Demand for Malibu Stays Strong: Mid-Year Report

The Malibu Real Estate Report

Through the first half of 2018, Malibu real estate is almost an exact replica of last year, which is great news for local homeowners and local real estate brokerages. The mimicking of statistics from 2017 means demand is strong and prices are holding steady.

Even though the first quarter of the year produced only 49 closed escrows (on 90265 single-family residences), the tally was 69 during the spring quarter. As such, the past three months have been as busy as any recent times, even as news from West Los Angeles sounds less upbeat. One hundred-eighteen sales at the mid-year point keeps the pace of the past six years virtually the exact same. Malibu continues an amazing run of steady sales unit production that has not wavered since 2011.

Thanks to record-breaking individual estate sales continuing into this year, the sales volume is aiming for an all-time high, surpassing even 2017, when it went to new stratospheres. Nearly $800 million has been sold so far this year, compared to $1.47 billion all last year. That averages out to $6,732,000 per sale price.

There is a caveat, however. Just four mega-blockbuster sales account for one-third of the entire volume noted. Those four deals, accounting for about $275 million total, are nevertheless valid indicators of market strength. Had they not occurred, however, the outlook of the real world looks less rosy. 

As it is, the median price is floating slightly lower than last year, when it set a new record at $3.65 million. For the 118 deals this year, the middle point, the 59th and 60th highest sales (which defines the “median”), have both been $3.4 million. That may be cause for alarm. Or, maybe not.

That $3.4 million amount represents a drop from last year, but the median has been moving up. The first part of the year produced more lower-priced sales than lately, and the median through March was only $3.1 million. Higher-priced transactions in the second quarter are pushing the median upward and it could easily top last year, and perhaps reflect a 5-10 percent increase when all is said and done. Based on current market conditions, that would not be surprising.

Analysis of market conditions includes a close look at the inventory levels. After all, if there are many houses to choose from, buyers can be stingier in negotiations and pay less money. In such a “buyer’s market,” prices will drop. But current numbers hint at a slight “seller’s market” remaining, as about 231 homes are currently listed in the June tally. What was the June inventory count in recent (strong market) years? 2013: 216; 2014: 205; 2015: 182; 2016: 226; 2017: 236. By historical measurements, the inventory would yet need to rise in Malibu 10-20 percent before downward pressure drove prices down.

Through just six months, the year is already highlighted by a record-tying sale of $85 million, followed by an even higher $110 million, the highest sale of the year in California so far. The rest of the high-end figures are adequate. There have been 39 deals in Malibu over $5 million, compared to 92 last year, with 15 transactions at $10 million—33 last year. And six sales over $20 million keeps the same one/month pace of last year, which saw 12. The fall off is minor. 

If the $6.7 million average sale price holds (which it may not unless mammoth sales continue to weigh, it upward), it will beat out 2017 when a record $6.2 million average was established. The average was “only” $4.7 million in 2016, so a 42 percent increase in two years is the current marker. That particular fact is offset by the more reasonable change in median price, however. The $3.4 million median price currently compares legitimately with the median of 2015, which was $2,734,000. As such, a 24 percent increase of values in the past 30 months is a very accurate depiction of the market.

Two indicators may be early warning signs that a slowing trend could take hold before long: The sales tallies of Pacific Palisades, Santa Monica and Brentwood had 382 sales through the first half of last year. So far in 2018: only 330 sales. Those areas often preview Malibu’s production. Furthermore, condo sales in Malibu can be hints to the future. Last year at this time there had been 31 sales. So far in 2018: 30 sales. The small drop off in total units sold described in many ways herein may become the larger story as the year goes on. Or, maybe not.

These statistics reflect results for one- to four-unit single-family residences in the 90265 ZIP code, excluding condos and mobile homes, which run on similar graphs. All sales from the local Multiple Listing Service plus numerous searches of public records for “quiet” sales are encompassed in the tallies. All transactions, except perhaps a handful of secret sales not yet uncovered, are captured herein.