Malibu home prices inched upward in 2013

An increase in the median price of a home sale to $2,330,000, Malibu home values bumped upwards 3.5 percent in 2013

With an increase in the median price of a home sale to $2,330,000, Malibu home values managed a 3.5 percent bump upwards during 2013.

As such, there has been about 16 percent in home values recovered from the devastating crash that Malibu, as well as all real estate environs, experienced during the meltdown of 2009-2011.

Two hundred and fifty nine sales of homes in the 90265 zip code also represented a modest increase in total units sold.  Including transactions that were recorded in public records but were hidden from Multiple Listing Service exposure, the 259 homes sold amounted to a handful more than in 2012 (252), and about 100 more than sold in 2011.

Even with the encouraging news, for homeowners at least, of incremental improvements in both prices and units sold, there is a long way to go before the market is fully recovered from its 2008 peak.  It was in that year that the Malibu market experienced its last gasp from the 1997-2008 boom in values, and the median price of a sale was $3,250,000.  Values remain 28 percent below that lofty level.

The median value is the point where half the home sales were higher and half were lower.  Thus, the 130th highest deal of the 259 last year was the one that determined the median value.  It happened to be a three-bedroom home on less than an acre on Point Dume, in a prime spot across the street from expensive bluff estates.

During 2012, there was an extraordinary explosion of sales in December that mightily increased the total sales for the year and ended a six-year run— 2006-2011—of home sales less than 200 units.

Last month, a burst of a different sort occurred:  Higher-priced home selling much more prevalently, nudging the median value up to a higher mid-point.  For most of the last year, it appeared the statistical median would be virtually the same as 2012, as the median usually languishes around $2,250,000 for most of the year.

During 2012, there were 33 homes sales less than $1 million.  Last year, there were only 24.  And 2014 may bring less as a thinning inventory of the lowest-priced homes confronts prospective buyers.

Contrarily, 2013 saw more deals over $10 million.  There were 16 such mega-deals compared to 12 during 2012.

These statistics exclude the sales of condominiums, mobile homes and vacant land.  As it was with homes only, the volume of value traded was $973 million.  Malibu has never experienced $1 billion in total home sale volume.  Last year was a new record.

The average price of a sale, thus, was about $3,759,000.  That was a 6 percent increase from 2012 (when the average sale was $3,539,683).  It should be noted, however, that year 2013 began with the two largest transactions in history.  An Encinal Bluffs estate recorded sold on Jan. 4 for $74.5 million and then a Paradise Cove estate sold in February for $42.5 million.  Without the boost from those two deals alone, the average would've actually dropped for the year.

More evidence that values ticked upward during 2013, however:  The median price of a beach sale went from $6 million in 2012 to $7,157,000.  The median price of a home on the land side increased from $1,753,000 in 2012 to $1,925,000.

Last year was worse than 2013 in two ways that are related. First, the number of beach sales went down last year. Second, the number of overall deals over $5 million also dropped.

As far as beach homes closing escrows, only 46 did so in 2013 compared to 59 in 2012. Last year's Malibu volume, in fact, was slightly heavier from sales that were on the land side rather than homes that are on the sand or on the bluffs immediately above the sand.  Not so during 2012, when 52 percent of the volume was from the beach.

While the number of beach deals dropped from to 59 to 46, the land side units increased from 183 to 213, so the heart of the marketplace was clearly healthier in 2013.

Nevertheless, $5 million or more exchanges went from 54 during 2012 to 47 in 2013 (even though, at $10 million-plus, they went up).  The strain of tight lending policies may be responsible for that pause in activity in the more luxurious tiers.

For the whole market in Malibu, in fact, a lending environment that causes many all-cash purchases has had a critical impact on what prices are doing currently.  With the traditional, reasonable lending standards and flexibility that used to exist (up until the free-lending rage of 2001-2006), Malibu home prices likely would be much higher, by reflecting a far greater surplus of "qualified" buyers than we see today. Malibu prices remain 28 percent below their peak due mostly to tight financing.

Even so, the prospect for yet higher prices during 2014 is plain to see.  Just as the number of buyers has steadily increased the past two years, the number of homes for sale has steadily decreased.  The inventory of homes available now is starkly different than the meltdown period.  During the summer of 2012, nearly 250 homes were listed for sale in Malibu; that tally was at about 215 during the high-point of the 2013 summer.  This month it is about 160, the lowest inventory level since 2007.   The pressure is on buyers to pay more while demand has increased and supply has decreased.