2020 Quarterly Update: Q1 January-March

As you all know, we are amidst some very uncertain economic times due to the Coronavirus which has severely slowed the real estate market nationwide. Although real estate has been deemed an essential business according to CISA, local orders are still in place which prevent agents from performing crucial business activities such as in-person showings and open houses.

So the question is, how are we conforming to these unprecedented times and what effect has it had on the Malibu housing market? Below, we have outlined how the market is performing thus far, some market predictions for 2020, and tips for buying and selling during the Coronavirus crisis.

Coronavirus and the Real Estate Market

Many of you may be curious about how the market is performing and how it is predicted to look once the Coronavirus slows down. The simple answer is this: it is unclear. However, there are many predictions, including from the California Association of Realtors, who have stated the below:

• Few economists are predicting a recession yet. Growth in the economy is expected to be slower, but still expected to grow.
• Mortgage rates will likely remain low, and may drop even lower. The Federal Reserve issued an emergency 50 basis point cut to their target interest rates which is expected to help reduce the cost of borrowing to make housing more affordable.
• Results depend on supply and demand. Currently, there is low supply and high demand – with less inventory and lower rates, upward pressure on home pricing is expected.
• Financial market instability has impacted household wealth which could cause a decline in demand for luxury California homes. However, with less luxury buyers, there could be opportunities such as price discounts for luxury buyers who remain.
• Much of California’s building industry is sourced from Asian countries such as China and with the Coronavirus rattling these supply chains, materials may become limited or costs may significantly increase which could slow the pace or enhance the cost of new construction.
• C.A.R’s housing market seems to remain unchanged, for now. It depends on the duration and severity of the outbreak. Low rates should help offset the effects of a slower economy which could leave a moderate improvement in home sales and prices in 2020.

With the safer-at-home orders in place, real estate agents around the world have had to adjust their services from in-person interactions to FaceTime/video walk-throughs and open houses. This has caused some uncertainly in buyers, but we have seen a rising number of sales done solely online.

Malibu Beach Sales:

On the Malibu’s beachside, there have been 11 homes sold and 3 in escrow this year. The average amount of days on the market was 95 with an average listing price of $11,362,112 and an average sale price of $6,976,281.

At this time last year, there were less sales with 8 homes sold and 3 in escrow. The average amount of days on the market was slightly higher at 96. The average listing price was higher at $11,562,294 and the average sale price was higher at $7,414,062. This was also in wake of the Woolsey Fire which completely halted real estate activity in Malibu for the beginning of 2019.

Malibu Landside Sales:

On the Malibu Landside, 23 homes have sold and 13 homes are in escrow at the end of Q1. The average amount of days on market is 98 with an average listing price of $6,196,902 and an average sale price of $2,735,217.

At this time last year, sales were significantly less with 16 homes sold and 13 in escrow. The average days on market was slightly lower at 95 with a higher average list price at $6,384,214 and a higher average sale price of $3,317,437.

The MGG Take:

The Malibu Beach and Landside market stats may come as a surprise since Malibu home sales seem to be moving along at a better rate than last year. This is due, though, to the slowdown in sales last year following the November Woolsey Fire. Although our team is taking business day by day, the truth is that people always need a place to live and Malibu is one of the best. With low interest rates and high demand, real estate will hopefully stabilize as the COVID19 situation does. Here are our tips for buyers and sellers:

For buyers, we believe this is a great opportunity to shop for homes online as inventory, as general buyer interest is low. Motivated sellers will still have their homes actively listed and with most people unwilling to make moves, the savvy buyer will find great opportunities.

For motivated sellers, keeping a property on the market during this time is the best thing that you can do. The MLS has halted days on market, meaning that during this pandemic, the home will not needlessly accrue days listed. The amount of canceled and withdrawn listings is staggering and people are online now more than ever, thus boosting exposure and maximizing views. Stunning visuals and video tours are the current focal point of real estate marketing and when the dust settles, we believe many buyers will decide its time to make a move.

Malibu has and will always be one of the most desirable real estate markets in the world. While we are surrounded by uncertainty, we are certain that this will not change. Stay safe, stay well, and stay at home. | #MalibuStrong

All information is current as of March 31 (end of Q1), and pulled directly from the Multiple Listing Service. This does not include off-market transactions.

We are here to help during these uncertain times. Looking to buy or sell in Malibu? Contact us for more information!

Call 310.230.5771 or email russellandtony@compass.com