Thursday, August 6, 2009

Malibu Real Estate Business off over 90% since 2005

That's right. According to Melissa Data, looking at the month of July (YOY), sales volume has dropped a whopping 92% since 2005. Needless to say, this Westside area is getting hit the hardest. Let's take a look at the numbers:

Malibu 90265

(July 2005) 44 sales @ $1,903K avg price = $83,732K
(July 2006) 10 sales @ $2,343K avg price = $23,430K (-73%)
(July 2007) 20 sales @ $2,033K avg price = $40,660K (-52%)
(July 2008) 16 sales @ $1,509K avg price = $24,144K (-72%)
(July 2009) 9 sales @ $797K avg price = $7,083K (-92%)

Not only has Malibu been crushed in sales volume, but the average priced sale dropped 48% from last year. Perhaps the $797K average price is a result of comforming loans in California being up to 729K. Lenders are especially worried about taking back anymore high end properties. Another disturbing fact is, the amount of inventory listed. Redfin shows 428 properties for sale right now in Malibu. With a sales rate of 9 per month, that works out to almost 4 years of inventory. Not to mention, any shadow inventory the banks may hold.

Here are a few sales in Malibu that demonstrate some significant declines:

2847 Sea Ridge, Malibu 90265
3+3, 968 sqft, Lot Size 5506 sqft
Built in 1950

SOLD for $595K on 6/25/o2
SOLD fo $1,000K on 7/14/06
SOLD for $585K on
3/20/09 (-41.5%)

That's back to 2002 pricing.

Next we have what appears to be two side by side CONDOs, that are identical in size:

6474 Cavalleri, Malibu 90265
2+2, 1056 sqft CONDO
Built in 1975

SOLD for $335K on 8/18/03
SOLD for $580K on 6/21/07


6476 Cavalleri, Malibu 90265
2+2, 1056 sqft CONDO

SOLD for $205K on 5/26/00
SOLD for $225K on 7/31/01
SOLD for $340K on 2/27/09

That's a drop of $240,000K or (-41%) in 20 months, back to 2003 pricing. Do we go back further to 2001 or 2000?

Lastly, by filling out the reader's poll to the right, tell us what you think a starter home (house) in Malibu will eventually bottom out at.


Anonymous said...

Malibu is a disaster. A year or so ago I visited some homes (Los Flores to Trancas and many in between) While there are some nice homes at the high-end (>$3M), the rest were total dumps. Crappy or unfinished flips; dilapidated homes; trailers.

Plus, that PCH traffic to the Westside is terrible, and on the weekend, it's a nightmare in both directions.

The number of listings for Malibu (esp. the Western end) confirms this (see link). Yes, that over three years of inventory (excl. any shadow inventory) at current sales rates. Look out below.

Seriously, who's going to pay $1.8M for a trailer in Paradise Cove. Oh wait, it's marked down from $2.1M. What a deal!!

Anonymous said...

Malibu is a disaster? Absolutely, and while were on Malibu, what about its ugly step daughter Topanga! Some homes there on the market for well over a year, almost zero properties genuinely moving in the $800K and above selling price range. The ask price for literal shacks (truly shacks) with a little bit of virtually "unusable" land gravitate above $800K, and many well over $1 mm. One or two "motivated sellers" get with the economic reality every quarter or so, and usually those are the ones with the "gems" - cared for, nicely redone homes - but the majority with the beat up paint and patch throw togethers? Living in another world. A very very strange market indeed.

How does a lender even consider making a jumbo loan on cobbled together shacks often barely over 1400 sq. feet (including the un-permitted additions and guest shacks)? If you lose the home to fire or flood, one certainly will not have Brentwood, Palisades, or SM lot values. What's justifying the intransigent pricing? How does one ever sell such properties if they had to dump them quickly? Regardless of these issues/questions, in Topanga-land, it is still mid 2006-early 2007 in the realtors eyes (dreams). Sales down by 30%, yet not a genuine dent in asking prices. Maybe it is such a rarefied market they can just wait it out until the next decade - 2019? Truly mystifying what the agents must be telling their clients. Or is it the sellers drinking the cool aid too? Too many question, I know!

Anonymous said...

Funny about Topanga and Malibu. I guess the name "Malibu" creates images of Baywatch or something like it in people's minds. At least until they visit.

I was looking for homes in both areas about two years ago and chose to pass.

The comments about Topanga are so accurate. Even when you find a nice home (in the crazy winding area) or nicer location, chances are your neighbor lives in a swatter shack with boarded windows with a 60s area VW bus (or two) rusting in the driveway (or lawn).

Even the Ralphs in Malibu is ghetto. All the alcohol and expensive wine has electronic locks on top. (Annoying if you are trying to buy a gift without damaging the bottle's appearance.)

Sure, if you're willing to pay $5M+ and live beachside Carbon Canyon or Encinal Bluffs (and have someone to do your shopping for you), I'm sure it's great. For everyone else, it's just a joke.


Anonymous said...


Prices should fall a lot more, but will not due to government intervention.

You best come up with more hot topics otherwise your blog will continue to suffer in terms of readership and comments.

Even Dr, Housing Bubble is experiencing low readership right now.

Time to spice things up for the readers.

Anonymous said...

It is coming--see link below from a real biz source (Bloomberg):

Anonymous said...

Govt is pulling every trick in the book but it hasn't helped housing here in California. Don't kid yourself anon 9:16, California prices should and will fall much further. The fundamentals will outlast any govt tricks. Fed is more worried about deflation than inflation right now. Trying to inflate it's way out, but it's not working.

latesummer2009 said...

The results from our reader poll are in:

Price of a Malibu Starter House at the bottom is:

$300K - $399K (29%)
$400K - $499K (21%)
$500K - $599K (21%)
$600K - $699K (9%)
$700K - $799K (11%)
$800K + (7%)

1/2 of those polled believe a starter in Malibu will be under $500K. That appears to be a safe bet.

Anonymous said...

Your point is correct, but your math is wrong...44 to 9 is not 92% decline...

latesummer2009 said...

Anon 6:20

Sales Volume is calculated with the total number of dollars transacted, not the number of sales. Therefore:

(2009)$7,083K / (2005)$83,732K =.08
1.0 - .08 = .92 or 92%

Throw in the number of sales just for good measure:

(2009) 9 sales / (2005) 44 sales = .20
1.0 - .20 = .80 or 80%

An 80% drop in the number of sales on top of a 92% sales voume decline is unheard of!

I believe your math is wrong and you have proven my point even more. God forbid, if you are a realtor......

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