Real Estate Report: Malibu home prices stubborn in 2015

Ultimately, one statistic defines an entire year of real estate activity in Malibu.

Despite the thousands of inquiries, showings, and offers, and the hundreds of sales, what really defines a year is the median price result.  It is the median price of all the sales that most expresses how well a year performed.

After a median value of $2,655,000 during 2014, the median hardly budged last year, landing at $2,715,000 in Malibu.

The $60,000 increase last year represents only a two percent bump in values for the year.

As such, the results for 2015 were something of a disappointment.  Values increased during the year but much less than would’ve been expected.

The median price, the most frequently-cited performance gauge in real estate, is the point where half the sales were higher and half were lower.  It represents the aggregate picture of all price ranges. It values every sale equally.

Perhaps more sobering is this fact:  only once in the past nine years has the median topped a 10 percent increase; it used to be commonplace for that to happen in Malibu.

Is local real estate poised to rebound to days when yearly ten percent jumps were typical, or is Malibu trapped in a new era of tight lending practices and an uninspiring economy?

The next most important statistic each year is the overall average price per sale. Though strongly influenced by several mega-sales, the average sale price for the 243 sales in 2015 was $4,596,000 – a modest 6.7 percent increase over 2014.

Furthermore, the number of sales was the least of the past four years, though that will be mitigated as a handful of secret sales from last year gradually come to light.

The adjacent chart summarizes the home market (excluding condos and mobile homes) for the entire real estate zone that includes 90265 ZIP codes, essentially from Topanga to Deer Creek in Ventura County, and to the top of the mountain all along the Malibu coastline. It includes sales known via the Multiple Listing Service, as well as bona fide secret deals that reveal in public records.

The final result was disappointing for this primary reason:  Throughout 2015, inventory of available homes for sale was very low compared to traditional levels.  Normally, low inventory levels provide an upward push on prices.

An example of inventory levels follows.  During January, from 2009-2012, the inventory was over 200 homes; last year in January, it was 152. Almost every month during 2015, the supply of homes available was tighter than any time since 2006.  Nevertheless, the market did not respond.

Why not?  The answer lies with demand, clearly not as powerful as many market-watchers might have guessed.  What was transpiring with prospective buyers?  Heavily cash-laden in nature, tip-toeing through an economy less than robust, the typical buyer was more cautious than fiery last year.  Multiple offers did not scare buyers. In fact, worthy buyers were questionably available.

Malibu market report - 2015 Malibu residential real estate home prices sales summary compiled by Rick Wallace.

To emphasize the trend noted above, only one in the past nine years has seen 10 percent increases.  The ten years before that saw such increases EIGHT times.  The market gave and the market has taken away.

There are more examples of the price hesitation last year.   Land side home sales, those that are not on the beach or bluff directly above the sand, barely changed values, also.  The median price during 2014 of land side sales was $2,289,000.  In 2015: $2,317,000. It was merely one percent higher.  The very heart of Malibu real estate barely changed in value.

Things are not getting worse, by any measure. Note the fewer sales under $1 million; and high-priced sales improved slightly.  If anything, the Malibu real estate market screams stability, as I have reported many times in this space this year.  Volume for houses has topped $1 billion three years in a row.  If stability was the goal, it has been profoundly achieved.  

Predicting the future is more uncertain under such conditions.  Six months from now, will unlikely bring much alteration while the market hums at its current hard rate of consistency.  How the results appear in one year, and what the mighty median value may be end up for 2016, is anyone’s guess.