There are not a lot of places in the world where a category of real estate is considered “average” in the $5 to $7.5 million price range. For Malibu’s beach properties, that is indeed the average range, at least in these times.
For certain, some beach cottages on our shores can sell for $2 million or less. Then there are the $10 million blockbusters on the bluffs and sand, where seven properties have traded since the beginning of last year. For the most part, though, the typical Malibu beach house on La Costa Beach, or Malibu Road, or even Broad Beach, is between $5 and $10 million.
It is the lower half of that price tier where sales have been gangbusters during 2012. Already, 17 homes have sold between between $5 and $7.5 million, compared to only four such sales in all of Malibu last year. At this rate, there will be an 800 percent increase in sales in that market segment this year.
Apparently, there is enough belief the market has bottomed among the bigger players to jump back into the Malibu beach market, which has historically performed better than local land-side homes and possibly as well as any other real estate product in California. For those financing the purchase, super-low interest rates don’t hurt. With prices about 35-40 percent off the peak, these are the days many beach buyers have been waiting for. The rest of the market has been buoyed by greater activity, but nowhere as pronounced in recent months as the “mid-range” beach home.
At the halfway point of 2012, La Costa Beach has hosted four sales, including a deal that was just under $8 million. One has to go back to 2005, when six homes sold all that year, to find similar performance.
Malibu Road beyond the Colony has benefited from five such sales, including one just below $5 million, with one other in escrow at this writing.
Broad Beach had two homes right next to each other sell for $6.5 million each. (Perhaps the prices are just irresistible. The two homes, comprising a stunning 175 feet of beach frontage, combined, were originally listed together for over $40 million).
Homes on the beach along Encinal Bluffs, on the bluff of Point Dume, at Las Flores Beach, Malibu Cove Colony and Latigo Shore have all been part of the party.
There is strong contrast to previous times. During last year’s snail-paced market, one sale each at Broad Beach, Sea Level, Encinal Beach and La Costa Beach was all that occurred for the whole 12 months in the $5 to 7.5 million range.
Such sales are responsible for many positive statistical tallies in Malibu. This year has already edged all of last year for total beach units sold at any price (27 total, at this writing, have closed escrow). Also, total sales volume in the 90265 ZIP code is on pace to hit about $650 million, or about 30 percent better than last year’s dismal $450 million tally. Generally, as beach sales goes, so goes the local industry.
Beach sales represent about 25 percent of the selling action this year, another indicator of a more confident market. The exchanges of bluff and beach homes for all of last year were about 16 percent of the market share.
Even with the uprising of beach commotion, prices in general are not moving much. The median for Malibu in 2012 (the price in the middle of all sales where half have been higher and half lower), about $2.1 million, is roughly the same as last year, indicating that all price tiers are trying to stabilize from the long descent. All $5 million-plus sales, including properties on the land side, have now equaled 2011 (24 for all of last year, 24 so far this year), but residual downward pressure in lower price ranges has quickened the sales pace there, as well. Virtually the whole wide spectrum of price levels in Malibu is stabilizing in price and activity. It can be said, in fact, the new zeal of beach sales may not be all that unusual—except perhaps as a contrast to last year’s horrible performance.
Nevertheless, the average sale price (of all dollar volume, divided by the number of sales) has crept just above $3 million thanks to the beach market, whereas last year it was under $2.9 million.