(Getty, iStock/Illustration by Alexis Manrodt for The Real Deal)
When Jack Pritchett scored the listing for a 2,300-square-foot home in Malibu, he thought he had a decent property on his hands. A mile north of the Pacific Coast Highway, the four-bedroom sits on 2 acres, with views of the ocean, mountains and canyons. Priced at $1.9 million, the Las Flores Canyon Road home would probably draw a handful of offers, the co-owner of Pritchett-Rapf Realtors thought.
But what happened next surprised him, and Pritchett had the home under contract in less than two weeks.
“The amazing aspect was the number of showings: over 20 in six days,” he said.
That quick deal underscores a Malibu market that has been in overdrive since May, when restrictions on home showings were lifted and buyers started jonesing for properties. The pandemic has also pushed aside the memories of 2018, when the Woolsey Fire tore through the community. That blaze upended lives and destroyed more than 450 homes in Malibu, leaving in its path property losses of $1.6 billion.
More than two years later, and a year into the Covid crisis, the seaside enclave has become L.A.’s premier destination for luxury buyers.
Coldwell Banker’s Kathy Ellis said Malibu’s 92065 ZIP code is as supercharged as she has seen it in her 20 years in the business.
“In 2007, the market was like this,” Ellis said. “But at that time, anyone who could sign their name and had a pulse could get a loan. Right now the lenders aren’t lending to people who are unqualified, but it’s as busy as 2007, and I love it.”
Boldface names connected to Malibu properties have also become commonplace. WhatsApp co-founder Jan Koum spent $87 million in February on a 3-acre Pacific Coast Highway property. And over the last few months, Tyra Banks, Matthew Perry, Flea, Gal Gadot, the Hemsworth brothers, Avril Lavigne and others have either bought or sold homes there.
But the regular rich are the ones driving the spike in home sales, showering plenty of attention on what pass for downmarket listings. And it’s not just single-family homes.
Take the $1.38 million listing Ellis had on a two-bedroom, 1,300-square-foot condominium on Coral Reef Lane. When the contract fell through in January, it took the broker one day to secure two new offers.
Cruising into 2021
Median single-family home sale prices in Malibu and Malibu Beach jumped 71 percent from October through December compared to the year before, according to a Douglas Elliman report. The average price per square foot was up 22 percent, and the number of closings rose 31 percent. Closings for single-family homes and condos rose for four straight months, from a low of 11 in April to a high of 61 in August.
In the condo market alone, the picture for sellers was also rosy in Q4, according to Elliman. Median closing prices jumped 26.4 percent year-over-year; sales also rose to 25, from 16 the previous year.
Upscale Westside communities also reported rising single-family home prices in the latter portion of pandemic-ravaged 2020, but nothing like Malibu. The median home sale price in Beverly Hills was up 12.5 percent year-over-year from October through December. In the Bel Air/Holmby Hills area, the median closing price jumped 33 percent, but the average price per square foot dropped 20.6 percent.
(Click to enlarge)
Another reason propelling Malibu’s market mania may be technology.
“The fact that people can just Zoom in has made Malibu more accessible for people who never thought they could live here,” said Paul Grisanti, associate manager of Pinnacle Estate Properties and the city’s mayor pro tem. “Locals who were maybe thinking about having a weekend house, this has been a great chance to live there full-time.”
Grisanti said the surge in demand has been across all locations and property types, from oceanside to canyon and from estates to condos.
“If it’s listed, somebody wants to buy it,” he said.
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Compass’ Chris Cortazzo, among the top-selling luxury brokers in L.A., said Malibu’s reputation for its laid-back lifestyle has helped attract younger, techier powerbrokers.
“The internet crowd has a lot of hip surfers,” said Cortazzo, who represented seller Diana Jenkins in WhatsApp co-founder Koum’s $87 million home buy. “They want a different lifestyle. They want to raise a family outside a city, but be near one of the best metropolitan cities in the world.”
Cortazzo also sold two of his own luxury investment properties in Malibu late last summer for nearly $50 million total.
But after the Woolsey Fire in late 2018, Malibu home sales dropped and remained low a year later, said Miller Samuel’s Jonathan Miller, who authors the Elliman report. Median single-family home prices were down 17 percent from October through December 2019 compared to the same period the year before.
The fire burned 97,000 acres and was the largest of 30 blazes that have scarred Malibu in nine decades, according to the Los Angeles Times.
Cortazzo, who said he lost a home in the Woolsey Fire, insisted the real estate is worth its high price tag.
“There’s dangers everywhere,” he said. “You can be in Texas and freeze to death. Or you can be in Oklahoma and get wiped out by a tornado. The reward far exceeds the risk.”