Rick Wallace / Special to The Malibu Times
As reliable as the sun rising over LAX and setting toward Oxnard, the Malibu real estate market can count on one trend: However many houses are on the market in January, it will grow to a higher number in July.
It happens every year. Many potential sellers keep their homes off the market during winter months and then put them on during spring, with the peak of inventory coming in July or August.
More uncertain is the month-to-month changes. Frequently, as patterns established over the years demonstrate, the change in total homes listed from one month to the next is moderate and predictable.
That was not the case in February. Last month saw an unusually high increase in listings, far more than typical. The number of active listings in Malibu went from 236 homes during January to 260 in February.
By comparison, recent years had this outcome: January 2008 had 142 homes for sale; February, 157. January 2009 had 210; February, 218. January 2010, 230; February, 230.
The sudden 10 percent increase of inventory is very rare. Only in January-February 1996 (268-297 homes for sale) has there been an equivalent leap, as well as March-April 2006 (140-160).
If the recent adjustment parallels 1996, it could have important implications on the Malibu market. That year, coming toward the end of an exhausting period (1991-1996) of stagnant or lower prices, saw the inventory continue to balloon to a high of 367 homes, far outpacing demand numbers that year.
It may be there are two types of “shadow” inventories looming over Malibu. The more familiar one, mentioned often in the media, is that of the banks taking on foreclosure properties, or preparing to. The market awaits yet more REO (real estate owned by the lender) properties once many of the current mortgage deficiencies are processed.
Secondly, however, may be standard homeowners; the aggregate of individuals who just wish or need to make a move. Resignation and acceptance of current real estate values may be afflicting individuals who have been trying to time the market. Many folks have grown exhausted with their status quo. Prices be damned, it is time to move on with my life, seems to be the growing reflection.
The number of listings in February (residential property of one to four units in the 90265 ZIP code) uses a count exactly as made every month since mid-1994. At 260, it is not only more than any other February since 1999, it is also about the same as last June. 2011 already has a four-month jump on last year’s supply levels.
Some new sellers may have hit the market and feel it is a better time now to try to sell.
They postulate: buyers are more anxious to strike; prices are finally going up; market times are shorter.
The truth: possibly; false; and false.
With regard to market times, they have stabilized in the 10-month range. That is, the average listing is on the market through the close of escrow for 10 months. It has been at that echelon for about a year. That period only includes the most recent marketing effort with the most recent broker-often, several years of effort with various brokers are also part of the pact.
REO sales will bring marketing times down, but short sales still drag out many transactions. The latter is more prevalent, currently.
Meanwhile, it is considered very likely that the number of sales will increase this year over last. That is the general trend of the last six months of 2010. With prices about 40 percent lower than the peak, buyers are, indeed, possibly more willing to strike. The California Association of Realtors predicts increased sales this year, at least throughout the state.
The hope for the much-sought revival of values depends on demand catching up to-and surpassing-supply. Chances of that happening this year have been dimmed, however, based on early returns. In fact, the opposite has been true: sales have started at a mediocre pace; the jump in listings has only expanded the gap.
Just as the February listing boom was unpredictable, the next development may be also. Perhaps sales will surge ahead in the spring? Or perhaps inventory will top 300 sooner than later and cast a darker cloud over local prices? At some point the paths will cross, demand topping supply. Buyers hope that day comes yet later, resulting in yet more salivating values. Sellers, many already strained, hope the competition just stays away.
Rick Wallace has been a Realtor in Malibu for 23 years.