Malibu Is Building More Homes, But Not Enough
For the past few years, Malibu has been known as a place for record-breaking home prices in California. Case in point, Jay-Z and Beyonce just landed an estate in Paradise Cove for $200 million.
But the exclusive coastal city is also known for having a very limited housing inventory, with only 17 homes being sold in April 2023, according to Redfin.
Susan Monus, a veteran agent affiliated with Coldwell Banker Realty, said there are about 150 homes on the market in Malibu right now, which is below a previous sagging market in 2007 when 170 homes were available.
“We thought that was low,” Monus said of the pre-Great Recession numbers.
But there’s the possibility of an uptick in home starts, with a rebuilding effort underway and a new tax burden hitting Tinseltown.
Residential construction in Malibu has been on the rise. Most of it is rebuilding homes destroyed in the Woolsey Fire of 2018. Neighborhoods such as Point Dume and Malibu Park are seeing a growing population of construction crews.
The city has 129 homes under construction, said Matt Myerhoff, a city of Malibu spokesman. And the building and safety department approved 256 permits. Another 100 homes destroyed by the fire will get permits in the next six months.
It’s been five years since nearly 500 homes were destroyed in Malibu; and so far only 128 have been rebuilt because of the sluggish pace of permit approval.
Permit waivers were offered to those who wanted to rebuild a home the same size as what they previously had. But this was not the case for those who wanted to rebuild bigger.
Rebuilding was also slowed by bottlenecked supply chains during the pandemic.
Veteran Malibu Compass agent Chris Cortazzo sees opportunity, but also concedes new construction won’t meet demand.
“It will be great to have new product, because we’re really lacking,” Cortazzo said. “I’m trying to show a client homes up to $7 million and currently there is not much inventory in that price point. So there’s definitely going to be interest once they start completing these projects and I’ll be able to sell them, because I have the buyers.”
Andy Stern, a former Malibu mayor and a Coldwell Banker Realty agent agrees the new construction may not make a dent in skinny inventory. He also said that the rebuilding process is going to reshape the city to some degree.
Smaller homes destroyed by the fire will make way for larger ones that are worth more. “You’re in essentially a new neighborhood and values will go up,” Stern said.
Increasing home values have benefitted Chateau Malibu, which was rebuilt in 2022 by owner Rachel Mumford-Coxton, a founder of Barry’s Bootcamp fitness studios. The 7,400-square-foot mansion, located at 28861 Selfridge Drive in the Point Dume enclave, was listed for $18 million at the beginning of May. Mason Canter, who has the listing, said in another area, the home would be priced between $13 million to $14 million.
“The price per square foot in Malibu Park is $1,000 to $1,200 per square foot. It’s double, triple and even quadruple in Point Dume,” he said. So it’s no surprise listings there range between $24-45 million.
Even with already-high and rising prices, Malibu could become more attractive. Developers turned off by Los Angeles’ new Measure ULA transfer tax have been looking for opportunities in the posh coastal city, according to Cooper Mount, an agent with Carolwood Estates.
How quickly those interested developers can get through the permitting process and meet demand is, however, uncertain.
