for an American adult is about $28,000 per year. That means the average worker needs to work about 36 years to earn $1 million. If the subject is buying real estate for $1 million, only a tiny fraction of America is financially able to purchase a home for more than $1 million.
Then there is Malibu, where only a tiny fraction can find a house below $1 million. Such a product, a single family home in the 90265 zip code, is almost extinct. Few benchmarks more powerfully convey the strength of the local real estate market in 2015 than this: At this writing, only one home in all of Malibu is available for sale at below $1 million. It is located in the Decker Canyon area at a recently reduced asking price of $995,000.
Three other such listings are in escrow.
1998 was the last year that the median value of a home in Malibu was less than $1 million. In the years since, as the values have soared upward locally, $1 million properties have steadily declined, virtually disappearing in 2007-2008 when the real estate market was at its apex. Just as the $500,000 home disappeared in the roaring market of the late 1980s, the $1 million sale almost evaporated seven years ago. Only five such deals transpired during all of 2007-2008.
The Malibu market proceeded to plummet about 45 percent, and “lower-end, affordable” got back to six figures. Apparently, seven figures may be a permanent requirement in the near future.
Eight homes have sold this year under $1 million, at this writing (besides the three in escrow) such deals are still happening. The point is they may not last.
As it is, the $1–1.5 million range is running dry. Only six such listings are breathing in that broad spectrum at this writing, (three on the same street in Corral Canyon). You can buy 40 cars with $1 million. Nice cars, too. You can take 100 luxury trips to Europe, or anywhere in the world, practically traveling the rest of your life. You just can’t buy a house in Malibu.
The condo market offers some opportunity, at least. Fifty-two condos in Malibu have sold as of this writing, 29 of those sales have been below $1 million. That includes all sizes and types of units, in all places within the 90265 ZIP code, on the beach and off. The median keeps inching upward but has not surpassed $1 million. (The median price is the point where half the sales are higher and half are lower). During three prior years, 2006-2008, the Malibu median price of a condo was indeed north of $1 million and it appears to be heading that way again now, just not yet in 2015.
Four homes have traded for less than $800,000 in Malibu, but all required some compromise by the buyer to get that price. Most recently, a three level A-frame home in Latigo Canyon joined that club, but the house was almost stripped to the studs and needed considerable funds to become habitable. Nevertheless, three potential bedrooms, a tiny peak of ocean view and more than half an acre was had for $765,000. A one bedroom home, with major work needed, sold in Decker Canyon for $775,000 a few months ago.
Sometimes, a random house in Malibu gets identified with distinction as a trend-setter in local real estate. The house in Decker Canyon listed at $995,000 unwittingly gets the title, Last House In Malibu Under $1 million. Going once, going twice.
That may be an overdramatizing, of course, as dozens of homes in the 90265 ZIP code remain with a true market value under $1 million. The question is which ones may hit the market, and when. Some will surely sell in six figures in the months, perhaps years to come. But just as a $100,000 home in Malibu was once unimaginable and then ultimately extinct, so it is with $1 million homes. Soon, the Malibu median price will hit three times that level. By the time the factor rises to 3.5 or 4 times higher, the under-million dollar home in Malibu will be a thing of the past.