Unique Homes Blog

Experts say this is a good time to invest in Malibu, arguably the most coveted sliver of the California coast.

By Roger Grody

Luxury buyers in Greater Los Angeles have many choices, from gated estates in eternally glamorous Beverly Hills to flashy glass-ensconced homes overlooking Sunset Boulevard. But no single community combines Hollywood glitz, low-density rusticity and spectacular views like Malibu. A rural coastal village before it was discovered by movie stars and billionaires, this 27-mile strip of coastline is one of L.A.’s hottest enclaves for the rich and famous.

A 20-minute drive up the coast from congested Santa Monica, Malibu offers several distinct lifestyles. If you want a vacation home on the beach, you can find it, but if you prefer rugged horse trails and hillsides, that’s also a Malibu signature. There are even vineyards here, providing a taste of Napa Valley just a short drive from your high-rise office in downtown L.A. or studio in Hollywood.

Chris Cortazzo of Coldwell Banker Residential Brokerage, born and raised in Malibu, believes his hometown sells itself, noting its proximity to world-class urban amenities while offering clean air, great schools and safety. He also appreciates Malibu’s lack of pretentiousness, noting that mansion-dwelling celebrities surf alongside residents of mobile homes. “In Malibu, it’s not what you drive, it’s how nice you are,” insists Cortazzo.

Irene Dazzan-Palmer of Coldwell Banker Residential Brokerage reports that the first quarter of 2011 lagged behind 2010, but that she and son/partner Sandro Dazzan experienced a particularly strong May. “For really well-priced properties in key locations, cash buyers are out and they’re buying,” she says. A $5 million investment can land a buyer about 6,500 square feet on a gated 2-acre lot with impressive ocean views, according to Dazzan-Palmer, or even a respectable 3,000-square-foot house on the beach, both representing significant discounts from the heady days of 2007. At time of publication, 47 Malibu single-family homes were priced at $10 million or more, with 10 exceeding $20 million.

Jack Pritchett of Pritchett-Rapf Realtors insists Malibu hasn’t lost any of its cachet value with the entertainment industry. “They keep coming,… they’re just getting younger,” he says. Marcus Beck of Prudential Malibu Realty notes that about five years ago, some entertainment industry clients passed on Malibu in favor of second residences in the Hamptons, but subsequently realized a Malibu location — close to work in Hollywood or Cen-tury City — was too convenient to abandon. Pritchett adds, “The very high-end market is the least affected by the economic downturn, as cash transactions are not complicated by issues like appraisals and financing.” He and others agree that the $3 million to $5 million price range, which traditionally appeals to move-up buyers, is more problematic because those buyers are having difficulty selling their existing homes or obtaining financing.

Pritchett co-lists a sprawling oceanfront property with classic Mediterranean architecture and Hollywood pedigree — the quintessential Malibu estate — for $45 million. But topping all current listings in Malibu is the exquisite, 20,000-square-foot La Villa Contenta, perched on 8 bluff-top acres overlooking the Pacific. At $75 million, it’s the coastal community’s highest-priced property and one of the most expensive in the nation. Coldwell Banker’s Cortazzo, nicknamed “King of Malibu” in Bravo’s reality series “Million Dollar Listing,” has the listing. In contrast to some of his peers, he is genuinely upbeat about the Malibu market.

“January and February were disappointing, but activity has picked up significantly, and now we’re seeing a dramatic increase in showings and offers as we move into the summer months,” says Cortazzo. For exclusive properties priced $10 million or more, he reports a considerable uptick in offshore interest, with Chinese, Russian and European buyers lured by a weak dollar and prices that have fallen as much as 30 percent from pre-recession levels. Those international showings, he says, extend even to pricey La Villa Contenta.

Cortazzo and Pritchett represent a unique investment opportunity called MariSol. This high-end, beachfront bluff development is comprised of 17 exclusive estates on a sprawling 80-acre site overlooking the ocean. “It’s an extraordinary development,” says Cortazzo, who claims MariSol is receiving considerable interest in the early stages of marketing. The completed showcase house is listed at $17 million and homesites range in price from $4 million to $9 million, not including a massive, yet-to-be-priced 57-acre parcel suited for a mega-retreat. Because it’s just across the Los Angeles County line, MariSol properties are subject to less stringent development restrictions than most Malibu properties, providing buyers greater opportunity for architectural expression.

Cortazzo’s partner at Coldwell Banker, Ron de Salvo, remains more cautious about the Malibu market, despite acknowledging a brief surge about a year ago. In addition to macroeconomic conditions, he cites the erosion of beachfront, notably at Broad Beach, as a contributing factor. “However,” he reports, “prices on Malibu Colony Beach, always a desirable area [with prices typically from $11 million to $25 million], have generally held.” As an agent active throughout Los Angeles’ premium-priced Westside, de Salvo is in a position to observe the Malibu market with perspective, and sees it lagging behind other luxury communities, such as Beverly Hills or Brentwood. Among current Malibu real estate trends identified by de Salvo are younger buyers and a preference for contemporary or Mediterranean architecture in homes that take full advantage of their ocean vistas.

Beck also indicates cautious optimism. Reporting on the $6 million-plus market, he explains, “Sales are not where they’ve been historically, but people are beginning to perceive it as a value at this point.” As a somewhat promising indicator, he cites the fact that at the start of 2011, there were 17 listings on beachfront Malibu Road, but by May, two were suddenly in escrow. With beachfront prices down nearly 25 percent and some inland properties discounted as much as 50 percent from historical highs, Dazzan-Palmer maintains this is an excellent time to buy into “the ’bu.”

Coldwell Banker Residential Brokerage’s Lydia Simon, a luxury condominium specialist, reports weakness relative to Malibu’s single-family home market, noting that a surprisingly large number of short sales continue to weigh on prices that have already slipped 20-30 percent from market heights. She explains that an $800,000 investment — considered a bargain for Malibu — now yields a two-bedroom condo on the water, or a larger land-side unit. Penthouses at Carbon Beach, the site of some of the highest real estate prices in the world, frequently exceed $3 million, depending on age and condition. “People are looking for the top floor and for something completely cherried-out,” says Simon. At press time, 51 condominiums were on the market in Malibu.

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