When the economy went into a free fall in the dark days of 2008 and 2009, buying a second, third or fourth home quickly became less of a priority for the wealthy. Even Malibu was not immune to the downturn. Sales volume and prices in the tony beach community plummeted, and the market has been treading water ever since.
There are signs that 2011 might be different. Sales were up for April, and the summer rental market is starting to heat up, too. Consider the deals that went down during the span of a few days in mid-May: David and Victoria Beckham swooped in and leased one of the area's priciest rentals -- a 10,000-square-foot bluff-top modern home at Point Dume -- for a reported $158,000 a month. An undisclosed buyer is said to have purchased a seven-bedroom contemporary listed at $27 million in the exclusive Malibu Colony, where neighbors include Leonardo DiCaprio and Sting. And Brian Grazer listed his oceanfront Mediterranean in the Colony (bought in 2003 for $13.5 million) at $19.5 million.
Agents admit that rentals initially started slowly. "Last year's less-than-abundantly-sunny weather may have put a damper on bookings, but now the phone is nonstop with people looking," says agent Carol Bird of Westside Estate Agency.
Among the prime properties still available for lease are Goldie Hawn's Balinese-inspired house on Broad Beach ($90,000 a month), the Hamptons-style Colony home of Lily Tartikoff ($125,000 a month) and a 7.25-acre compound that served as the abode of Adam Sandler's Funny People character ($150,000 for August).
Many residences that were priced at just below that ultra-exclusive level are already spoken for. "Everything we have is leased out," says agent Eytan Levin of the Levin Group, whose summer rentals have gone for between $35,000 and $85,000 a month. Some of the heightened activity, believes Levin, comes from the fact that owners are more willing to negotiate on prices. "I think the owners are getting wiser. Last year they weren't flexible, and some ended up sitting on their houses for a month," he says. One property he had was listed at $85,000 a month but went for $72,000. "That's still a shitload of money."
Actually, it's not -- at least compared to what summer homes can fetch in the Hamptons. While Malibu's rental market tops out at about $200,000 a month, that's the low end of luxury in the most exclusive parts of East Hampton and Southampton. There, rentals can easily run from $450,000 a month. It is partly demand: While many New Yorkers are desperate to leave the city in August, Angelenos can lay by the pool in many other parts of L.A. if swinging a pricey Malibu rental isn't in the cards. "The Hamptons blows Malibu out of the water, but you also have to realize that the houses there are on big lots. The majority of Malibu beach houses are tiny by contrast," says Partners Trust agent Ann Eysenring.
On the sales front, April (the last month with available data) trended upward. Nine houses traded hands, compared with five a year prior, and the median sale price increased from $804,000 to $1.15 million, according to HomeData Corp., a residential real estate data company.
In addition to the Grazer residence, a rash of homes owned by Hollywood names have come on the market. In April, Jack Nicholson listed a 70-acre estate in the hills for $4.25 million. The draw is the land, not the modest ranch house. A handful of previously listed houses have also re-entered the market, albeit at lower prices, including Sally Field's three-acre, $5.9 million property (down from $6.95 million) and Sharon and Ozzy Osbourne's $10 million house on La Costa beach (down from just below a reported $11 million).
If there's one property that indicates how far the market has fallen since its halcyon days, it's Jerry Weintraub's spread below Paradise Cove. It went on the market at $75 million in 2008 and is now back at $42.5 million -- a 45 percent drop. The gated estate, one of Malibu's biggest oceanfront properties, features a seven-bedroom main house, two guest houses and an equestrian center. Compared to its 2008 price, it's a steal.
"This market is value-driven. When prices come down to fair market value, there are definitely buyers out there ready to buy," says Hilton & Hyland agent Chad Rogers.
BY THE NUMBERS
- $75 million: Most expensive house currently on the market
- $1.15 million: Median price of home sales in April 2011
- $200,000 a month: Top range of summer rentals in Malibu
- $450,000 a month and more: Top range of summer rentals in the Hamptons