I have been writing real estate articles in the local Malibu newspapers since 1993, and rarely has it been more difficult to predict where the market is going!
Why is that? As you may have read in my articles in recent months, or otherwise interpreted between the lines of my comments, Malibu real estate is rock solid stable. We have never seen anything like it – at least in my 29 years as a REALTOR.
It has been about 3 years now that sales and prices have been unwavering and steady. There is hardly a bump in the trends. No unmistakable hints on what values may be doing!
I have called it the “balance beam’ phenomenon. The charts look like a very solid beam of wood, virtually parallel all the way.
What a contrast to my first 25 years in the business! Which was characterized by notably up (or down!) markets; Plentiful distinct clear trends of increasing or decreasing sales or prices.
Nevertheless, I will take my chances on a prediction for 2016: It will be a good year for prices. Flying solo, with little factual data to back me up, I think prices will rise up to 10 percent, due to three factors:
1. The momentum continues of a market that is in recovery. Part of the market seems to want to burst ahead. Unfortunately, it is held back by a non-traditional influence: lending practices tighter than ever. Meanwhile, the median value of a home still remains about 17 percent below what it was at the top of the 2005-2008 market, when median values briefly hit $3.2 million. The impetus seems to be going up, just lacking the herd mentality of “bubble” markets. There is a macro momentum in play.
2. My research shows that election years do better than the years before and after. That has been a general rule over the years. It seems there is hope, no matter what side of the political aisle that you stand, that things will improve with the next administration. Thus, investors seem more willing to take a chance on prices in an election year. Prices went up more during 2004, 2008, and 2012 than they did in the adjacent years of 2003/2005, 2007/2009 and 2011/2013.
3. Increases that should have come in 2015 may have lagged into this year. The inventory was very low last year and normally, I would expect price increases of at least 15 percent based on the inventory levels we witnessed. During 2014, when inventory was not quite AS LOW, prices DID increase 16 percent. It is a mystery why the healthy market last year did not bump up higher. I think the answer may be there was a delay. We will feel the dynamics of the supply/demand stall go into 2016, and then catch up.
Normally, I can confidently state a prediction about what the market is doing in Malibu. Subtle hints, which I have measured over time, help me see the future – at least 6 months in advance. This market, with fewer hints, is more challenging.
Nevertheless, I will go with the factors above and predict healthy appreciation in Malibu home prices this year.
See my articles in the Malibu Surfside News for the most accurate and up-to-date information on Malibu real estate.
Thank you, as always, for reading