It’s accepted as normal that the permitting process to build a Malibu house will take more than two years. Normally, the lead paragraph of a real estate article is not so peculiar.
What is “normal,” anyway?
Malibu real estate has been anything but “normal” for many years. It was either going gangbusters, prices rising by a high measure during 1998 to 2006. Or, during the past six years, it was miserable, with prices falling more than typical. 2012 may be different. Indications suggest this may be, hark, a normal year.
Take prices, for example. Last year, the median price of a home sale was about $2 million. This year, it is about $2 million. Statistically, for the whole of the 90265 ZIP code, regarding single family homes, prices are generally stable. Nothing like 2004 when the median jumped 31 percent in one mind-blowing year. Or 1999 when it bolted from about $800,000 to $1.1 million, about 37 percent higher. Or, last year when only a 13 percent plunge felt lucky.
If “normal” means that prices are about what they were last year, 2012 qualifies, so far.
Consider, also, the pace of sales. Abnormally normal, indeed. The average number of home sales for Malibu from 2002 to 2011 was 212 per year. But in only one of those years was the tally actually in the 200s. From 2002 to 2004, bountiful sales produced sums over 300 per year. However, every year since 2006, it has been below 200. Only in 2005, as the market was beginning to transition, were the 256 sales about the norm. 2012 is projected, however, to see about 215 sales, with momentum picking up.
Instead of a distinctly seller’s market or buyer’s market, the activity these days reflects neither one. There is an abundance of homes selling quickly, and many getting close to asking price. But sellers can’t relax, either. Results for the past three months indicate that listings that closed escrow had been for sale nearly a year and a half from their first appearance on the market. That was the median average of market time. Prices are not rising, and the weakened market is far from fully healed. While buyers have to be progressive and aware of rapidly increasing competition, sellers need to be as price-realistic as ever.
The numbers bear this out. First, consider that in June 2004, about 140 homes were listed for sale, while Malibu was destined to see 305 total sales that year. Contrarily, last June saw 315 homes marketed, while purchases were pacing to about 160 total deals for 2011. Both years were heavily imbalanced between supply and demand. Currently, about 230 homes are for sale, similar to the year-end anticipated sales total. It’s a fair fight, finally. For the first time in 20 years, the inventory average and sales totals will be similar. (Even in 2005, during a normal sales pace of 256 closed transactions, never were there more than 150 homes listed, and thus, a rising price market was still in effect.)
The number of sales is clearly going up. The number of homes listed for sale is clearly going down. When do the lines in the graph cross? It looks to be happening about now.
One other aspect of the market, revealed over the past few months of sudden reverse-course: All price tiers in Malibu are active, with no great discrepancy from one end to the other. For much of the past several years, Malibu has been many mini-markets seemingly unrelated. During 2008, low-end houses couldn’t sell at all, for example, while huge beach and estate deals were plentiful. Just the opposite took place in 2011. But now, while the lower-end of home prices is very busy, the upper end is about normal, or at least better than last year. More $5 million-plus and $10 million-plus deals are certain to close this year than in 2011.
It all adds up, predictably, to a standard year in overall volume. At least, if you look at the averages. Between 2005 and 2011, the average volume for a year of Malibu/90265 single family home sales was about $687 million. Nevertheless, only one of those seven years actually saw volume in the 600s (that is, in millions of dollars, which was in 2010). This year is projecting to near the average. Nothing particularly fabulous, but nothing horrendous either. A fair fight indeed, and a rare interval of harmony and stability to the Malibu real estate marketplace.