Malibu Real Estate Report


2005 median home value rises to $2.5 mil

By Rick Wallace / Special to The Malibu Times

Prices still increasing by year-end.

Despite a year of fewer sales, Malibu home prices posted robust gains as the median value during the year centered at exactly $2.5 million. Nearly $1 billion in real estate sold during the year, for homes alone, on the strength of 252 home sales.

The median price rose 14 percent from 2004. Notably, values were clearly rising throughout the year, particularly at year-end, when popular sentiment assumed otherwise.

Again powered by huge transactions on the beach, bluff and major estates, Malibu engineered stunning results for the fourth year in a row. The average transaction price, $3.772 million was more than 26 percent higher than the average of 2004, as 54 local properties topped $5 million in sale price.

While the prevailing media and public opinion toward year-end assumed a slowing trend, no such reality was occurring in Malibu. The number of closed transactions from September through December was the same as the first four months of the year, but at much higher prices. The final 77 deals of 2005 were at a median value of $2.950 million, indicating plentifully huge sums of money still pouring into the marketplace. The inventory, meanwhile, has remained at extremely thin levels.

The chart below shows the steady rise of values for the past four remarkable years, with an additional emphasis on each phase of 2005. The numbers represent residential units, excluding condominiums and mobile homes, with a 90265 ZIP code.

Most conspicuously, perhaps, was the commanding sway of beach and bluff estates (properties immediately adjacent to the sand) on the Malibu market during the last half of the year. About half the volume came from sales of the most elite properties, an unusual circumstance. From May to the end of 2005, the mean average price of a beach sale was at least $8 million, and by the end of the year it was topping $9 million.

The median price of beach sales has risen from $2.9 million in 2002 to $6.6 million in 2005. The median price of all Malibu sales, $2.5 million, is an increase of 77 percent since the end of 2002, when it was just more than $1.4 million. The median sale price on the beach was $6.6 million for the year, and heading steadily upward. The right side of the chart breaks down the steady rise in prices throughout 2005 and the symmetrical performance of the market. Seventy-seven homes closed escrow during the first four months of the year, 98 during the middle and 77 during the final months. The only fault in the year was the drop to only 252 total homes sold, while each of the past recent years had hefty 300-plus results in total sales. Nevertheless, more money was spent in 2005 than ever, at nearly $1 billion (the final total was $950,670,000). Including the condominium, vacant land and mobile home markets, it was well above a billion-dollar year.

The average price for a home sold in the last third of the year was $4 million. Five sales topped $15 million in 2005, with $25 million for a home on the Paradise Cove bluffs being the highest sale.

Inventory levels dropped in January to levels not seen since the previous August; at 126 homes. Only three percent of all the homes in Malibu are listed for sale. Until sale results drop significantly below the rates seen throughout 2005, and/or the number of homes for sale rises noticeably, it is illogical to assume prices will decrease.

While the rest of the Southern California region seemed to score most of its price increase at the start of the year, Malibu was more consistent. The average and median tallies were anchored by the performance of the market from May to August, when the four-month average and median mirrored almost exactly the year overall. The median of all May-August closings was $2.497 million, virtually the same as the median for the year. But that period was clearly better than the first third of the year (the median having risen from $2.2 million in 2004 to $2.38 million by the end of April) and equally inferior to the final third of the year. Both the beach and land-side averages showed steady increases at each four-month interval.

The statistics herein are resulting from extensive research into Multiple Listing Records and public records of every home in Malibu. While an increasing number of sales are kept as secret as possible, certain public records provide an indication of sale prices whether properties were listed or transferred in a private arrangement. While a trickle of 2005 sales may yet be uncovered, the numbers here represent a complete picture of the year.

Should there be a pace of less than 77 home sales per four months, the Malibu market may begin to feel the predicted slowdown. Combined with escalating inventory, prices may finally level off or drop. For the time being, however, Malibu seems partially insulated from the regional slowing. With more than one-fifth of Malibu’s new home buyers willing to shell out $5 million or more, the market has kept driving forward.

Rick Wallace of the Coldwell Banker company has been a Realtor in Malibu for 18 years. He can be reached at his Web site,