sold in Malibu, show often long and arduous descents in value to final sales prices. The second chart, the good, show how homes in Malibu, which have sold at least four times during the past 20 years, have enjoyed stunning appreciation.

The statistics stem from a continuous tracking of every home that has been listed or sold in Malibu the past 20 years. Multiple Listing Service records further provide the asking price histories of homes displayed that actually sold in the past three months. Public records confirm sales histories of the homes identified as having sold at least four times since 1990.

In the Listing History chart, these are the success stories, homes that closed escrow in Malibu during April through June, having beaten their competition. Yet, for the great majority, the date first listed is often well before the date it finally sold. The original listing price is often levels above what the final sale price was. Only a handful of homes sold never needing a price reduction. The prices in both charts are read as $000s. That is, if 2,495 is described as the price, that means $2,495,000. For example, in the Listing History chart, the home in Malibu Knolls was first on the market in September 2006 at $2,495,000. It had subsequent price reductions (as well as periods off market, in some cases) to $2,250,000, then $1,995,000, then a new listing in February of this year at $1,495,000, finally selling in June at $1,362,000.

Anguishing market battles are revealed. One homeowner, in Trancas Highlands, originally listed their home for about $5.5 million, kept increasing their price all the way to about $6.8 million in January 2009, only to ultimately sell in April for $3.3 million.

The Huge Appreciation chart is a list of all the Malibu homes with bona fide sales at least four times since year 1990. Not all the sales were in the MLS, but all were publically recorded. The year of the sale is described as the last two digits, such as 90 = 1990. Again, the prices are described as $000s, such as the Las Tunas Beach house listed first had sold in 1991 for $1,275,000. The same home sold for $4,300,000 in 2006. Almost every home listed has enjoyed multiple increases in value (though upgrades to the property are unaccounted for). Three homes have sold six times: A home in Serra Retreat went from $1.1 million to $6.5 million in 15 years, 1994 to 2009; a Latigo Canyon home went from $560,000 to $1,575,000 during a similar 15-year period. A Broad Beach bluffs house went from $1,775,000 to $5.7 million last year (after selling higher in 2008).

If you are a seller facing a short-term challenge of beating the competition, the reductions in asking prices can be daunting. If you are a buyer looking for a long-term investment with potential, Malibu’s history is beyond fabulous. Such is the contrast of Malibu real estate today.

Rick Wallace has been a Malibu Realtor for 22 years.