The Woolsey Fire in 2018 created a rare opportunity in Malibu. Historically, building in Malibu has been a challenge now for some time and only keeps increasing in difficulty. When the fire came through Malibu and destroyed well over 400 Malibu properties, two things happened.

First, properties that otherwise never would have traded suddenly became available. Landmark homes and old Malibu shacks alike were lost, and many have already decided that the time and cost of starting over is not for them. Secondly, these fire-affected properties were granted rights to an expedited permitting process that allowed for a 10% size increase. Instead of a 3-year process fraught with expensive studies, individuals are given the freedom to replace what was there and do so in 6 months to a year.

By the Numbers

It has been over a year since the fire and as of January 30th, 2020, 61 building permits have been issued. Meanwhile, 54 lots have been publicly listed for sale.

Of these lots listed for sale:

• 24 remain actively listed at an average price of $1.38 million
• 19 active listings are outside of Malibu Park and Point Dume
• 19 have sold at an average price of $1.415 million
• Outside of Malibu Park and Point Dume, only 6 lots have traded

Market Analysis for Sellers

With any real estate offering, it is essential to be the best in your category. It does not matter whether it is a beach home or vacant land.

For property owners selling a burnout land, here are key things to consider:

• There is downward pressure on pricing, in particular, outside of Point Dume and Malibu Park. While it is tempting to list high, using a competitive pricing strategy and reviewing what has traded should help determine an asking price range. These lots are still worth considerably more than raw land and that demand should remain steady during 2020.
• Having great visuals goes a long way. To truly show the potential of a lot, the debris must be cleared and even the weather must be carefully chosen. Instead of tragedy, buyers can picture the future.
• Provide details. Buyers of these lots want to know about the lot lines, utilities, previous structures, and the ability to review whatever may be available. To streamline this process, our team creates custom offering memorandums that make all of this available. Click here to view our offering memorandum for 32933 Calle De La Burrita!

The most important thing is to work with agents who understand the process of selling these lots and who will bring you the best value. If you are considering selling one of these lots, please reach out and we will be happy to provide a no-obligation consultation and site visit.

Market Analysis for Buyers

In the first months after the fire, buyers were desperately searching for an off-market deal. Lots were trading quickly and values were strong.

Now over 14 months later, the frenzy has calmed down and buyers are exercising more discretion. The best lots, in terms of price and location, are still trading quickly. Most of these are located on Point Dume or in the Malibu Park neighborhoods.

The lots being listed for sale located in the hills of Malibu tend to have a more specific buyer and therefore, a longer shelf life. These buyers can afford to move more slowly and methodically, waiting for the perfect opportunity. That said, the amount of buzz surrounding these burnout lots has not diminished and the odds are that if it is a compelling offering, there are two or more parties quietly considering.

The best practices for those interested in purchasing a burnout lot are:

• Set up a notification system. Compass lets you create saved searches that will alert you whenever a new listing appears. You can then save any good matches to a collection, which is a curated visual workspace where you can easily organize the properties you want to see. Better yet, if you have a good agent, they’ll add these lots to your collection as soon as they become available. To set up a burnout collection, please contact us.
• Do your due diligence. Depending on where a lot is located, check with the city or county if time allows for any public records. The best way of going about this is by writing an offer and having a longer escrow that allows 2-3 weeks for inspections. This allows buyers to bring in the proper professionals, contact the city, and know what they are buying.
• Work with the right agent who knows land, the burnout market, and has the right connections. This will make for a smooth escrow and a great start to building your dream property.

We’re Here to Help

As lifelong Malibu residents and realtors, our team knows the hardship and tragedy that so many have been through due to the Woolsey Fire. While we cannot change the past, we can help with the future.

For advice, a land analysis, or any questions, please reach out to us! And, of course, stay Malibu Strong.

Get in touch at 310.230.5771 or email us at russellandtony@compass.com